When to Look For A Bitcoin BottomI want to go on the record with what I will be looking for in the future with Bitcoin BITFINEX:BTCUSD . I have been consistent in my thesis since October 2021 that the bullish cycle of cryptocurrencies was ending upon the failed breakouts of the All Time Highs. Since November I have called the crypto winter and expected it to last through 2023.
On an esoteric note I have observed much optimism among the Bitcoin Maximalists (Maxis) as they continue to "Dollar Cost Average". I have always been critical of this strategy as a Technical Analyst but many believe it is their best hope for acquiring an asset without concern for price. Bitcoin will always go up over a long enough timeline, right? I think that this lingering optimism is categorically not indicative of a bottom. A bottom is when the mainstream narrative is that an asset is a horrible investment and will never go back up. The way this narrative changes is with price decline over a sustained time to build frustration and boredom. It is for that reason I predicted that the crypto winter would need to last more than one full year following the November high or possibly into two years.
From a Technical Analysis perspective using Ichimoku Cloud theory I have observed that price tends to be attracted to the most notable feature of Ichimoku, the Cloud, following a rapid price rise and then decline (otherwise known as a bubble and bust). Once the Kijun Sen (green line) is breached following a rapid advance price tends to be attracted to the Cloud and does very little meaningful movement until the Cloud is reached. This takes both price to move and time to pass for it to occur. We can study past examples of Bitcoin's history for examples:
Bitcoin (Monthly) December 2019: There was a pump fake in Q1 2019 but price did not begin the next cycle until clearing the cloud following COVID
Bitcoin (Monthly) November 2015: Price declined and lingered following the 2013 bull cycle until interacting with the monthly cloud
Bitcoin (Weekly) September 2013: Dropping down to the Weekly as there is insufficient Monthly data this far back. The second leg of the 2013 cycle kicked off once price met the Weekly cloud.
Bitcoin (Weekly) October 2011: Price continued to decline following the 2011 cycle until it met the cloud at which point a bottom was found.
In these past examples a trader could have waited for enough time to pass that price would intersect the cloud and not miss the beginning of the next bull cycle. Technical Analysis is imperfect for predicting the future but it overlays an objective measure that encourages patience. That is what I hope to convey to those looking for a bottom during this bear cycle.
