Investigating the Possibilities of a Cryptocurrency Bull Market in 2024-2025

After a long and painful bear market, the cryptocurrency market shows some serious signs of reversing the trend. This is happening a few months before Bitcoin halving which occurs every 4 years. Historically, Bitcoin halving signals the beginning of a bull market period that lasts 12-18 months. Of course, the performance of past market cycles cannot guarantee future performance. There are some risks (presented later) that can disturb, or even cancel, the bull market. In any case, we will investigate the potential of an upcoming bull market for cryptocurrencies.

Before we move on with the crypto analysis, this is an evaluation of TradingCenter’s latest trading signal.

TradingCenter Previous Trading Signal September-November 2024

In the latest TradingCenter signal (September 19th, 2023), it was said that the US dollar was strong at the time, but a strong rebound for EURUSD is expected in the second half of November. The US dollar stayed strong until late October, and a major EURUSD rally started on November, 2nd. The pair moved from 1.055 (November 1st) to today's 1.093. Not a bad call although EURUSD rebounded a little earlier than anticipated.

» The previous TradingCenter signal can be found here

 

Bitcoin Halving Events and Their Impact on the Market

 

The upcoming Bitcoin halving, combined with the anticipation of a Bitcoin ETF and the prospects of tokenizing the old economy through the blockchain, are behind the potential of a crypto bull market for the years 2024–2025. In the following chart, we can see Bitcoin's historical price action over the three previous BTC halving events. The indicator on the bottom of the chart is RSI Precision 3.0.

 

Chart: Monthly Logarithmic BTCUSD and the Bitcoin halving events

Six months before each Bitcoin halving has historically proven a good time to buy Bitcoin. The next BTC halving is in April 2024, and six months before April takes us to October 2023. Indeed, BTC is up 40% since October, 1st. History has also shown that close to each BTC halving, there is a major correction. This correction is expected to happen in this cycle too, sometime in early 2024.

 

 

Eight (8) projects/categories that can lead the next bull market

 

These are some key projects/categories to watch:

(1) Bitcoin -the "US dollar" of the crypto market (only 21 million supply, while the upcoming Bitcoin halving will enforce scarcity)

(2) Ethereum -the DeFi and NFTs powerhouse (note it will become deflationary in a bullish market environment -more later)

(3) Selected Layer-1 ecosystems with a proven use case and a strong user base (these are competitors to Ethereum)

(4) Interoperability (cross-chain) protocols that facilitate data/assets interaction across different Layer-1 blockchains (they are often called Layer-0)

(5) Selected DeFi chains (enabling cryptocurrency-based banking and other financial services)

(6) Tokenization Blockchains (placing and exchanging Real-World Assets on the blockchain)

(7) Selected gaming blockchains (creating monetization routes for video games)

(8) Selected Artificial Intelligence (AI) crypto projects

 

Things to keep an eye on in 2024

 

There are quite a few significant developments in 2024 to keep an eye on:

• The upcoming ETF decision for BTC, and perhaps ETH too (probably early 2024)
• Bitcoin halving event in April (which reduces Bitcoin's inflation in half)
• Impact of the US Presidential Election in November

Major Macroeconomic Events

With regard to the general macro environment:

• Impact of the completion of the interest rate cycle (mid-2024)
• Impact of a potential recession in major Western economies (late 2024-2025)
• The prospect of a new Quantitative Easing (QE) in the case of a strong economic recession (late 2024-2025)

Concerning these three macroeconomic events, keep in mind that the cryptocurrency market has historically proven to be very sensitive to the liquidity conditions of legacy markets. Therefore, a macroeconomic analysis of the crypto market should focus on future liquidity conditions and investors' appetite to accept risk.

• Focus exclusively on expected market liquidity and risk appetite conditions, not on general economic conditions
• The cryptocurrency market can prove very vulnerable to a liquidity crisis in legacy markets
• In a general risk-on environment, crypto will perform much better

 

Is it time for Ethereum to Shine?

 

Ethereum (ETH) is the second-largest cryptocurrency in terms of market value and the indisputable leader in every category of programmable money, including DeFi and NFTs.

After the recent implementation of the proposal EIP-1559, a small portion of Ether is burned with every single transaction. This means that transactions decrease the overall circulating supply. If a bull market occurs, Ethereum is expected to become deflationary in a strong-demand market environment.

 

Chart: Ethereum against the US dollar (Logarithmic)

 

Be Aware of the Risks

 

There are specific market conditions that can disturb or even cancel the crypto bull market:

(i) A decisive legislative shift against the crypto market (it can happen, but it is very unlikely to occur before the US Presidential election in November 2024)

(ii) Permanent disapproval of Bitcoin’s ETF, which may lead BlackRock and other Institutions to abandon crypto for good

(iii) Liquidity crisis in legacy markets (if that happens, expect a major dip in the crypto market, at least in the short term)

(iv) A significant failure or a hack on the Bitcoin/Ethereum chains (highly unlikely)

(v) Total failure of a major cryptocurrency exchange (likely to happen but unlikely to cancel the whole bull market)

 

 

Crypto Analysis -Final Words

 

Nobody knows the future, but there is a case for an upcoming crypto bull market in the years 2024–2025. These are some key points to remember:

• There are significant risks when investing in the crypto market, therefore, be very cautious and only invest money that you are willing to lose
• Only Bitcoin and Ethereum are considered "hard money." Every other cryptocurrency is highly inflationary money without any real future value
• After 2025, 99% of all cryptocurrency projects will go to zero. Therefore, you must have a clear exit strategy for the upcoming years
• The bull market will probably occur in three waves (stages). The first wave will most likely complete near the Bitcoin halving, where the altcoin market will get a serious correction of about 40-50%
• According to market statistics, the top will likely occur in October 2025. However, expect the altcoin market to peak many months before that date. Maybe even in late 2024.
• The cryptocurrency market can prove very vulnerable to a liquidity crisis in legacy markets. In a general risk-on environment, crypto will perform much better
• Don’t invest money in crypto that you will need in the next couple of years, and never trade the cryptocurrency market using any leverage at all

 

■ Cryptocurrency Market Analysis for 2024–2025

Giorgos Protonotarios, Financial Analyst

TradingCenter (November, 24th 2023) -Nothing posted constitutes investment advice