What to expect of bitcoin's price according to seasonality
Three ways to assess where the price could go by year end.
1. This price cycle seems more like the 2011-2013 cycle in terms of seasonality.
Comparing each of the cycle’s years (see next chart below):
2011 and 2019: strong price increase in the 1st half of the year, with the year’s high in June, then a reversal in the 2nd half of the year.
2012 and 2020: Bitcoin price consolidating in the 1st half of the year and then increasing sharply in the 2nd half, ending the year at the highest level of the year, and at an All-Time-High (ATH) in the case of 2020.
2013 and 2021: Price in both 2013 and 2021 increased to a fresh ATH in April and then retraced. In 2013, prices consolidated from May to September, then increased sharply in the last quarter.
Under this scenario we should expect bitcoin price to be consolidating most of 2021 and increase sharply in the last quarter of the year.
2. If bitcoin’s price was to follow the behavior observed in previous years, it will most likely end 2021 at a fresh ATH.
Yearly price index shows that bitcoin’s price was increasing, up until early May, at one of the fastest pace in history (blue line in the next chart), and only below the price index of 2011 and 2013. The red lines represent the bear years (2014 and 2018).
If the price was to follow the behavior observed in previous years, it would end 2021 at the levels shown in the table below.
2011: $461,698 | 2012: $74,605 | 2013: $1,607,854
2014: $12,521 <-- (bear year)
2015: $40,105 | 2016: $64,968 | 2017: $410,147
2018: $8,045 <-- (bear year)
2019: $55,298 | 2020: $118,186 |
3. Price should recover and increase much further in 2021 if bitcoin price cycle behavior holds.
It is important to keep in mind that bitcoin price moves in well established 4-year cycles. Starting from 2011, prices have had 3 bull years and then a bear year (2011-2014 and 2015-2018).
We are in the third year of the current 4-year cycle (2019-2022), which has always had the highest price gains (see chart below).
Conclusion: under seasonal and cycle analysis, price could consolidate for the next 4-5 months and then increase to a fresh ATH in the last quarter of the year.