Bitcoin price action is starting to reflect the BTC cycle ahead of the 2015-2017 bull market

A recent report by research firm Delphi Digital illustrates the predictable consistency of price action and trends in the crypto market. The report looks at the connections between the 4-year Bitcoin (BTC) cycle and broader economic trends.

According to analysts at Delphi Digital, the ongoing consolidation at $30,000 is similar to the period between 2015 and 2017, with indicators pointing to an upcoming all-time high for Bitcoin in Q4 2024.

Business cycles affect the performance of Bitcoin

Delphi’s analysis draws attention to the inherent cyclical nature of the cryptocurrency market. This cyclicality is evident in the timing of highs and lows, rallies to previous cycle highs, and the timing of price increases to new cycle highs. Using Bitcoin as a benchmark, Delphi outlines the general outline of a cryptocurrency market cycle.

Bitcoin price in USD (logarithmic scale) reflecting 4-year cycles. Source: Delphi Digital

These 4-year cycles include bitcoin hitting a new high, experiencing a drop of about 80%, and bottoming about a year later. This tends to be followed by a two-year rebound to previous highs and finally another year’s price rally leading to a new all-time high.

The research reveals an intriguing correlation between bitcoin price spikes and changes in the business cycle, as indicated by the ISM Manufacturing Index.

Bitcoin/USD YoY (orange) vs. US ISM Manufacturing Index YoY (white). Source: Delphi Digital

During bitcoin price spikes, the ISM often shows signs of a top and active addresses, transaction volumes and fees peak. Conversely, when the business cycle signals a recovery, network activity also increases.

The report emphasizes the role of the Bitcoin halving in these cycles. The last two halvings occurred about 18 months after the BTC bottom and about seven months before a new ATH. This historical pattern points to a projected new ATH for Bitcoin by Q4 2024, which coincides with the expected timing of the next halving.

Bitcoin price action is similar to the 2015-2017 pre-bull run phase

The report also suggests that the current market environment bears striking similarities to the period between 2015 and 2017. The consistency of market behavior, economic indicators and historical trends suggests that the current phase resembles a period of heightened risk exposure and potential growth. as was experienced at the time.

The report finds that the trading patterns of the market, particularly in the S&P 500, closely resemble what was observed over the 2015-2017 period. Even in times of uncertainty, such as an earnings recession, these patterns persist and reflect the mood of the time.

The consistent pattern of the Bitcoin cycle, its synchronization with broader economic changes, and the upcoming halving in 2024 all contribute to this thesis.

US ISM Manufacturing Index, current (orange) vs. 2013–2019 cycle (white). Source: Delphi Digital

Delphi highlights parallels between the bleak global growth outlook in 2015-2016 and the recent bout of economic uncertainty in 2021-2022. Factors such as US dollar strength and changes in global liquidity cycles reflect history.

The report underscores that gold’s performance at the time, influenced by currency devaluation concerns, bears striking similarities to the present. These parallels support the argument that macroeconomic conditions follow a known trajectory.

Gold price in USD (logarithmic scale), current (orange) vs. cycle 2015-2019 (white). Source: Delphi Digital

Related: Is Bitcoin’s Record Low Volatility and Decline in Short-Term Holders a Signal of a Bull Market?

The crypto market is reflecting a bullish outlook with some warning signs

Delphi’s analysis provides compelling evidence that the crypto market is subject to cyclical patterns that reflect broader economic changes. The report’s forecast of a new all-time high in the fourth quarter of 2024 is consistent with historical halving patterns. This timing, coupled with the health of indicators such as the ISM and the expectation of new liquidity cycles, strengthens the case for a cycle similar to that seen in 2015-2017.

The upcoming Bitcoin halving in 2024 further bolsters their expectations of a potential bull market through Q4 of this year. While the analysis is not without risks and uncertainties, the overall outlook for the cryptocurrency market over the next 12 to 18 months looks promising given the accumulating catalysts and historical precedent.

This article is provided for general informational purposes and is not intended and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.

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