1) The orange vertical lines are 1 year before the bitcoin halving. The next 1 year out from halving is May 2019. The bitcoin market usually starts a bull market 1 year out from the halving.
2) The green vertical lines are the bitcoin halving dates. The next halving date is May 2020. The previous halving dates were Nov 2012 and July 2016.
3) The blue vertical lines are a time projection of when we should return to all time new highs based on the last bitcoin halving cycle.
4) The red vertical line is a time projection of the next new high based on the 2020 halving cycle. The high of 2020 cycle should come on Jan 2022.
5) The red horizontal line is a price prediction of the next new high of the 2020 halving cycle. The bitcoin price high prediction on Jan 2022 is $404,626
6) The yellow trace the projected price movement produced by the halving cycle.
7) The purple box lines trace the bitcoin bear market cycle from the high to the low and back to the old high.
1) The bitcoin halving cycle doubles the cost of production: the same energy and computational power produces only half the number of bitcoins . Read "A Cost of Production Model for Bitcoin" by Adam Hayes for a primer on the importance of the halving cycle for understanding the value of bitcoin .
2) The bitcoin price drop in the first bitcoin cycle was 86%. If we have a similar decline this halving cycle, then bitcoin can drop to $2606.62 before May 2019 and the next 2020 halving cycle.
3) I believe that the bull run starts one year before the halving because miners stop deploying new computational capital/power in anticipation of the doubling of future production costs.
4) Bitcoin price accelerates up into the halving, and one year after, as market participants engage in price discovery under a new cost of production regime. The market over shoots and we crash in the 3rd year of the cycle. Specifically, we run in 2011,2012, 2013 and crash in 2014. Similarly, we run in 2015, 2016, 2017, and crash in 2018. Therefore I propose that we run in 2019, 2020, 2021, and crash in 2022. This analysis may also partially explain the crash of 2010.
5) Finally, these halving dates reflect perfect symbolic singularities. Symbolic singularities are discursive/argumentation phenomena where market participants have foreknowledge of market moving events e.g., presidential elections, Olympic events, reports, etc.. Certain classes of symbolic singularities have a bias, such as when limited cognitive/market attention is distributed over under attended assets e.g.,
a) the U.S. government's claim that it would map the human genome before 2000 led to the genomic/biotech bubble of the late 1990s.
b) the Chinese Olympics of 2008 as a showcase of China's arrival on the global economic stage and the ensuing 2006/2007 Chinese bubble.
I will discuss my research into rhetorical finance further in future posts.