Bitcoin: Why $100K Before the Market Cycle Top Makes Sense
Updated
A direct comparison of previous Bitcoin peaks and cycle lengths shows that cycles are likely lengthening. From Cycle 1 to Cycle 2, we saw roughly a 125 day longer cycle. From Cycle 2 to Cycle 3 we saw roughly a 153 day longer cycle. Therefore, it is logical to assume, based on the data and historical trends, that we will see an even longer Cycle 4 before we reach the top. We also see pretty clear ratios of diminishing returns for each subsequent market cycle. Meaning, that while Bitcoin continues to make new all time highs each cycle, the PERCENT of gain from bottom to top of each cycle has lessened.
In addition, in previous Bitcoin market cycles, we have also seen distinct double tops prior to the start of the bear market. In 2013 the first top occurred in April, followed by a pullback then a bounce to a higher second top in November. In 2017, the tops occurred in August and December. For 2021, you could make an argument that perhaps the first top was in March and this current pullback is historically accurate prior to the next major run up to the second top. The percentage of DROP between the first top and the bottom of the pullback for 2013 was about 40%. For 2017, it was also about 40%. Where are we now from our March 2021 all time high? ABOUT 40%. With all three of these, you could say +/- about 3% due to charting error from the precise price-point at any given moment.
So, if we assume the rate of diminishing returns will remain constant (the most logical and conservative approach in my opinion), Bitcoin could still reach a new all-time high of roughly 90K-100K before this market cycle tops. That is only about a 225% return from current prices. In previous cycles, from the bottom of the bull-back to the top of the bull market, we saw roughly 1,250% in 2013 and over 500% in 2017. Even taking into account the belief that returns will be diminishing, a 225%-250% gain from the bottom of this pull-back to the top of this bull market cycle would be right in line with what the data shows.
*NOT Financial Advise*
In addition, in previous Bitcoin market cycles, we have also seen distinct double tops prior to the start of the bear market. In 2013 the first top occurred in April, followed by a pullback then a bounce to a higher second top in November. In 2017, the tops occurred in August and December. For 2021, you could make an argument that perhaps the first top was in March and this current pullback is historically accurate prior to the next major run up to the second top. The percentage of DROP between the first top and the bottom of the pullback for 2013 was about 40%. For 2017, it was also about 40%. Where are we now from our March 2021 all time high? ABOUT 40%. With all three of these, you could say +/- about 3% due to charting error from the precise price-point at any given moment.
So, if we assume the rate of diminishing returns will remain constant (the most logical and conservative approach in my opinion), Bitcoin could still reach a new all-time high of roughly 90K-100K before this market cycle tops. That is only about a 225% return from current prices. In previous cycles, from the bottom of the bull-back to the top of the bull market, we saw roughly 1,250% in 2013 and over 500% in 2017. Even taking into account the belief that returns will be diminishing, a 225%-250% gain from the bottom of this pull-back to the top of this bull market cycle would be right in line with what the data shows.
*NOT Financial Advise*
Comment
NOT Financial ADVICE. Sorry...typo.
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