Bitcoin's Post-Election Surge Raises Questions About Cycle Peak

According to PANews, investors are closely monitoring Bitcoin's potential rise following the U.S. presidential election. In November 2024, Bitcoin surpassed its previous all-time high set in March 2024, marking its first true price discovery phase since breaking the $20,000 mark in December 2020. Historically, such transitions have occurred during acceleration phases characterized by high volatility and profitability. The key question now is whether Bitcoin has reached the peak of this cycle or if there is room for further growth. In November 2024, Bitcoin surged 56%, entering a price discovery period reminiscent of past acceleration phases. Historically, Bitcoin first broke $30 in 2013, soaring to a high of $229 before cooling down. Similarly, in 2017, it surpassed $1,100, entering a price discovery phase and rising to nearly $3,000 before stabilizing. These historical breakthroughs highlight the volatility and profit patterns typical of acceleration phases. Each surge was followed by a period of consolidation, which eventually led to a second upward movement. Although the current cycle's trajectory is not fully developed, these historical similarities suggest a potential for similar upward trends. Bitcoin's weekly volatility has rapidly increased, indicating that the recent consolidation phase may be ending. This behavior aligns with observations from previous acceleration phases, where annual volatility rose consistently. From July 15, 2024, to March 6, 2025, annual volatility increased from 45% to 51%. Bitcoin's volatility historically tends to favor upward movements. Monthly returns, compared to the S&P 500, show higher levels in both directions, with more frequent and larger upward movements. Despite this, pullbacks are inevitable during acceleration phases, posing challenges for investors. However, recent pullbacks have been relatively average compared to previous cycles, suggesting that Bitcoin's volatility may decrease as it matures. While the future remains uncertain, historical experience indicates an increased likelihood of explosive peaks as acceleration phases extend. As of March 3, Bitcoin has been in the latest acceleration phase for 232 days, nearing the peak and sudden reversal seen in previous phases. The acceleration phases in 2010-11, 2013, and 2017 peaked on the 244th, 261st, and 280th days, respectively, indicating a slight extension in each cycle. This does not necessarily mean the current phase will end within this specific timeframe. However, history suggests Bitcoin's acceleration phase may conclude with a dramatic surge, followed by a rapid loss of momentum and reversal. A key indicator to watch during acceleration phases is the number of days Bitcoin reaches all-time highs within a 60-day period. In previous phases, Bitcoin typically experienced two significant surges, the first occurring after the election. If a new all-time high is imminent, its starting price will be close to $110,000. It is noteworthy that the second surge failed only once, in November 2021. As the current cycle continues to be monitored, it is important to observe whether Bitcoin follows its historical pattern or begins to show signs of divergence.