Cryptocurrency's Predictable Patterns: ISM Peaks And Bitcoin Halving Insights

Kevin Kelly, co-founder and Head of Research at Delphi Digital has presented a compelling argument suggesting that the cryptocurrency market is on the brink of entering a new cycle.

Drawing on historical data and patterns, Kelly highlighted the cyclical nature of the crypto market and its remarkable consistency.

Consistency In Crypto Cycles

Kelly emphasized that the predictability of crypto market cycles is not coincidental.

Using Bitcoin BTC/USD as a reference, he outlined a typical cycle:

• Bitcoin reaches a new all-time high (ATH).
• It then experiences an approximately 80% drawdown, finding its bottom about a year later.
• It takes roughly two years for Bitcoin to recover to its previous high.
• A price rally ensues for another year before a new ATH is established.

Kelly noted that such cycles usually span around four years and align closely with changes in the business cycle.

He pointed out that Bitcoin price peaks often coincide with indications of the ISM (Institute for Supply Management) topping out.

Metrics like active addresses, transaction volumes, and total fees have also peaked alongside the ISM.

ISM's Role In Predicting The Crypto Cycle

The trajectory of the ISM has historically mirrored its previous cycles, especially in terms of the timing of its peaks and troughs.

Kelly believes that the ISM is nearing the end of its two-year downtrend, a sentiment that risk assets have been reflecting.

Halving And Its Significance

Kelly also touched upon the significance of Bitcoin's halving event.

He suggested that the timing of the next halving is set to occur when indicators like the ISM show signs of bottoming out, aligning with expectations for a renewed liquidity cycle uptrend.

Also Read: Binance Fights SEC 'Fishing Expedition' Over Customer Assets, Calls Data Demand 'Excessive'

Risks And The Road Ahead

While Kelly remains optimistic about the crypto market's trajectory, he acknowledged potential risks. He mentioned the possibility of a modest selloff or price consolidation, especially given the strong rally observed over the past nine months.

Another concern is if the business cycle exhibits a false bottom or doesn't bottom as quickly as anticipated.

Kelly believes that despite facing numerous challenges over the past 18 months, the crypto market's outlook for the next 12-18 months appears promising, with several catalysts lining up in its favor.

Read Next: Archblock Launches Tokenized US Treasury Bills Fund On Marketplace For Global Investors

Join Benzinga's Future of Digital Assets in NYC on Nov. 14, 2023 to stay updated on trends like AI, regulations, SEC actions & institutional adoption in the crypto space. Secure early bird discounted tickets now!

Photo: Shutterstock