Hello Friends
Where is Bitcoin BTCUSD headed and what is the path that it is going to take? The million dollar question. Truth is nobody can be sure and all we can do is make a realistic prediction on the information we have from the past. There are not many data points to go off but in my eyes it is the only logical and realistic approach. Here my analysis of the BLX log chart:
Chart info
- Black vertical lines represent Bitcoin mining reward halving cycles.
- Each halving cycle is divided into four equal quarters I, II, III and IV divided with a dashed vertical line.
Assumptions
- Bitcoin stays within these log curves
- Bitcoin cycles move according to the mining accumulation and distribution cycle. After halving the rewards diminish and it is less profitable to sell here so they accumulate, bitcoin goes into its bullmarket, somewhere before the next halving miners capitulate in order to liquidate their mined Bitcoin to pay for costs of mining (See: stats.buybitcoinworl.../miner-capitulation/)
- Every cycle the returns from bottom of the previous bearmarket till the top of the bullmarket are diminished with the same percentual change. Besides diminished returns the volatility decreases over time and therefor it takes longer to reach the top.
- Every cycle has 3 phases right after reward halving: 1. bullmarket, 2. bearmarket, 3. Consolidation period.
Observations
- The market cycle top is in phase II of the cycle, in the 2012 cycle the top is at the beginning of phase II, in the 2016 cycle it is halfway of phase II, so in line with expectations we can say the top of the 2020 cycle will be in the second half of phase II (red box).
- Right in between halvings we are in the middle of the bearmarket (orange box).
- Accumulation or bottom of the bearmarket is in the second half of phase III untill the end of phase 4 when the next halving takes place (green box).
- On the top of the chart you can see the percentual change of the returns from bearmarket bottom to bullmarket top. These return are diminishing exponentially, so we look at the percentual change of the percentual change. In the 2012 cycle the returns are 82% less as the cycle before, in the 2016 cycle the returns are 79% as the cycle before, so to calculate the returns of the coming cycles we take the average of these two and assume the returns diminish every cycle with 80%. This is a positive scenario because if we would follow the decline of market cycle returns it would be 76% in the 2020 cycle and 73% in the 2024 cycle.
Expectations and predictions based on this analysis
- The bitcoin market cycle top of the 2020 cycle will be between 68.000 and 110.000 in the period between November 2021 and March 2022 (red box). If we calculate with a diminished return of 80% in relation to the previous cycle returns we have a top of approximately 76.000 USD.
- Right in between halvings we will be in a bearmarket, this will be April 2022 (orange box).
- The 2020 market cycle will see its bottom and accumulation period between 15.000 and 45.000 dollar in the period between October 2022 and March 2024 (green box)
- Based on these same rules the top of the 2024 market cycle will be 150.000 USD (+480%) around the end of phase II or the beginning of phase 3 (red box)
Conclusion
As usual this is not financial advise, do your own research and make your own decisions, trade safe and responsibly. Based on this analysis it would be wise to start scaling out of Bitcoin or opening short positions in the next few months. Start scaling back in, closing shorts and opening longs from around November 2022 until the next halving in approximately March of 2024.
Please reply or contact me for feedback or further discussion.
Have fun :)
Where is Bitcoin BTCUSD headed and what is the path that it is going to take? The million dollar question. Truth is nobody can be sure and all we can do is make a realistic prediction on the information we have from the past. There are not many data points to go off but in my eyes it is the only logical and realistic approach. Here my analysis of the BLX log chart:
Chart info
- Black vertical lines represent Bitcoin mining reward halving cycles.
- Each halving cycle is divided into four equal quarters I, II, III and IV divided with a dashed vertical line.
Assumptions
- Bitcoin stays within these log curves
- Bitcoin cycles move according to the mining accumulation and distribution cycle. After halving the rewards diminish and it is less profitable to sell here so they accumulate, bitcoin goes into its bullmarket, somewhere before the next halving miners capitulate in order to liquidate their mined Bitcoin to pay for costs of mining (See: stats.buybitcoinworl.../miner-capitulation/)
- Every cycle the returns from bottom of the previous bearmarket till the top of the bullmarket are diminished with the same percentual change. Besides diminished returns the volatility decreases over time and therefor it takes longer to reach the top.
- Every cycle has 3 phases right after reward halving: 1. bullmarket, 2. bearmarket, 3. Consolidation period.
Observations
- The market cycle top is in phase II of the cycle, in the 2012 cycle the top is at the beginning of phase II, in the 2016 cycle it is halfway of phase II, so in line with expectations we can say the top of the 2020 cycle will be in the second half of phase II (red box).
- Right in between halvings we are in the middle of the bearmarket (orange box).
- Accumulation or bottom of the bearmarket is in the second half of phase III untill the end of phase 4 when the next halving takes place (green box).
- On the top of the chart you can see the percentual change of the returns from bearmarket bottom to bullmarket top. These return are diminishing exponentially, so we look at the percentual change of the percentual change. In the 2012 cycle the returns are 82% less as the cycle before, in the 2016 cycle the returns are 79% as the cycle before, so to calculate the returns of the coming cycles we take the average of these two and assume the returns diminish every cycle with 80%. This is a positive scenario because if we would follow the decline of market cycle returns it would be 76% in the 2020 cycle and 73% in the 2024 cycle.
Expectations and predictions based on this analysis
- The bitcoin market cycle top of the 2020 cycle will be between 68.000 and 110.000 in the period between November 2021 and March 2022 (red box). If we calculate with a diminished return of 80% in relation to the previous cycle returns we have a top of approximately 76.000 USD.
- Right in between halvings we will be in a bearmarket, this will be April 2022 (orange box).
- The 2020 market cycle will see its bottom and accumulation period between 15.000 and 45.000 dollar in the period between October 2022 and March 2024 (green box)
- Based on these same rules the top of the 2024 market cycle will be 150.000 USD (+480%) around the end of phase II or the beginning of phase 3 (red box)
Conclusion
As usual this is not financial advise, do your own research and make your own decisions, trade safe and responsibly. Based on this analysis it would be wise to start scaling out of Bitcoin or opening short positions in the next few months. Start scaling back in, closing shorts and opening longs from around November 2022 until the next halving in approximately March of 2024.
Please reply or contact me for feedback or further discussion.
Have fun :)
