Bitcoin Is In a Consolidation, Not In a Long Bear Market
*** This is a repost form last week cause this idea was deleted by trading view ''for violating one or more of our House Rules''. I had no right to promote my Twitter account according to them... ***
So let's get started on why I don't think bitcoin is in a long 3 years bear market, but in a much shorter one, who's called a consolidation that could last somewhere around 6 months :
1. I don't see a bear market coming for bitcoin as $BTC is now since 2018 strongly correlated to the stock market. In other words, bitcoin is a much bigger asset now and with the institutional money going in, bitcoin will probably start to follow the same cycle as the economic and stock market cycles. With that being said, with the growing and strong economy that we have right now, I think the stock bull market could continue for years before a economic recession would bring a end to it. It's all about cycles, and since the average bull market for stocks and the average length of economic expansion cycles are 4 to 5 years, I don't expect it to end before at least 2 to 3 years. The last economic expansion/stock bull market started in April 2020 just after the Covid-19 crash. If you go read about economics forecast from the FED, US government or other economic international institutions like the IMF or the OECD, they all think we are in the beginning of the expansion phase of the economic cycle . Therefore, with bitcoin being strongly correlated with the stock market for 3 years now, I expect that correlation to continue.
2. The diminishing returns theory. If you take a look at each cycle of bitcoin since it's creation, you can see each bull market cycle are longer than it's predecessors and with diminishing returns. However, before the last crash, bitcoin was ahead of schedule compared to it's last ROI cycle (no diminishing returns). But now that bitcoin offers diminishing returns compared to it's last cycle, this cycle is still shorter in term of time, which make me think this bull market cycle isn't over yet.
3. Why this isn't just a casual V shape correction/recovery. 3 things ; first the drop was over 50%. We all know the corrections during a bull market are never over 40%. So this is structure broke #1. Second and third, are 2 really important moving averages ; the 200 daily and the 21 weekly. Both MA have been broken. So this is bull market structure broke # 2 and # 3.
To recapitulate, that's why to me this is not the casual bitcoin correction, some bull market structure have been broke and a long consolidation is probably here to stay for months. However I do think this cycle isn't over yet. I expect this bull cycle to be longer than the last one, which is not the case yet. I also expect the bitcoin /stock market correlation to continue, and since I don't think anytime soon a recession will come, I don't expect a bitcoin nor a stock market bear market.
Stay tuned for more updates,
Fred
So let's get started on why I don't think bitcoin is in a long 3 years bear market, but in a much shorter one, who's called a consolidation that could last somewhere around 6 months :
1. I don't see a bear market coming for bitcoin as $BTC is now since 2018 strongly correlated to the stock market. In other words, bitcoin is a much bigger asset now and with the institutional money going in, bitcoin will probably start to follow the same cycle as the economic and stock market cycles. With that being said, with the growing and strong economy that we have right now, I think the stock bull market could continue for years before a economic recession would bring a end to it. It's all about cycles, and since the average bull market for stocks and the average length of economic expansion cycles are 4 to 5 years, I don't expect it to end before at least 2 to 3 years. The last economic expansion/stock bull market started in April 2020 just after the Covid-19 crash. If you go read about economics forecast from the FED, US government or other economic international institutions like the IMF or the OECD, they all think we are in the beginning of the expansion phase of the economic cycle . Therefore, with bitcoin being strongly correlated with the stock market for 3 years now, I expect that correlation to continue.
2. The diminishing returns theory. If you take a look at each cycle of bitcoin since it's creation, you can see each bull market cycle are longer than it's predecessors and with diminishing returns. However, before the last crash, bitcoin was ahead of schedule compared to it's last ROI cycle (no diminishing returns). But now that bitcoin offers diminishing returns compared to it's last cycle, this cycle is still shorter in term of time, which make me think this bull market cycle isn't over yet.
3. Why this isn't just a casual V shape correction/recovery. 3 things ; first the drop was over 50%. We all know the corrections during a bull market are never over 40%. So this is structure broke #1. Second and third, are 2 really important moving averages ; the 200 daily and the 21 weekly. Both MA have been broken. So this is bull market structure broke # 2 and # 3.
To recapitulate, that's why to me this is not the casual bitcoin correction, some bull market structure have been broke and a long consolidation is probably here to stay for months. However I do think this cycle isn't over yet. I expect this bull cycle to be longer than the last one, which is not the case yet. I also expect the bitcoin /stock market correlation to continue, and since I don't think anytime soon a recession will come, I don't expect a bitcoin nor a stock market bear market.
Stay tuned for more updates,
Fred
Comment:
This consolidation isn't over yet, we're not out of the wood for now but this rally's looking pretty good! Bitcoin needs to hold the 21 weekly MA. if it can hold, we'll see new ath by the end of the year.
