Why Bitcoin's Bullish Trend Could Reach $500,000

Bitcoin's price surge following the approval of spot Bitcoin ETFs has lost momentum, but the outlook remains encouraging for both the short and long term. Historical patterns suggest that Bitcoin could reach $500,000 by 2025.

Bitcoin’s Bullish Trend: Why $500,000 is Possible

The recent approval of spot Bitcoin ETFs in early January has sent the cryptocurrency’s price surging, with a 70% increase following the approval. Although the price has since lost momentum, falling 14% in mid-March, the outlook for Bitcoin remains encouraging for both the short and long term.

Encouraging Signs From Historical Patterns

According to the Motley Fool, Bitcoin is mirroring a historic pattern spanning four years, where it undergoes a bearish trend initially, followed by a bullish trend in the final year. After witnessing a bear market, followed by a recovery in the second year and continued progress in the third, the cryptocurrency goes through the process of halving, after which a cyclical peak hits.

Bitcoin’s halving process

If we follow the pattern, Bitcoin underwent a bear market in 2022, putting us currently in the third year with halving taking place in April. Although past performance is not a guarantee of the future outcome, we can speculate and leverage Bitcoin’s historical performance to gain insights into what 2025, the fourth year, might hold.

Using Past Patterns to Forecast Bitcoin Price

In the third year, when halving occurs, according to Motley Fool, Bitcoin surges by 125% on average, which places the digital asset to end 2024 by reaching $100,000, starting from its early 2024 price of $44,000.

Bitcoin’s price surge following halving

According to past trends, the digital asset surges drastically by 400%, on average, in the year following the halving. If the trend is repeated and Bitcoin finishes this year in line with historical averages, its price could potentially reach around $500,000 by 2025.

Favorable Changes in Demand-Supply Dynamics

Favorable changes in the demand-supply dynamics of the digital currency increase the likelihood of the price projections becoming a reality. According to Coindesk, historically, July has been a bullish month for the digital asset, with ETFs witnessing about $130 million in inflows on the first day of July.

Bitcoin inflows in July

With the supply of the cryptocurrency curbed by 50% since its halving in April, we might see increased inflows into spot Bitcoin ETFs in the coming months.

Rate Cut by Fed to Boost Prices

If the Fed cuts rates in late 2024, investors may view Bitcoin as an alternative to the depreciating dollar, which moves inversely with interest rate adjustments by the Fed. The rising probability of the Fed cutting interest rates later this year, coupled with de-dollarization, tends to create opportunities in digital currencies.