New analysis suggests that Bitcoin’s four-year cycle has been overturned – and the world’s largest cryptocurrency could rebound to $140,000 at some point in the next 180 days.
Copper said the emergence of exchange-traded funds tracking the spot price of BTC has changed the behavior of the digital asset and given way to what is known as the “cost basis return cycle.”
“In 2024/2025, Bitcoin exhibits the same repeatable pattern: price breaks out to new all-time highs, corrects sharply, and then finds near-perfect support on the ETF investor cost basis before embarking on the next expansion.”
The firm’s analysis shows that this has happened three times since the ETFs were launched in January 2024, with returns exceeding 60% in each cycle.
Image: Copper
Copper also claimed that this exposed a huge divide between crypto-focused traders and institutional investors, with some Bitcoin commentators claiming it was the “worst bull run ever.”
So… once BTC enters price discovery mode, what exactly causes these large corrections? Well, its analysis suggests that institutions rebalancing their portfolios are to blame — an activity that “translates Bitcoin’s volatility into realized returns.”
“Institutions are not ‘staking Sats’ – in fact, most institutions don’t care about Sats at all because Bitcoin is available through equity ETF shares. What they care about is the risk-adjusted contribution to a portfolio.”
Generally speaking, institutions are recommended to allocate 2% to 5% of their funds to Bitcoin, but sudden increases in price can have a huge impact.
“Without rebalancing, a 2% Bitcoin allocation would drift to 6.2% in less than 180 days during these cycles. A 5% allocation would be dangerously close to double digits.”
Fadi Aboualfa, head of copper research crypto news Bitcoin is at a critical juncture right now.
“With BTC currently trading close to a cost base of $84,000, the model suggests a rise to $140,000 over the next 180 days. If the cost base rises 10% to 15% like in previous cycles, the premium generated from past peaks would yield a target range of $138,000 to $148,000.”
The prospect of a return to all-time highs within the next six months will provide traders with much-needed “hope.” However, other analysts warn that there are currently few catalysts to propel Bitcoin forward. The Federal Reserve’s recent interest rate cut of 0.25 percentage points has been largely priced in by the market, with policymakers suggesting that there may be only one rate cut in 2026.
A big test will involve what happens if Bitcoin’s value falls below ETF investors’ cost basis, and whether the sell-off intensifies if institutions lose money over a long period of time.
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Inflows into Wall Street’s spot Bitcoin ETFs have fallen sharply so far in December and have failed to make up for last month’s eye-popping outflows, data from SoSoValue shows.
Products from companies such as BlackRock and Fidelity currently account for 6.57% of Bitcoin’s total market capitalization, meaning continued outflows could put significant pressure on the digital asset’s valuation.
Further price declines would also spell trouble for Strategy, which has now accumulated 660,625 BTC in reserves — well over 3% of the BTC supply. Most of these acquisitions have been financed with debt, and the company has acknowledged that it may be forced to start selling if its mNAV (which compares Strategy’s market capitalization to its BTC holdings) falls below 1.
Strategy Analytics’ consistent push to continue buying Bitcoin throughout the bull market has meant that the average price per Bitcoin has increased significantly over the past year, with less room for upside in the bear market. We also become eroded as the buffer between Bitcoin price and ETF cost basis. Amberdata research shows that “margins of safety have compressed to levels not seen since early 2024.”
“Early-stage funds are patient. The huge profits allow holders to absorb losses without pressure. Later-stage funds are tight. They have investment committees asking questions and applying redemption pressure from clients who bought for $100,000.”
Amberdata believes that a drop below $80,000 could have huge consequences and lead to a huge change in investor psychology and a series of negative headlines.
A bigger question that might need to be asked is: If institutions exit Bitcoin ETFs, will they return?
Read original story “Bitcoin could hit $140,000 in next 180 days, experts say” by Connor Sephton of Cryptonews.com