Several crypto analysts have continued to predict what could trigger the next Bitcoin bull run. This time, co-founder of Delphi Digital Kevin Kelly has weighed in as he believes certain metrics could determine when the next bull run will occur.
Bitcoin’s Consistent Four-Year Cycle
On August 14, Kelly laid out some analysis in a Twitter thread, pointing out the consistency of past crypto market cycles and how they could impact the market going forward. He says that contrary to public opinion, the crypto market is “quite cyclical” and consistent in certain metrics, which usually mark the beginning and end of a particular cycle.
Kelly used Bitcoin as a point of reference to drive home his point of the crypto market being cyclical. He noted that Bitcoin typically follows a four-year cycle with patterns that repeat themselves consistently. This four-year cycle involves Bitcoin hitting a new all-time high (which would typically represent a peak of the bull run) followed by an 80% “drawdown” a year later (bear market). It uses a further two years to recover to its past high (the start of another bull run) and finally, rallies for another year to reach a new all-time high.
Going by this cycle would mean that we are likely in the recovery stage, considering that Bitcoin already experienced the “80% drawdown” at the end of last year when it was trading at around $16,900.
Since the beginning of 2023, Bitcoin hasn’t closed any month below $20,000. Furthermore, Bitcoin’s price is currently trying to break the $30,000 resistance, which could spark the next rally in a quest to recover its past high of around $68,000 when it peaked in November 2021.
Bitcoin’s Halving is another important metric, as Kelly noted that the last two halvings occurred 18 months after BTC bottomed and 7 months before it broke to a new all-time high (ATH). He believes BTC could hit a new ATH by the fourth quarter of 2024 if it follows its usual patterns.
BTC price falls after brief recovery | Source: BTCUSD on Tradingview.com
ISM Index Could Determine Next Bull Run
Kelly has also drawn a correlation between the Bitcoin market and the Institute of Provide Administration (ISM) manufacturing index. This index tracks monthly changes in the economic activity within the manufacturing sector in the US.
Interestingly, BTC price peaks reportedly occur around the same time the ISM shows signs of topping out. Active addresses, transaction volumes, and fees on the Bitcoin network have apparently all peaked alongside tops in the ISM index. As the ISM index recovers, so does Bitcoin do too.
He further highlighted that the ISM is nearing the final stages of its two-year downtrend, which could invariably mean that the next bull run is also near.
Featured image from iStock, chart from Tradingview.com