Bitcoin could hit new all-time high by the end of this year

“In the 2016 cycle, Bitcoin did not break its all-time high until 229 days after the halving,” cryptocurrency analyst Boyapati said Thursday. “If we follow this exact trajectory, Bitcoin will hit a new all-time high after (Christmas) this year.”

1BTC = $325,000 target

Bitcoin "halving": Every four years (or every 210,000 blocks), miners' block rewards are cut in half. Halving reduces the circulation of Bitcoin, resulting in improved scarcity.

Bitcoin has already experienced three such events. The first two occurred in 2012 and 2016. Each halving resulted in a significant increase in Bitcoin.

Bitcoin price performance after each halving

The last supply cut of Bitcoin took place on May 11, 2020, just 100 days ago. Mr. Boyapati pointed out that BTC often takes more than a year to reach its peak after two halvings. Based on previous predictions, the crypto analyst predicted that the price of one Bitcoin will reach $325,000 by October 2021.

“If we follow the 2016/17 trajectory (which we are now ahead of schedule), the cyclical peak will occur on October 19, 2021, and the peak price will be around (approximately) $325,000.”

Ongoing Bitcoin Price Correction

The new year-to-date high came after a strong upswing that started in March 2020. Amid a global market crash, the price dropped to $3,858, providing ample opportunities for bulls to buy on dips. Later, the Federal Reserve’s open stimulus program to aid the U.S. economy helped the dollar to move further higher against the weakening greenback.

As of Monday, the price of Bitcoin hit $12,486. Strong profit-taking sentiment in the $12,000-12,500 range eased the cryptocurrency’s upward trend. It fell as low as $11,569 during Wednesday’s trading.

Bitcoin chart on TradingView.com shows BTCUSD correcting lower after testing the $12,000-12,500 range

Part of the downside correction in Bitcoin’s price also comes on the uncertainty regarding the Federal Reserve’s stimulus plans.

In the minutes of its July 2020 meeting, released Wednesday afternoon, the Fed said it would continue its policy of bond purchases and near-zero interest rates. However, it did not provide any hints about the path of unconventional measures — such as forward guidance on future interest rates or yield curve control. The unpredictability stressed safe-haven assets like Bitcoin. At the same time, it revived investor interest in the U.S. dollar, which was at a two-year low at the time.

However, according to cryptocurrency analyst Lark Davis, Bitcoin still has enough fuel to break through its previous record highs as long as it maintains near technical support levels.

“Bitcoin is down about 24% and is still above its 200-day moving average, which means this market remains fundamentally bullish.”