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The price of Bitcoin may not return to this year’s highs for another five months
After the strong rally at the beginning of the year, the summer doldrums may be coming soon for Bitcoin. The cryptocurrency is up 48% this year thanks to bullish enthusiasm surrounding the debut of U.S. bitcoin ETFs in January and the April 19 halving. Bitcoin is on track for its first positive week in the last six, according to Coin Metrics. However, it fell 11% in the second quarter and was off about 14% from its all-time high above $73,000, reached in March. Analysts remain optimistic about bitcoin in the long term, but say the next few weeks will require some patience. “It could take three to five months for Bitcoin to retest recent highs,” HC Wainwright analyst Mike Colonnese told CNBC. “AS [we’re] from neutral in the short term to cautious and bullish from medium to long term on bitcoin – and by extension on miners.” BTC.CM= 3M mountain Bitcoin has fallen 11% this quarter Bitcoin miners offer high beta exposure to bitcoin and have historically outperformed it during bull cycles, he added. His top pick in this space is CleanSpark Wolfe Research technical analyst Rob Ginsberg shared a similar view on bitcoin signs of further near-term downside continue to worsen,” he said in a statement this week. “We keep wondering if the last rejection at $70,000 was the start of an epic double top.” Colonnese also stressed that corrections between 25% and 30% are “the norm” for bitcoin, even in bullish cycles. “We would not be surprised if bitcoin moves back into the low-to-mid $50,000 range in the near term due to stubbornly high inflation, which slows the economy. Growth and geopolitical issues remain key risks,” he said. Bitcoin has held above $60,000 since early May, when it fell below that level for the first time since February. But analysts studying price charts see that level as vulnerable and have warned of downside risk to $49,000. However, according to Colonnese, it is still early for Bitcoin in this cycle. Between the increased demand this year from bitcoin ETFs and the reduction in supply due to the halving, the cryptocurrency’s supply and demand dynamics are interesting. His base case is that bitcoin will reach $100,000 this cycle. “Looking at previous price cycles, bitcoin has historically peaked between one and a half years after a halving event, with the bull phase lasting longer in each subsequent cycle,” Colonnese said. “Bitcoin rose to over $67,000 in November 2021, 546 days after the third halving in May 2020.” “Assuming a similar duration for this bullish phase of the price cycle, bitcoin may not reach its peak of the cycle until October 2025,” Colonnese added. – CNBC’s Michael Bloom contributed reporting.