Parallel Channels - Reversal of diminishing returns in Bitcoin
I normally don't publish, but just thought i'd share this idea from a few months ago (to two years ago), and updated this analysis based on recent price data. So it goes like this, using parallel channels and the median levels of each channel. Each successive parallel channel highlights the diminishing returns each cycle. However, this cycle might indicate a reversal of the trend, as it broke above the median of the current channel, and above the 61.8 golden pocket. We didn't get rejected this time around.
The parallel channels theory goes like this...the median of the previous channel, becomes the resistance at which we top out in the current cycle. The median of the yellow channel intersects with the top of the pink channel, forming the 20K top. The green channel gets formed from the 20K top, to the 3K low. Again, we hit the 65K top at the median of the previous channel, which is the pink channel, and that intersects with the top of the resistance in the green channel. If we follow the trend, on the newly created white channel. That means we only get to just over 100K to 120K by Feb or March next year (2025). These targets are highlighted by the red crosses. Unless we already top out at 80K (5.3 Theory), which could be the case. But the fundamentals and ETF inflows are too powerful currently.
The interim or local tops usually occur at the median of the current channel. We did this in 2019 at 14K. We were supposed to reverse at 42 -48K (Golden Pocket Rejection). But we didn't. So we are heading to the top of the channel (white) resistance at 80 to 90K. At these levels, it is possible for the PI Cycle to cross, giving us an onchain indication of a local top. We form an inverse H&S (or cup & handle, take your pick), with a second top, above the break of the white channel. Once or if we get weekly and monthly closes above the white channel, then we may have officially reversed the trend of diminishing returns. And calls for a median (green) top or the top of the green channel, would be the next target.
So, the second top could come in at 110 -120K either in March 2025, or extend out into 2026. This is a bearish scenario. The bullish scenario is a break out of the white channel on the second attempt creating the H&S (Or cup & handle), with a short stop down to 48K (Golden Pocket Support), around or during the halving. And then a break above both the median of the previous (green channel) and the top of the white channel, could send us potentially to 350 - 400K Bitcoin! By May/June 2025. It sounds insane, but based on this data, a reversal of the (Parallel Channels) trend, reversal of diminishing returns, coupled with High ETF inflows, may just send us to the proverbial moon! Buckle up! We are either in for a major bull run, if we break out of the white channel, or we go sideways (flat) for many years if we stay in the white channel.
I have also added a further blue channel projection for the next bear market, which would indicate a bottom in 2026, around the white channel support (Inverse H&S support as well), at around 120K. So 120K seems like an important number going forward. I see many analysts calling for this conservatively as well (Bitcoin cycle master).
if we do end up testing the top side of the white channel at around 78-90K that may correlate with the 1.236 algo target, overshooting it. Also a wick above the median line of the green channel, and a close below would indicate median resistance of the green channel. If we do end up going to 78-90K it might be short lived, and correct down to 48K, with a potential wick down to 30K. Corrections usually come close down to the channel support, not enough data. But a break above the 61.8, would indicate at least a retest of the 61.8 at 48K
The parallel channels theory goes like this...the median of the previous channel, becomes the resistance at which we top out in the current cycle. The median of the yellow channel intersects with the top of the pink channel, forming the 20K top. The green channel gets formed from the 20K top, to the 3K low. Again, we hit the 65K top at the median of the previous channel, which is the pink channel, and that intersects with the top of the resistance in the green channel. If we follow the trend, on the newly created white channel. That means we only get to just over 100K to 120K by Feb or March next year (2025). These targets are highlighted by the red crosses. Unless we already top out at 80K (5.3 Theory), which could be the case. But the fundamentals and ETF inflows are too powerful currently.
The interim or local tops usually occur at the median of the current channel. We did this in 2019 at 14K. We were supposed to reverse at 42 -48K (Golden Pocket Rejection). But we didn't. So we are heading to the top of the channel (white) resistance at 80 to 90K. At these levels, it is possible for the PI Cycle to cross, giving us an onchain indication of a local top. We form an inverse H&S (or cup & handle, take your pick), with a second top, above the break of the white channel. Once or if we get weekly and monthly closes above the white channel, then we may have officially reversed the trend of diminishing returns. And calls for a median (green) top or the top of the green channel, would be the next target.
So, the second top could come in at 110 -120K either in March 2025, or extend out into 2026. This is a bearish scenario. The bullish scenario is a break out of the white channel on the second attempt creating the H&S (Or cup & handle), with a short stop down to 48K (Golden Pocket Support), around or during the halving. And then a break above both the median of the previous (green channel) and the top of the white channel, could send us potentially to 350 - 400K Bitcoin! By May/June 2025. It sounds insane, but based on this data, a reversal of the (Parallel Channels) trend, reversal of diminishing returns, coupled with High ETF inflows, may just send us to the proverbial moon! Buckle up! We are either in for a major bull run, if we break out of the white channel, or we go sideways (flat) for many years if we stay in the white channel.
I have also added a further blue channel projection for the next bear market, which would indicate a bottom in 2026, around the white channel support (Inverse H&S support as well), at around 120K. So 120K seems like an important number going forward. I see many analysts calling for this conservatively as well (Bitcoin cycle master).
if we do end up testing the top side of the white channel at around 78-90K that may correlate with the 1.236 algo target, overshooting it. Also a wick above the median line of the green channel, and a close below would indicate median resistance of the green channel. If we do end up going to 78-90K it might be short lived, and correct down to 48K, with a potential wick down to 30K. Corrections usually come close down to the channel support, not enough data. But a break above the 61.8, would indicate at least a retest of the 61.8 at 48K