A recent report by research firm Delphi Digital illustrates the predictable consistency of price action and trends within the crypto market.this Report An in-depth look at the correlation between the 4-year Bitcoin (BTC) cycle and broader economic trends.

Analysts at Delphi Digital said the current price consolidation at $30,000 is similar to the period between 2015 and 2017, with indicators pointing to a new all-time high by the fourth quarter of 2024.

Impact of Economic Cycles on Bitcoin Performance

Delphi’s analysis draws attention to the inherent cyclicality of the cryptocurrency market. This cyclicality is evidenced by the time between peak and trough bottoms, the recovery period to the previous cycle high, and the time it takes for prices to rally to the new cycle top. Delphi uses Bitcoin as a benchmark to outline a general blueprint for the cryptocurrency market cycle.

Bitcoin price in USD (logarithmic scale) reflects a 4-year cycle.Source: Delphi Digital

These 4-year cycles include Bitcoin reaching a new ATH, undergoing a roughly 80% retracement, and then bottoming out about a year later. A recovery to previous highs tends to follow within two years, and finally, prices rise for another year to new all-time highs.

The study revealed a fascinating correlation between Bitcoin price peaks and shifts in the business cycle, as seen in the ISM Manufacturing Index.

BTC/USD YoY (orange) vs. US ISM Manufacturing Index YoY (white).Source: Delphi Digital

During Bitcoin price peaks, the ISM often shows signs of peaking, with peaks in active addresses, transaction volume, and fees. Conversely, as the business cycle shows signs of recovery, so will the level of network activity.

The report highlights the role of Bitcoin halving in these cycles. The last two halvings happened about 18 months after BTC bottomed out, and about 7 months before the new ATH. This historical pattern suggests that Bitcoin is expected to see a new ATH by the fourth quarter of 2024, coinciding with the expected timing of the next halving.

Bitcoin price action looks similar to 2015-2017 pre-bull phase

The report also noted that the current market environment bears striking similarities to the period between 2015 and 2017. The consistency of market behavior, economic indicators, and historical trends suggests that the current phase resembles a period of increased risk exposure and potential growth. As experienced during that period.

The report noted that the market’s trading patterns, especially those of the S&P 500, were very similar to the trajectories observed between 2015 and 2017. These patterns persist even in times of uncertainty, such as an income recession, reflecting the mood of that period.

The consistent pattern of Bitcoin cycles, its synchronicity with broader economic changes, and the upcoming 2024 halving all contribute to this paper.

US ISM manufacturing index, current (orange) and 2013-2019 cycle (white).Source: Delphi Digital

Delphi highlighted the parallels between the gloomy global growth outlook in 2015-2016 and near-term economic uncertainty in 2021-22. Factors such as a stronger dollar and changes in the global liquidity cycle echo the past.

The report highlights the striking similarities between gold’s performance then and now, under the influence of currency debasement fears. These similarities support the argument that macroeconomic conditions are following familiar trajectories.

Gold price in USD (logarithmic scale), current (orange) and 2015-2019 period (white).Source: Delphi Digital

related: Are Bitcoin’s Record Low Volatility and Fewer Short-Term Holders a Bullish Signal?

The outlook for the cryptocurrency market is positive, but there are some red flags

Delphi’s analysis provides compelling evidence that crypto markets operate in cyclical patterns that reflect changes in the broader economy. The report predicts an all-time high by the fourth quarter of 2024, which is in line with historical halving patterns. This timing, combined with the state of indicators such as the ISM and expectations for a new liquidity cycle, strengthens the argument for a cycle similar to the 2015-2017 cycle.

The upcoming Bitcoin halving in 2024 has further strengthened their expectations of a possible bull run in the fourth quarter of that year. While the analysis is not without risks and uncertainties, the overall outlook for the cryptocurrency market over the next 12-18 months appears promising given the stacked catalysts and historical precedent.