BITCOIN What is next narrative it will break?Since th 2021 Bear Cycle started, Bitcoin (BTCUSD) entered a phase that few could have predicted. You can very easily even call it the 'Cycle of Narrative Destruction' as since the June 13 2022 break below the previous All Time High (ATH), Bitcoin started breaking narratives that have been well established throughout its history and few thought could break.
** Five major narrative breaks so far **
Starting from the very first narrative destruction on the week of June 13 2022 (we are viewing this chart on the 1W time-frame), Bitcoin managed to break below the previous ATH (19350) for the first every in its history. Then a few months later in November 2022 in the aftermath of the FTX crash, it broke below the 1W MA300 (red trend-line) also for the first time ever. This resulted into the first ever 1W Death Cross around February 2023 and following the recovery during 2023, it naturally formed the first ever 1W Golden Cross around the last week of December first week of January 2024. The most recent narrative that BTC has destroyed was this week as it made a new ATH marginally above $69000, which was the first time it did so before the Cycle's Halving (which is due in mid April 2024).
** Which narrative is next to break? **
As you can see, those are 5 major narrative breaks in the span of 18 months. So what narrative will BTC break next? The first that comes to our mind as the market is rising that fast this high, is the Theory of Diminishing Returns (TODR). This theory implies (and has been correct so far) that each Cycle delivers lower returns than the previous. As you see on the charts, the first Cycle gave +531681% returns, the next one +62325%, then +11808% and the most recent +2051%.
** So 330k is realistic?? **
If this narrative is to break, it means that BTC would need to make a little over +2051% during the current Cycle. That suggests that we can be looking at a Cycle peak above $330000! Of course if that happens, it would mean that Bitcoin will also break above its historic Parabolic Growth Channel, which can be considered another narrative destruction.
But what do you think? Can the Theory of Diminishing Returns be the next narrative to break and if not, which one do you think it will be? Feel free to let us know in the comments section below!
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