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Analysts' Insights

Analysts' Insights

October 28 2022, we called the low in Bitcoin

1) On October 28 2022, we published our report about the Bitcoin mid-halving cycle, which was expected to make a structural low around that time and projected prices of $63,160 by April 2024. Bitcoin traded at $20,400 back then and has now rallied to $29,500.

While we cautioned yesterday that prices could correct lower in the short-term, traders should not forget the below analysis:

2) We projected that Bitcoin prices would start rising within the next three months, and we projected an upside target of $63,160 by March 2024, when the next Bitcoin halving event was expected to occur. This was a “potential return of +207% from current levels, as we wrote in our most recent report.

3) While slightly pushed out, the halving date is projected to occur on April 27/30, 2024, and prices have historically bottomed out between 515 to 458 days before the next halving. This freshly calculated date would push the projected Bitcoin low between November 29 2022, and January 1 2023.

4) While the current cycle appears to underperform previous ones slightly, the upside target is still projected to be around $65,623 by April 2024 (considering the new date). Hence we are revising our $63,160 price target slightly upward.

5) This still leaves around a +120% upside from current levels. While our +207% upside target appeared ambitious in Oct, 120% is achievable, as we have seen during the last few months.

6) But the analysis also reveals that there might be a period of consolidation ahead. This might be a consolidation period where Bitcoin prices grind higher, and alt-coins and Layer1s outperform. This is why – among other reasons – we suggested a week ago that Ethereum > Bitcoin.

7) The maximum liquidity burst that we have been projecting since Dec coming from lower inflation might now be behind us as Bitcoin will become less sensitive to the steady drop in inflation.

8) Bitcoin is driven by US investors while Asian investors appear to dominate Ethereum. The shift appears happening and is driven by flows.

9) The summer period has also been associated with consolidation in BTC prices. While BTC tends to rally +14% in April (this is why we kept the long into this month), with 6 out of the last 8 seeing higher BTC prices (75% hit ratio, see right-hand side of the chart), the months of June (+2%), Aug (+3%) and Sep (-5%) are less exciting months.

10) From a tactical point of view, we would accumulate additional exposure during a potential dip in June only to sell a likely rally in July and then wait for the more profound drop in September. But we would not turn bearish as the halving cycle analysis still projects higher prices until the halving event in April 2024.

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