Hello everyone, today we are going to talk about the cyclical nature of Bitcoin .
Impressions:
We can't help but notice the uncanny similarities between each Bitcoin cycle.
Indeed, the halvings (mechanisms for reducing the number of Bitcoin mined) occur about every 4 years.
This is followed by a bullish rise that lasted respectively :
- 526 days for the second halving (from July 9, 2016)
- 548 days for the third halving (from May 11th 2020)
Assuming we bottomed at FTX's bankruptcy at 15500, we would have a bearish phase time that is day for day identical to the 2018 phase! 🤯🤯
Logic:
We know that markets always work in cycles, and bitcoin is no exception.
They are even more emphasized in cryptos, because unlike stock market valuations, Bitcoin is much less subject to external variables than any other asset!
Indeed, having no CEO and being decentralized (i.e. not depending on any jurisdiction), there are few traditional valuation exercises that work on cryptos.
Therefore, the main variable that governs the price of Bitcoin is human psychology.
Each new bull market cycle is formed by the excitement of new investors who have never invested before. The emotional phases that they will go through during the market phases are the same as the ones that the previous investors went through during the last cycle (on average of course, I neglect the differences in risk tolerance of everyone).
It is therefore for me not insignificant to find a very strong cyclicality on cryptos, the emotions experienced by new investors during a bear market remain the same from one cycle to another, as well as their duration.
Predictions:
If we stick to the previous analysis, we will enter an accumulation phase for the next 3 months and then go into an echo bubble. However we can agree that the macroeconomic context is not the same as in 2017. However, the FED is becoming a little more lenient and it has been 2-3 months in a row that we have an inflation index (CPI) that is decreasing which could be a narrative to justify a rise in 2023.
Feel free to like / follow and happy trading!
Impressions:
We can't help but notice the uncanny similarities between each Bitcoin cycle.
Indeed, the halvings (mechanisms for reducing the number of Bitcoin mined) occur about every 4 years.
This is followed by a bullish rise that lasted respectively :
- 526 days for the second halving (from July 9, 2016)
- 548 days for the third halving (from May 11th 2020)
Assuming we bottomed at FTX's bankruptcy at 15500, we would have a bearish phase time that is day for day identical to the 2018 phase! 🤯🤯
Logic:
We know that markets always work in cycles, and bitcoin is no exception.
They are even more emphasized in cryptos, because unlike stock market valuations, Bitcoin is much less subject to external variables than any other asset!
Indeed, having no CEO and being decentralized (i.e. not depending on any jurisdiction), there are few traditional valuation exercises that work on cryptos.
Therefore, the main variable that governs the price of Bitcoin is human psychology.
Each new bull market cycle is formed by the excitement of new investors who have never invested before. The emotional phases that they will go through during the market phases are the same as the ones that the previous investors went through during the last cycle (on average of course, I neglect the differences in risk tolerance of everyone).
It is therefore for me not insignificant to find a very strong cyclicality on cryptos, the emotions experienced by new investors during a bear market remain the same from one cycle to another, as well as their duration.
Predictions:
If we stick to the previous analysis, we will enter an accumulation phase for the next 3 months and then go into an echo bubble. However we can agree that the macroeconomic context is not the same as in 2017. However, the FED is becoming a little more lenient and it has been 2-3 months in a row that we have an inflation index (CPI) that is decreasing which could be a narrative to justify a rise in 2023.
Feel free to like / follow and happy trading!