Bitcoin and Ethereum Mirror Patterns from Past Bull Markets

In the latest research report by Coinbase Research and Glassnode, it has been observed that Bitcoin and Ethereum are currently following patterns similar to previous years, with their prices increasing by 500% and 1,000% respectively. The analysis highlights the resemblances in the cryptocurrency market cycles unfolding, particularly between 2018 and 2022, marked by a significant surge in the prices of both cryptocurrencies.

Analysts emphasize various cyclical indicators, such as unrealized profit/loss and profit-supply sources, reflecting trends from the past. These metrics indicate that the current state of the cryptocurrency market does not mirror the exuberant conditions witnessed during the peak of 2023. It suggests that the market still holds the potential for further substantial surges.

Despite acknowledging the potentially positive impact of the upcoming Bitcoin halving, Coinbase Research maintains a cautious stance. The research points out that there have only been three halving events in history, making it challenging to establish a complete model, especially when considering previous events influenced by factors such as global liquidity measures.

The upcoming Bitcoin halving event, projected to occur in April 2024 based on the current mining rate, is expected to reduce the block reward from 6.25 to 3.125 BTC.

In 2023, Ethereum witnessed a price surge of over 90%, attributed to various factors such as the success of the Shapella upgrade and investors hoarding ETH in anticipation of a price increase upon ETF approval.

Currently, investor focus is shifting towards the upcoming Ethereum upgrade named Cancun. It is anticipated to enhance scalability and security, enabling cost-effective Layer 2 transactions. The successful deployment of Cancun could lead to a substantial increase in the number of transactions processed on the Ethereum network.

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Coinbase’s analysis notes that both Bitcoin and Ethereum have undergone two cycles, encompassing both bull and bear markets. The ongoing cycle, initiated in 2022, closely mirrors observed patterns from previous cycles.