Bitcoin - Cyclicality in Review
Updated
A long-awaited and overdue piece of analysis, my current view of the BTC bull market. These techniques are how I was able to gauge a market top in the previous cycle, you'll find the analysis from Dec 2017 linked to this idea.
Although countless mistakes have been made throughout the years, like everyone else, I believe this piece of analysis will be beneficial to all traders as a reference throughout the current cycle. I've been using these methods to manage my holdings and dictate when/where I should be sitting in stablecoins and when/where I should be accumulating long term holdings.
I'll structure this post as best as possible as there's a lot of points I need to get across for those to fully understand my long term view, so be patient and enjoy!
To begin we'll look at a comparison of the 2013-2015 and 2017-2018 bear markets.
As you can see the decline from market tops to market lows was extremely similar in percentage decline and duration. The most interesting point about these two cycles is the seasonality, both the all-time highs and all-time lows occurred at the same time of year.
Now let's take a look at a comparison of the 2015-2018 and present bull market.
The previous cycle lasted 1,064 days with a total increase of 12,807% which is unlikely we will exceed. The current cycle stands at a total of 770 days with an increase of 1,250% (based on the current all-time high). When you compare the two it brings up the question of whether we will see similarities in these cycles based on duration and seasonality.
Once we take a look at what bitcoin achieved within the same timeframe of 770 days in the previous cycle, it's quite clear that we have far more momentum, not to mention the fact we experienced a minor cycle from June 2019 to March 2020 resulting in a 72% correction. Bitcoin is an absolute powerhouse!
Back to the point on duration and seasonality, if we see this hold true and the current bull market lasts an average of 1,064 days it will end in November/December 2021 which is far sooner than I initially expected.
This may seem unrealistic until you look at how price is currently moving, which brings us to my core analysis and the entire focus of this post.
Comparing both cycles we can see a clear area where price begins to accelerate and when price no longer adheres to the lower support trendline. It's at this stage price gains momentum and forms a higher support trendline which we can use as a guide for future corrections.
2015-2018
Present
It's doubtful we'll see bitcoin return to the lower support trendline at $20,000, which is why I see us forming higher support and this being the base level for future corrections. Based on this information, it's realistic to expect bitcoin to return to $28,500-$27,000 resulting in an overall, healthy correction of 32-35%.
If we see this come to fruition, then the following analysis is a likely scenario going forward and we could see $75,000 within 6 weeks.
I'll continue to expand on these ideas as price progresses in the coming weeks/months.
Thank you to all those who read the entire post, if you would kindly like and share it would be much appreciated as this took some time to put together.
Although countless mistakes have been made throughout the years, like everyone else, I believe this piece of analysis will be beneficial to all traders as a reference throughout the current cycle. I've been using these methods to manage my holdings and dictate when/where I should be sitting in stablecoins and when/where I should be accumulating long term holdings.
I'll structure this post as best as possible as there's a lot of points I need to get across for those to fully understand my long term view, so be patient and enjoy!
To begin we'll look at a comparison of the 2013-2015 and 2017-2018 bear markets.
As you can see the decline from market tops to market lows was extremely similar in percentage decline and duration. The most interesting point about these two cycles is the seasonality, both the all-time highs and all-time lows occurred at the same time of year.
Now let's take a look at a comparison of the 2015-2018 and present bull market.
The previous cycle lasted 1,064 days with a total increase of 12,807% which is unlikely we will exceed. The current cycle stands at a total of 770 days with an increase of 1,250% (based on the current all-time high). When you compare the two it brings up the question of whether we will see similarities in these cycles based on duration and seasonality.
Once we take a look at what bitcoin achieved within the same timeframe of 770 days in the previous cycle, it's quite clear that we have far more momentum, not to mention the fact we experienced a minor cycle from June 2019 to March 2020 resulting in a 72% correction. Bitcoin is an absolute powerhouse!
Back to the point on duration and seasonality, if we see this hold true and the current bull market lasts an average of 1,064 days it will end in November/December 2021 which is far sooner than I initially expected.
This may seem unrealistic until you look at how price is currently moving, which brings us to my core analysis and the entire focus of this post.
Comparing both cycles we can see a clear area where price begins to accelerate and when price no longer adheres to the lower support trendline. It's at this stage price gains momentum and forms a higher support trendline which we can use as a guide for future corrections.
2015-2018
Present
It's doubtful we'll see bitcoin return to the lower support trendline at $20,000, which is why I see us forming higher support and this being the base level for future corrections. Based on this information, it's realistic to expect bitcoin to return to $28,500-$27,000 resulting in an overall, healthy correction of 32-35%.
If we see this come to fruition, then the following analysis is a likely scenario going forward and we could see $75,000 within 6 weeks.
I'll continue to expand on these ideas as price progresses in the coming weeks/months.
Thank you to all those who read the entire post, if you would kindly like and share it would be much appreciated as this took some time to put together.
Note
As anticipated we're seeing price return to $28,000 range.We'll be in a great position to buy soon.
Note
The correction didn't fully materialise and price is currently re-testing broken resistance.Note
To all those who follow my analysis it's worth noting BTC is holding support on the weekly extremely well (press play on the chart). We lost support on the acceleration trendline, which is not surprising considering the level of growth we've seen since Oct 2020.I may revisit this chart and provide some more insight on future movements.
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