Part 2 of my humble analysis on the current cycle. In the last article, I used some data to help understand when the Alt seasons occurred in the past, and -hopefully- when to expect them.
In this new article, I'd like to show how the halving has affected prices in the past, in the hopes that it can help predict the next cycle. All this analysis is based on the past cycles, so as always, keep in mind it can show a direction but no precise data.
So, what are we looking at ? - The pale blue vertical lines are the halving dates. - Red rectangles are the bear markets - Orange rectangles are two different steps, but they show consolidations - Green rectangles are Bull markets - Grey curved line = Regression line (when price wanders too much from the average price, it will come back around it or in the opposite direction. To be discussed in the next analysis)
What more can we see ? Each cycle sees different sizes in rectangles, but the same steps repeat. I'd say parts of this representation was forced to make it fit the cycles (I copied most of what you see from a graph seen in a video). Still, it's impressive how things have repeated ! I chose to reduce the size of the last green rectangle compared to the source graph, because we see that after each cycle, it is less vertical and more horizontal. I chose to set the high at 80.000$ for this presentation, but this will be discussed in the third and last part of this Bitcoin cycles analysis.
What assumption can we make ? - If we strictly compare to the previous run, where are we ? I'd say we're at the same spot as november 2015 (or August 2012 in the previous cycle). A first spike in price showed a renewed interest, but it escalates too fast and the bubble bursts. But then the trend is set. After a consolidation period (weeks, months), a clearer bull market should start. - Bitcoin is still a safe investment (not financial advice), and it is still time to invest for the long run. You can wait for a better entry point if you know what you're doing, but this is still a fair price around 10,000$ (this was at the time of writing. Not so obvious now that price is at 12k$) - I do not trust the trend lines you can see on many very long term analyses. Not saying they're wrong, but in my opinion, it gives a false impression of preciseness. The regression line on the contrary only shows a general direction, while still being sound and mathematical. Mostly a matter of preference. - If you are more an investor than a trader, with this chart and the previous analysis you can adjust your share of BTC/Altcoins(/USD) in your portfolio, according to which stage we are in.
One thing to note, according to Willy Woo, the coming BTC cycle could be different than the last. It could be more like pre-2015 cycles : shorter, and more intense. I have no comment on this, just relaying his knowledgeable opinion. (source : twitter.com/woonomic/status/1143857190203060225). So, instead of having a larger green rectangle at the end like I chose to depict, it would instead be thinner and come earlier.
I hope this analysis helps you. It was a pleasure writing it to clear my own opinions on the subject. Part 3 will discuss bitcoin price in the future.
Usual reminder : I am not an analyst. Ideas published here are taken from other sources, then transformed or reproduced, mixed with others, and adapted to my taste. Comments & critics are welcome. I have no problem with being wrong :)
Safe trading !
___________________________________________________________________________________________________________________________ Small tip in LTC ? Thanks ! LREWurnbdJ6Mqt8xbuhL6qHGfEHHcN5u56 Will write other articles when I can.
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UPDATE : Wanted to add that a first invalidation of this scenario would be to continue the current move above the trend line we've been surfing since april (blue line in the snapshot). That would not be a complete invalidation depending on what happens next (after all, the spike could last a few days or weeks before going sideways), but it would still be unseen before in the last cycles.
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A quick update. No invalidation for now, we have indeed broken out of the uptrend, which is healthy and was predicted by this model.
We're now reaching the consolidation phase. Price can move liberally in the large orange zone, but then it should stabilize and show the way.
Daring investors can try to catch the bottom (arguably between 7,500 & 8,500), while careful investors will wait the stabilization (possibly around 13,000) and buy the breakout when we reach the green zone. Possibly in the 2nd quarter of 2020, or earlier according to Willy Woo. As for me, I will do both with 50-50 % of my fresh capital.
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Broken uptrend :
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New "Idea" about the next BTC bottom price, published 2 days ago. Not part of my series of articles about the market cycles, but still a fundamental analysis / large time frame article.
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New idea about the next major price action for BTC : Cup & Handle could be forming right now... if you know where to look :)
Previous idea (update above) happened to be exactly right about the bottom price ! I'm happy about it but it was not meant to be exact science, I was lucky to be that precise. Still, that scenario was made 3 months ago so I'm quite proud and it gives me some confidence to continue writing articles in the future ;)
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Ooopsie. Mistake, here is the link to the new idea ;)
@mmchambers06, Yes quite so.
Now, I hope the 80k final target will be reached.
About alt season, I'm not sure. We've had a small one already. I think we can get another after a bitcoin retrace, but for now I'm not confident at the current levels.
mmchambers06
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@Harry_Seldon, the dominance chart is make-or-break for alt season soon, IMO. The whole market is so much different now. Bitcoin still doing it's thing...the honey badger...
Duebina
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@mmchambers06, I came here to say exactly this in 2022...
EXCAVO
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Harry_Seldon
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@EXCAVO, Definitely worth a look, check out Excavo's article above guys.
GlenGoodman
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Excellent analysis, Harry! The only thing I'd really take issue with is your suggestion that Bitcoin is a safe investment. The hostility of major governments is still a significant threat to Bitcoin (and to its future price), so I don't think we can call it safe yet.
Harry_Seldon
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@GlenGoodman, You have a point of course ! They are worried and maybe they should be. But I think bitcoin is progress, evolution. Even if they regulate, they won't ban. The technology is already a progress, but it's a program, it can still evolve if the political environment changes. Just an example, if the energy consumption becomes a problem, bitcoin will shift to PoS or something else.
Another hope : I think soon everyone will own bitcoin, and mostly people with money (politicians included), and politicians won't ban against their own (personal) interests. They are the professional hypocrytes ! :) With all due respect for some of them course.
nico14
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Looks reasonable, I have something similar in mind. Thanks for sharing! :)