Mapping The Crypto Market Cycle - Part 8
Good day everyone. I am continuing to make an effort to "map" the cryptocurrency market cycle through phases, represented by boxes on the above chart. These phases are determined by the interplay between Bitcoin and the rest of the crypto market during the previous cycle. In my last update, I suggested that perhaps, we were about to enter Phase 3. However, it took much longer for Bitcoin to finally make a new weekly high. Right now, Bitcoin has confirmed this new weekly high (since 2019), and appears to be on its way to a new peak. This means Bitcoin could finally be in Phase 3. In the previous bull market, Bitcoin did NOT test the previous all-time-high in Phase 3. If things are to repeat, Bitcoin will top out somewhere between here and $17k, perhaps. Then, alts would catch up and some may even venture close to all-time-high faster than many expect. Here is my previous Market Cycle update:
In this analysis, I have changed a few things:
1) My projection is drawn in light blue, so that comparison becomes easier moving forward.
2) I reduced my projection for the altcoin market. 30-40 Trillion seems unreasonable.
3) I extended the current cycle slightly, due to how long the market spent in Phase 2.
As mentioned above, I believe we could finally be in Phase 3. It may not last long. It could just be a matter of weeks before Bitcoin tops out and consolidates for a while. Or, this cycle could deviate more from the last cycle - and in this case, Bitcoin could test all-time-high during this impulse. And there's always the possibility of market collapse. No one knows! But this projection is based on past behavior, and I'm curious to see if it happens again in similar fashion.
Previous cycle, showing Phase 3 in the broader context:
Bitcoin dominance would not truly break down until Bitcoin TESTS the previous all-time-high for the first time (Phase 5). Alts would need to make a substantial jump somewhat soon, and this would mark the beginning of Phase 4. Here is a new projection for Dominance. generally, I would like to see that red downtrend held on the monthly timeframe.
What happened last cycle with Dominance:
Here is also an interesting comparison. Note the similarities between Ethereum's first cycle and Bitcoin's first cycle:
This study is not to dictate where price will go. Of course, I have had to make some adjustments over time. This study is to see if there is any merit in how I'm seeing the interplay between Bitcoin and altcoins. I believe it to be important for the future of this new market. For example, there is always reasoning behind what happens, price wise. For example, it makes sense altcoins wouldn't rise so much until Bitcoin reaches the previous all-time-high. That would be the moment where media focuses a huge amount of attention on Bitcoin, and inevitably retail traders/investors would be driven towards alternative cryptocurrencies, particularly those with lower fees and faster speeds. Without that sort of media attention, it's hard for the rest of the market to grow at the moment. BUT THIS MAY CHANGE, as cryptocurrencies become more tied in with the global economic narrative.
This is not financial advice, but purely for educational and speculative purposes.
-Victor Cobra
In this analysis, I have changed a few things:
1) My projection is drawn in light blue, so that comparison becomes easier moving forward.
2) I reduced my projection for the altcoin market. 30-40 Trillion seems unreasonable.
3) I extended the current cycle slightly, due to how long the market spent in Phase 2.
As mentioned above, I believe we could finally be in Phase 3. It may not last long. It could just be a matter of weeks before Bitcoin tops out and consolidates for a while. Or, this cycle could deviate more from the last cycle - and in this case, Bitcoin could test all-time-high during this impulse. And there's always the possibility of market collapse. No one knows! But this projection is based on past behavior, and I'm curious to see if it happens again in similar fashion.
Previous cycle, showing Phase 3 in the broader context:
Bitcoin dominance would not truly break down until Bitcoin TESTS the previous all-time-high for the first time (Phase 5). Alts would need to make a substantial jump somewhat soon, and this would mark the beginning of Phase 4. Here is a new projection for Dominance. generally, I would like to see that red downtrend held on the monthly timeframe.
Here is also an interesting comparison. Note the similarities between Ethereum's first cycle and Bitcoin's first cycle:
This study is not to dictate where price will go. Of course, I have had to make some adjustments over time. This study is to see if there is any merit in how I'm seeing the interplay between Bitcoin and altcoins. I believe it to be important for the future of this new market. For example, there is always reasoning behind what happens, price wise. For example, it makes sense altcoins wouldn't rise so much until Bitcoin reaches the previous all-time-high. That would be the moment where media focuses a huge amount of attention on Bitcoin, and inevitably retail traders/investors would be driven towards alternative cryptocurrencies, particularly those with lower fees and faster speeds. Without that sort of media attention, it's hard for the rest of the market to grow at the moment. BUT THIS MAY CHANGE, as cryptocurrencies become more tied in with the global economic narrative.
This is not financial advice, but purely for educational and speculative purposes.
-Victor Cobra
Comment:
It's starting to look more like we are further along in the market cycle. Unless Bitcoin tops out very soon, I can see an ATH test already on the horizon. In this case, I will revise my projection and make a new post :)
Comment:
I'm still going to wait until the market makes its next big move to reassess my market cycle phases. Right now, things are a bit uncertain, as prices seem to be ranging.
Comment:
It looks like my market cycle phase theory has been invalidated, at least for Bitcoin. Bitcoin appears to be further along in the cycle - all time high did not really provide as much resistance as last time. Most likely because institutions are taking it seriously now.
Interestingly, altcoins are underperforming moreso than they did last time Bitcoin broke all time high. Yes, most have begun bullish trends as well, but they are moving much more slowly. Instead, ETH cotninues to perform similarly to Bitcoin at the beginning of the last bull market. So Ethereum might actually be in the correct phase. This implies that alts will probably still do very well, but that it will occur a bit later on in Bitcoin's cycle.
Interestingly, altcoins are underperforming moreso than they did last time Bitcoin broke all time high. Yes, most have begun bullish trends as well, but they are moving much more slowly. Instead, ETH cotninues to perform similarly to Bitcoin at the beginning of the last bull market. So Ethereum might actually be in the correct phase. This implies that alts will probably still do very well, but that it will occur a bit later on in Bitcoin's cycle.
