The behavior of Bitcoin’s value during the 2023-2024 market cycle can be divided into four phases. Daan Crypto Trades highlighted in a recent post on X that these stages consist of two rallies and two consolidation periods with the second phase of each stage longer than the first. This pattern makes it easier to describe the nature of cryptocurrency and its trends, since the latter are usually quite random.
Bitcoin’s Four Stages of the Cycle
The first rally was from January to April of 2023 which was characterized by a strong rebound in the price of Bitcoin, this was followed by a period of trading range bound till September of 2023. The market then experienced the second phase of rallying from September 2023 to March 2024 and after that the market entered into the consolidation phase which began from March 2024.
Daan Crypto points out that the first two phases of the rally and consolidation were relatively quick while the other two phases have lasted longer and are now the same. This observation points to one of the most important aspects of the Bitcoin market cycle. The majority of the profits are usually made within a few months while the consolidation phases can take longer and may give the traders a lot of confusion.
The analysis is based on the idea that it is difficult to determine when to enter or exit the Bitcoin market. Those who come into the market with the intention of buying and selling with an intention of making a quick profit may not get it right with quick and powerful bull runs.
On the other hand those who enter or trade early in anticipation of a big move may end up being caught in the chop zone where prices are ranged and may lead to a loss. Consequently, spot trading should be preferred because of the numerous risks that are associated with leveraged trading and are suitable for most investors to hold their positions.
Bitcoin’s September Performance
Ash Crypto also shared some insights about the movement of Bitcoin in September noting that the currency oscillated between $46,000 and $70,000. Bitcoin closed the month at $58,975 after having risen by 8% in the week. This is the 75% correction, the lowest close since the end of the last year, six months ago. This is even when the U. S stock market was trading near its record high levels suggesting that there might be a separation between the price of Bitcoin and the equity market.
Historically September has been a red month for Bitcoin where we can observe negative returns for six out of seven years. The biggest change was recorded in 2019 when the decrease was 13% and the only growth was recorded in 2023 and when it was 4%.
Key Events to Watch
Some of the possible events that could influence the market trend of Bitcoin are the US election that is scheduled for November 5, FOMC meetings, monthly CPI data release and job reports. Similarly, the level of M2 money supply would be monitored for any indications of market direction changes.
As Bitcoin continues to go through these many market cycles, these lessons could be useful for traders and investors. Realizing these phases and factors would certainly be helpful in the decision making process if one is to transpose into the world of cryptocurrencies.
