With this analysis I want to shed some light on where we currently are in the fourth Bitcoin bull-cycle, compared to the previous three cycles. I measure the cycle from low after previous cycle to high of the cycle. There are different ways of drawing the cycles (comparing halvings for example), but for me this one makes the most sense.
There's several very interesting things that one can deduce from this graph. 1) The cycles are getting less intense. The difference between the top and the low is relatively diminishing, making each cycle less explosive than the previous. 2) The cycles are getting longer. With each new cycle, it takes longer to reach the top of the cycle. "Time is your friend" has never been more fitting.
When we look at the current cycle we can see a couple of things that are standing out from the other cycles. 1) There's been several occasions where the current cycle "went too fast" comparing to other cycles, after which BTC had to cool off for a couple of months. This has been a major thing with the most recent sell-off from 65k > 30k. BTC was ahead of schedule by a lot, so it had to correct by a lot to get below the previous cycle's growth path. 2) The current cycle is the most volatile one, which is caused by the COVID dump last year and the subsequent massive quantitative easing that followed.
In previous analyses I've mentioned that I think that we're currently in a mid-cycle correction. My arguments for this are that this cycle is too short to be completed. At the very least we "should" have another 8-14 months for the current cycle. Furthermore, the top of the cycle is not even close where it should be, compared to previous cycles. Looking at the blue trend-line, the top of the cycle should be somewhere from 100k-150k (rough estimate).
To conclude, I'm confident that Bitcoin will see another strong bullish push. The current cycle is far from over.
here is a theory to consider which I feel a lot of people miss some of the most basic concepts of financial markets and what moves them.
As more interest or participants enter the market, more volume etc = more liquidity, during the peak of this run we had roughly 10x the daily volume we did from 2017, this is a large increase which also accounts for a large increase in liquidity.
With more participants and liquidity entering the market this will stabilize price and reduce the over all volatility or expected returns. The dreams of 1 billion dollar bitcoin are ridiculous, the amount of money and buying pressure that would be needed to sustain moves to those levels is beyond fathomable, and with the increase in volume to drive the markets to these levels subsequently increases liquidity which = stabilization and reduction in volatility.
In other words they work against each other and makes it very hard to continue on the path it was heading 8 or so years ago.
TradingShot
⋅
Correct. That is the theoretical comparison I've been associating with for over 2 years. I have made a lot of literature on Bitcoin's cyclical divergence and convergence patterns. I am glad it attracts more and more interest by traders:
FieryTrading
⋅
@TradingShot, Cycles are becoming very apparent now. Thanks for your insights.
TheSignalyst
⋅
well done man Fiery! very useful tips here
InkyGrip
⋅
nice setup my friend! 🦐👍🏻
CryptoidiotQ
⋅
I agree with this analysis. I've recently done an analysis of the longer cycles that I posted on here too, I think we're in the shakeout period that we've seen in every previous cycle, and this consolidation will form a platform that price will spring off of to a new ATH. I'm looking for a top around may or june next year, possibly earlier depending on when this range breaks.
small question, I'm kinda new to TV, how the heck can I draw the price action of the previous cycles on the same chart like you did? I've been trying to figure it out for weeks lol. I think the halving cycle is incredibly important for understanding this market and I want to do the best analysis that I can.
As more interest or participants enter the market, more volume etc = more liquidity, during the peak of this run we had roughly 10x the daily volume we did from 2017, this is a large increase which also accounts for a large increase in liquidity.
With more participants and liquidity entering the market this will stabilize price and reduce the over all volatility or expected returns. The dreams of 1 billion dollar bitcoin are ridiculous, the amount of money and buying pressure that would be needed to sustain moves to those levels is beyond fathomable, and with the increase in volume to drive the markets to these levels subsequently increases liquidity which = stabilization and reduction in volatility.
In other words they work against each other and makes it very hard to continue on the path it was heading 8 or so years ago.