Bitcoin’s seasonality shows that summer can often be an accumulation zone for Bitcoin (BTC). While the end of summer historically shows significant risks, this summer could well be decisive. The rise in the price of gold, simultaneous with that of Bitcoin, revives hopes of new Bitcoin highs.
Bitcoin (BTC) seasonality: summer as a tipping point
The bitcoin price still reliably respects its cyclicality. A new bullish wave could thus form to reveal its bullish potential, and summer would have a major psychological role in this dynamic.
In a statistical study conducted a year ago, we established the typical profile of bitcoin variations over the year. The study of data from 2015 to 2023 brought out the following conclusion:
This graph shows the “ideal” evolution of bitcoin according to the months of the year based on the price history between 2015 and 2023. We see that the months of July, August and September are generally stagnant. A strongly bullish phase generally begins from the end of September to December. Autumn therefore seems to be a good time for the bitcoin price. A new phase of stagnation begins between December and January, before a rebound in the following month. […] 62% of the time, the price of bitcoin rises between (late) September and December. The average increase in the latter is more than 70% over the period in question.
The seasonality of bitcoin (BTC) – Tremplin.io
Summer: a zone “ accumulation » for bitcoin?
The study of data between 2015 and 2023 shows that summer, on average, is conducive to “ slight increases ». However, when we adjust the average performance for their statistical reliability, the conclusions change slightly. July appears to be on average a moderately bullish month, but with significant reliability. In contrast, August is generally a poor performer and less reliable.
This behavior may explain the fact that bitcoin presents a contrasting profile over the summer months. In addition, the end of summer is often conducive to powerful bearish phenomena. Summer therefore often appears as a transition phase in the behavior of the bitcoin price. Consequently, this transition can be from a bull market to a new bullish wave, or from a bull market to a bear market.
Towards a final upward wave in the coming months?
The study of annual seasonality allows us to take advantage of statistical anomalies. But bitcoin does not necessarily follow annual cycles. In fact, it appears that bitcoin follows traditional stock market cycles lasting 3 to 4 years.
Looking at the simple peak and trough dates of bitcoin leads us to several conclusions.
- The average length between two major Bitcoin (BTC) bottoms is 3.6 years. The length of these cycles has tended towards 4 years in recent years.
- During the rising phase, the average duration is 2.6 years (2 years for cycle 1; 2.9 years for cycle 2; and 3 years for cycle 3). This duration has tended towards 3 years in recent years.
- For the decline phase, the average duration is 1 year. These phases seem to be of less variable duration… The great regularity of the decline phases is a major argument.
Is there a 3.5 year cycle in cryptos? – Tremplin.io
Below we have plotted bitcoin’s trajectory over the last two 3.6-year cycles. We have also added our current position in this cycle (blue curve). It is clear that bitcoin’s trajectory in recent months is, on average, close to its historical trajectory. However, we also see that the coming months could mark a resurgence in volatility.
A movement always framed?
In an analysis article in May, we highlighted the risk of a correction in the bitcoin price. This consolidation now seems to be over. The end of the downward movement in June seems to confirm the importance of the bitcoin cycle in the current dynamic.
The rise in the price of bitcoin since the beginning of 2024 would even tend to slightly exceed its historical norm. Therefore, the immediate conclusion would be that the consolidation movement observed since March 2024 would not be abnormal, on the contrary. The converse would even be that the historical scenario being respected, we could witness a second bullish phase in the summer of 2024.
Finally, we will notice that the trajectory of the bitcoin (BTC) price becomes less “ standardized » from the 25th or 30th month of the cycle. In other words, volatility increases because the behavior of agents is more euphoric. It will therefore theoretically be more difficult to make projections in 2025 or 2026 on the price of bitcoin than in 2024.
Has Bitcoin (BTC) Exhausted Its Upside Potential? – Tremplin.io
Towards a final upward impulse?
Summer is often seen as a period of relaxation in many economic sectors. For financial markets, this season is marked by reduced transaction volumes due to the summer holidays. However, the impact of summer on the Bitcoin (BTC) price presents interesting particularities that deserve special attention. The study of the 3.6-year cycle would indeed be consistent with this particularity of the stock market summer.
Considering cyclical phenomena, it is possible that the next Bitcoin top will be rather brief. That is, a double top would possibly be less likely. But this remains in the hypothetical realm. In our cyclical study conducted a year ago, we came to the following conclusion.
Assuming our assumptions hold in the future, the next peak would be around mid-2025. This is consistent with the cyclicality of many other assets. However, we need to specify some conditions. To be valid, a bitcoin bull market should ideally be accompanied by a prior peak in volatility, and a rather accommodative monetary policy.
Is there a 3.5 year cycle in cryptos? – Tremplin.io
The trend holds, gold shines, bitcoin bug?
In recent weeks, the price of gold has started a new wave of growth. A major reason for this movement is the anticipation of a rate cut by the FED at the start of the school year. In addition, the increased probability of a recession or economic slowdown favors safe havens. In this context, which is not yet one of increasing volatility, bitcoin is ideally benefiting from this movement.
Consistently, bitcoin appears to be entering a rebound towards its recent highs. The corrective move seen in recent weeks corresponds to the 61.8% retracement of the last cycle.
Furthermore, a bullish breakout of the last consolidation pattern (wedge) would certainly allow us to consider $79,000 to $80,000. By extension, it would be necessary to confirm a structural bullish force to design a 5th bullish wave towards $100,000, or even $120,000.
What can we expect from the summer of 2024?
We have shown that summer is often conducive to a transition in bitcoin's behavior. While July is historically bullish and rather reliable, the end of summer shows certain risks. In a general bullish dynamic, summer generally proves to be optimal for managing positions while waiting for a final bullish movement, the magnitude of which can be minimal or major. Seasonality is not the only indicator that goes in this direction. Indeed, the study of bitcoin's cyclicality seems to explain the movements of previous months. Summer is therefore a transition period. In view of bitcoin's bullish rebound, it is possible to witness a return to the last peaks, which would possibly be followed by an overshoot. Bitcoin benefits from expectations of monetary easing. However, an increase in economic risk and volatility would certainly be harmful to it in the long term. Consequently, the recent consolidation appears to be technically and temporally framed. A breach of the latest peaks would lead to significant compliance with the cyclical patterns at work.
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