Crypto long cycle indicator
Updated
I cannot take credit for this. I believe I saw this basic layout posted on Twitter by Will Clemente some time ago. I just re-created it myself so I could have the ability to watch in real time the larger crypto market cycles with this indicator.
It is the market cap of stable coins USDC and USDT added together in parentheses (USDC+USDT) divided by total crypto market cap on trading view. It ends up looking like (USDC+USDT)/TOTAL as the ticker.
You then use the logarithmic scale and draw parallel lines to hit the approximate market tops and bottoms.
Well, with today's pump to above
31K for BTC, it appears we're just about hitting the bottom line that indicates we're near a market top again for the crypto space for now.
We're in that weird, in-between halvings timeframe, post the year-long market sell-off. I had been making the comparison to 2019's market for some time, and we just may well have seen the top of the crypto space for the year, or are very near to seeing it. I expect a slow grind down from here to the end of the year, it might start to try to rally again just before the halving, it tried to in 2020, but then the whole COVID situation caused a flash crash across all assets. If we don't have a similar catastrophe pre-halving, maybe the rally momentum early next year after a slow grind down for the remainder of this year simply follows through. Then we get the real mania bull cycle ala 2020-2021 all over again for 2024-2025.
That's at least how I see this playing out. If you were smart enough to buy Bitcoin during the December lows, I'd start thinking about taking profits here and wait for it to find another decent supported low late this year/early next year if we are indeed sort-of repeating what happened in 2019.
It is the market cap of stable coins USDC and USDT added together in parentheses (USDC+USDT) divided by total crypto market cap on trading view. It ends up looking like (USDC+USDT)/TOTAL as the ticker.
You then use the logarithmic scale and draw parallel lines to hit the approximate market tops and bottoms.
Well, with today's pump to above
31K for BTC, it appears we're just about hitting the bottom line that indicates we're near a market top again for the crypto space for now.We're in that weird, in-between halvings timeframe, post the year-long market sell-off. I had been making the comparison to 2019's market for some time, and we just may well have seen the top of the crypto space for the year, or are very near to seeing it. I expect a slow grind down from here to the end of the year, it might start to try to rally again just before the halving, it tried to in 2020, but then the whole COVID situation caused a flash crash across all assets. If we don't have a similar catastrophe pre-halving, maybe the rally momentum early next year after a slow grind down for the remainder of this year simply follows through. Then we get the real mania bull cycle ala 2020-2021 all over again for 2024-2025.
That's at least how I see this playing out. If you were smart enough to buy Bitcoin during the December lows, I'd start thinking about taking profits here and wait for it to find another decent supported low late this year/early next year if we are indeed sort-of repeating what happened in 2019.
Note
It be easier to copy this as the ticker/formula: (CRYPTOCAP:USDT+CRYPTOCAP:USDC)/CRYPTOCAP:TOTALYou should be able to switch CRYPTOCAP:USDT and CRYPTOCAP:USDC and get the same result.
Note
I have a revised version of this that includes DAI and BUSD by marketcap in the formula and got some pretty interesting results. It doesn't go back quite as far, you will no longer see the 2018 market bottom or the summer 2019 top, but you do see the top of the early 2022 rally before the halving and COVID crash, and it seems to indicate further trading opportunities intracycle, now showing the summer '21 drawdown touch the top parallel, and also more obviously shows the BTC bottom in November-December '22.The Eth '22 bottom kind of blows out the top of the top parallel, but because it lines up so nicely with other trade opportunities, I am more than happy to leave it that way:
Note
My favorite version now is to remove BUSD, and use DAI, USDC and USDT cryptocaps in the calculation. Pretty nice, clean signals.Note
Well, we're a few months on from my pointing out, on the day, that maybe ~$31,000 was the peak for the year. So far so good. We're starting to see more bearish indications for equities as well. I am not a buyer here for sure.I do think we will see another solid buy opportunity either towards the end of this year/start of 2024, as well as post-halving. Keep your eyes peeled for sure! But for now, I'm staying out.
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