In a recent development, leading investment bank Morgan Stanley has weighed in on when the lingering Bitcoin bear market is likely to end. Interestingly, they share some similar views with analysts who have made predictions in the past. 

Bitcoin Halving A Major Factor

In an article released by the investment bank, Morgan Stanley highlighted Bitcoin’s importance as the leading crypto and how the Bitcoin Halving, which is set to take place in April 2024, could affect its price and other crypto tokens by extension. 

Bitcoin halving is a deflationary measure that occurs every four years, during which the rewards of miners are ‘halved’, thereby creating scarcity. According to the bank, this event could potentially trigger a bull run as it has done in the past. 

The article further noted how there have been such bull runs in the past following the three halving events that have occurred and how the bull run lasted for 12 to 18 months after then. 

Morgan Stanley’s prediction echoes that of several crypto analysts who have predicted that the Bitcoin Halving could spark the next bull run. Specifically, the co-founder of Delphi Digital, Kevin Kell, while highlighting metrics that showed that the next bull run was close, noted that Bitcoin has broken to a new all-time high (ATH) seven months after the last two halvings occurred.

Understanding The Four Phases Of Crypto

While trying to avoid giving a definite time as to when to invest ahead of the next bull run, Morgan Stanley noted the importance of learning about the ‘four phases of cryptocurrency prices’ in order for one to make a conviction play as to the right time to invest. These four phases are said to correspond roughly to the four seasons of the year. 

The first phase is ‘Summer’ when Bitcoin experiences the most gains, which comes after the halving. The bull run is said to begin with the event and continue when Bitcoin’s price hits its prior peak. The next is the ‘Fall’ when the price “surpasses the old high.” This is the period when the bull market runs its full course after reaching a new high.

After ‘Fall’ comes ‘Winter’, which is when the bear market surfaces as this is the period that investors are locking in their gains, resulting in a massive sell-off. This usually occurs between the “new peak and the next trough.” Historically, there have been three winters, with each of them lasting for about 13 months. 

‘Spring’ is the last phase in the cycle and the one that potentially kickstarts the next bull run (another Summer). This is the period “preceding each halving,’ when Bitcoin’s price “generally recovers from the cycle’s low point, but investor interest tends to be weak.”

By understanding these phases, crypto investors could be well-prepared to take advantage of the next bull run to make the most profits.

BTC continues recovery as sentiment recovers | Source: BTCUSD on Tradingview.com

Featured image from Forbes, chart from Tradingview.com