While the fundamentals are still very complicated on the stock market at present, with the FED intransigent, trade war/diplomacy (deadline set for July 9 to reach trade agreements) and extreme geopolitical tensions, can the bitcoin price withstand all these challenges and continue its annual bull run over the summer? Let's take a look at a number of elements, including a major technical risk and two factors that are, on the contrary, favorable to a new record this summer.
1) Bitcoin's bullish cycle linked to the spring 2024 halving is still long
Let's start with the cyclical aspect of bitcoin, the famous 4-year cycle built around the quadrennial halving. The last halving took place in April 2024, and if the cycle repetition works again, then the current cycle is due to end at the end of 2025. So there's still time for bitcoin to set a new record, even if it comes under short-term pressure - it still has 5 months to go.
The first chart below summarizes the 4-year cycle by averaging the time and price of all previous cycles since 2009. Our current cycle is represented by the red curve, and in terms of probability, the end of the cycle is expected between October and December 2025.
There's still time, and this is the first major piece of information in our article.
2) A bearish technical divergence in weekly data calls for great caution
On the other hand, technical analysis of the bitcoin price in weekly data gives a warning signal with the presence of a bearish price/momentum divergence, market momentum being represented here by the RSI technical indicator.
This bearish divergence resembles that at the end of the previous cycle in November 2021, but the comparison stops here. At that time, all end-of-cycle models were on alert, but this is not the case today. Nevertheless, we must be aware that this bearish divergence could be a pressure factor this summer.
3) Global liquidity as represented by the M2 monetary aggregate gives grounds for optimism about bitcoin's summer trend
Global M2 deploys a strong positive correlation with the bitcoin price, and it takes an average of 12 weeks for this liquidity to act on BTC. This monetary aggregate measures the sum of the money supply (M2) of the major economies - USA, China, Eurozone - converted into US dollars. It includes sight deposits, savings accounts and certain short-term instruments, representing the gross liquidity immediately available in the global economy.
This level of liquidity is directly influenced by monetary (key rates, QE/QT), fiscal and wage policies. The evolution of the US dollar plays a crucial role: a strong dollar mechanically reduces global M2 in USD, while a weak dollar increases it. In this respect, Chinese and US dynamics are often divergent, as they are driven by different credit logics (centralized planning on the Chinese side, rate-based adjustment on the US side).
Since the beginning of April, Bitcoin has been on a marked uptrend. This progression, which we have followed step by step, raises an essential question: can this momentum be maintained this summer, despite the fundamental challenges of the moment?
Such a hypothesis is plausible, provided that a key - and often underestimated - driver continues to act: the unprecedented increase in global liquidity, as measured by the M2 monetary aggregate. According to the latest available data, global M2 has set a new all-time record, and this is a factor supporting the BTC trend for the first part of the summer.
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services.
Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA.
Products and services of Swissquote are only intended for those permitted to receive them under local law.
All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
1) Bitcoin's bullish cycle linked to the spring 2024 halving is still long
Let's start with the cyclical aspect of bitcoin, the famous 4-year cycle built around the quadrennial halving. The last halving took place in April 2024, and if the cycle repetition works again, then the current cycle is due to end at the end of 2025. So there's still time for bitcoin to set a new record, even if it comes under short-term pressure - it still has 5 months to go.
The first chart below summarizes the 4-year cycle by averaging the time and price of all previous cycles since 2009. Our current cycle is represented by the red curve, and in terms of probability, the end of the cycle is expected between October and December 2025.
There's still time, and this is the first major piece of information in our article.
2) A bearish technical divergence in weekly data calls for great caution
On the other hand, technical analysis of the bitcoin price in weekly data gives a warning signal with the presence of a bearish price/momentum divergence, market momentum being represented here by the RSI technical indicator.
This bearish divergence resembles that at the end of the previous cycle in November 2021, but the comparison stops here. At that time, all end-of-cycle models were on alert, but this is not the case today. Nevertheless, we must be aware that this bearish divergence could be a pressure factor this summer.
3) Global liquidity as represented by the M2 monetary aggregate gives grounds for optimism about bitcoin's summer trend
Global M2 deploys a strong positive correlation with the bitcoin price, and it takes an average of 12 weeks for this liquidity to act on BTC. This monetary aggregate measures the sum of the money supply (M2) of the major economies - USA, China, Eurozone - converted into US dollars. It includes sight deposits, savings accounts and certain short-term instruments, representing the gross liquidity immediately available in the global economy.
This level of liquidity is directly influenced by monetary (key rates, QE/QT), fiscal and wage policies. The evolution of the US dollar plays a crucial role: a strong dollar mechanically reduces global M2 in USD, while a weak dollar increases it. In this respect, Chinese and US dynamics are often divergent, as they are driven by different credit logics (centralized planning on the Chinese side, rate-based adjustment on the US side).
Since the beginning of April, Bitcoin has been on a marked uptrend. This progression, which we have followed step by step, raises an essential question: can this momentum be maintained this summer, despite the fundamental challenges of the moment?
Such a hypothesis is plausible, provided that a key - and often underestimated - driver continues to act: the unprecedented increase in global liquidity, as measured by the M2 monetary aggregate. According to the latest available data, global M2 has set a new all-time record, and this is a factor supporting the BTC trend for the first part of the summer.
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services.
Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA.
Products and services of Swissquote are only intended for those permitted to receive them under local law.
All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.