On August, a sharp pullback is nothing to panic about. Bitcoin still has the potential to break through $100,000 this year

According to the Zhitong Finance APP, the price of Bitcoin has risen by more than 30% since the beginning of this year, despite experiencing multiple fluctuations, including a sharp pullback in early August, which greatly dispelled many investors' expectations of the cryptocurrency breaking through $100,000. However, various signs still seem to indicate that Bitcoin has the ability to reach six figures by the end of the year.

Historical Trends Remain Unchanged

The price trend of Bitcoin is usually described as cyclical, often experiencing a brutal cryptocurrency winter after an explosive bull market, laying the foundation for the next surge. This cyclical trend is not only reflected over the span of several years but also within shorter periods. Currently, Bitcoin seems to be following this established rhythm once again.

Historically, Bitcoin's performance in the summer months has been mediocre, with an average return of 6% in June, 7% in July, and -0.07% in August, similar to the observations this year. September typically sees a mild average pullback of -4%, but as sentiment declines, the market begins to rebound from the bottom. The real uptrend begins in October, with Bitcoin's average return reaching 26%, continuing to rise by an average of 36% in November, and further increasing by 11% in December, ending the year with strong returns.

While historical data may paint an optimistic picture, it is important for investors not to rely on historical averages to predict what will happen in the future. Reviewing history is not about predicting exact numbers but showing what might happen under similar market conditions. From this perspective, Bitcoin's performance this year bears striking similarities to past trends. Although only time will tell, history indicates that Bitcoin has the potential to surpass $100,000 by the end of the year, especially considering the historical uptrend of this cryptocurrency in the last quarter.

Additional Positive Factors

Compared to past uptrends, this cryptocurrency bull market has significant similarities and an additional factor to consider, which could provide the extra momentum needed for Bitcoin to reach $100,000: rate cuts.

After about two and a half years of continuous rate hikes, experts believe that the Federal Reserve will pivot at the upcoming September meeting and cut rates by at least 25 basis points. Bitcoin is expected to benefit from this potential decision.

Bitcoin is often seen as a "risk" asset, meaning that when investors are willing to take on more risk for higher returns, this asset tends to perform well. In a low-interest-rate environment, traditional assets like bonds and dividend stocks may lose their appeal, as they typically perform well when interest rates are high. This shift will encourage investors to seek high-risk assets like Bitcoin with greater growth potential In addition, a rate cut could weaken the US dollar, which would also benefit Bitcoin. As a decentralized non-sovereign currency, Bitcoin is often seen as a hedge against the traditional financial system and fiat currencies. When the US dollar depreciates, the attractiveness of Bitcoin as a store of value increases, driving more capital into this cryptocurrency.

Excitingly, the timing of this potential rate cut aligns perfectly with the historical pattern of Bitcoin's strong performance in the last few months of the year.

Bullish Views

The views of many bullish investors also support this expectation.

Recently, macro investor and fund manager Dan Tapiero expressed bullish sentiments towards Bitcoin and Ethereum. He stated, "In the next six months, I believe the price of Bitcoin will exceed $100,000, and the price of Ethereum may also exceed $5,000. I believe a major bull market is on the horizon."

According to this macro investor and fund manager, a rate cut by the Federal Reserve will have a positive impact on Bitcoin.

"When liquidity is abundant, I think the market starts to realize this, and these liquid assets will flow... I've been telling people, look, when rates are at zero, Bitcoin's price is around $65,000, peaking in 2021. Now rates are up to 5%, (Bitcoin's price) is still at this level. When short-term rates adjust from 5% to 2.5% or 3%, Bitcoin should easily double."

Tom Couture, Vice President of Digital Asset Strategy at US investment firm Fundstrat Global Advisors, also pointed out that as interest rates decline, cryptocurrency assets are showing a positive response.

On the other hand, Michael Novogratz, founder of Galaxy Digital and billionaire cryptocurrency investor, believes that favorable political factors may drive Bitcoin to reach a record-breaking $100,000 by the end of this year, or even higher.

Novogratz stated in an interview in June that attitudes towards cryptocurrencies are becoming more positive. The US Securities and Exchange Commission took a step towards approving ETF direct investments in Ethereum. Political donations supporting cryptocurrencies are flowing continuously to US presidential candidates, with these candidates even competing on their stances on cryptocurrencies.

Future Outlook

Although this bull market shares striking similarities with past bull markets, there is no doubt that nothing is certain. Will Bitcoin definitely surpass $100,000 in the next four months? It is highly likely, but if not, there is no need to worry or panic, as both this year and next year, Bitcoin's core fundamentals and prospects will continue to appreciate over time