The recent bear market in digital assets may have reached its end, Morgan Stanley Wealth Management suggested in a blog post on its website.
The Tuesday post stated, “Based on current data, signs suggest that crypto winter may be in the past and that crypto spring is likely on the horizon.”
The investment manager observes that in prior crypto winters, the low point for bitcoin (BTC) happened 12 to 14 months after the high point. In November 2021, the cryptocurrency hit an all-time high of over $68,000 before bottoming out a year later.
Strategist Denny Galindo stated that “a 50% increase in price from bitcoin’s low is typically a good sign that the trough has been achieved.” The biggest cryptocurrency in the world has increased 77% from its lows last year and 70% so far this year.
The financial manager emphasized the significance of the bitcoin fall, saying that past price lows were roughly 83% below their corresponding highs. By November 2022, BTC had decreased by almost 77%, to roughly $16,000.
According to Galindo, the majority of bitcoin gains occur immediately following the halving, and this “bull-run period starts with the halving event and ends once the price of bitcoin reaches its prior peak.” The reward for successfully mining a bitcoin block is reduced by half every four years, or “the halving,” which lowers the inflationary pressure on BTC.
“Galindo highlighted that Bitcoin’s price has historically experienced three notable upward trends, each coinciding with the aftermath of a halving event. These periods of heightened market activity consistently emerged within a timeframe of 12 to 18 months following the halving.” These bull runs can be attributed to the intentional reduction in the supply of new bitcoins, creating a scarcity that drives up demand and potentially propels the price of Bitcoin.”