The cryptocurrency market has returned to declines after a brief recovery yesterday. Bitcoin falls below $64,000, losing 2.00% and thus trading below the profit levels for short-term investors. This particularly weak period comes at a time when the stock market is setting new historical highs almost every week. Has the bull market in cryptocurrencies already ended?
It's hard to give a clear answer to this question. However, we can look at several charts that may provide some clues for the coming months.
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Historically, Bitcoin has consolidated for at least 2-3 months after a halving. As can be seen on the chart above, in this cycle, increases occurred much earlier due to significant inflows into spot ETFs. Considering historical cycles, we can still expect 1-2 months of further consolidation before any movement begins. However, an additional variable to consider is the potential slowdown in the USA and high interest rates. It's hard to imagine the continuation of a bull market in cryptocurrencies during a possible recession in the USA.
Inflows into ETFs also contribute to the supply pressure. Last week, we saw the largest net outflows from ETF funds since January this year.
On the other hand, looking at the ranking of ETFs by inflows since their launch, Bitcoin ETFs remain at record high levels.
Moreover, the upcoming months have historically not been the best for both the cryptocurrency and stock markets. The holiday period in the USA is characterized by lower liquidity and more sluggishness. Therefore, any movements may be limited. Especially, September and August have performed poorly.
