Bitcoin Price and the Altcoin Rally: Part II
Bitcoin Price and the Altcoin Rally: Part II
Interpretation:
1) The first green vertical line represents Bitcoin rising above the highest price (i.e., $1,163) reached between the 2012 and 2016 Bitcoin halving (see ref 1 for discussion of the Bitcoin Halving Cycles Runs). The second green vertical line represents Bitcoin rising above the highest price (i.e., $19,666) reached between the 2016 and 2020 Bitcoin halving.
2) The yellow vertical line represents Ether rising above above the highest price (i.e., $19.21) reached between the 2012 and 2016 Bitcoin halving.
3) The first red vertical line represents the peak price for Bitcoin for the 2016 Bitcoin Halving Cycle. The second red vertical line represents the peak price for Bitcoin for the 2016 Bitcoin Halving Cycle.
4) The X-axis represents time.
5) The Y - A axis represents the percent of bitcoin dominance for all crypto coins. Therefore, as the percent of bitcoin dominance drops, the prices of Altcoins are rising relative to the price of Bitcoin . The Y - Z axis represents Bitcoin's price. The Y - B axis represents Ether's price.
Important Points:
1) The Altcoin Rally began when Bitcoin and Ether reached and surpassed the old highs (i.e., $1,163 and $19.21 respectively) from the previous 2012 Bitcoin Halving Cycle. Induction suggests that we can expect a similar beginning of a new Altcoin Rally once Bitcoin and Ether surpass the old highs (i.e., $19,666 and $1419.96 respectively) of the last 2016 Bitcoin Halving Cycle.
2) The timing of the last Altcoin Rally suggests that a new Altcoin Rally may last a little longer after Bitcoin hits its peak, but fall soon after Ether has reached its peak price for the 2020 Bitcoin Halving Cycle. Induction also suggests that smart speculators should begin exiting alt coin positions aggressively at these tops. See the red vertical lines and the Altcoin Rally end.
3) Previous cycles and rallies suggest that Bitcoin will outperform Altcoins when the next crypto winter begins. Smart speculators should attempt to sell Altcoins early and remain in Bitcoin or cash until the next Bitcoin Halving Cycle begins in 2024, and in particular, a new high in Bitcoin and Ether are reached for the 2024 Bitcoin Halving Cycle.
4) I initially believed that the Altcoin Rally would begin when Bitcoin reached a new hew from the previous halving cycle, however, closer analysis shows that both Bitcoin and then soon after Ether reached new highs before the Altcoin rally began last cycle(i.e., 2016 Bitcoin Halving Cycle). This suggests that the 2020 Bitcoin Halving Cycle's Altcoin Rally may not begin until Ether rises above $1419.96. My previous rhetorical analysis requires only slight modification to make sense of these new insights.
Further Altcoin Rally Analysis:
1) The important questions are “Why did the Altcoin Rally begin when it did?”, and “Why was this rally so pronounced, intense, and abrupt?”.
I attempt to answer these questions using a rhetorical analysis of the potential cognitive states of market participants. A rhetorical analysis is an empirical examination of the plausible and probable arguments available to actors in a given context to justify and or criticize actions and or judgments about reality. For example, prior to a new all time high in Bitcoin , it is relatively easier for bears to argue that the current rally is a “dead cat bounce” or just a lull in the current bear market. However, as prices approach the all time high this argument becomes harder and harder to make both internally (i.e., justifications and/or rationalizations we provide ourselves) and externally (i.e., linguistic statements we share with others). Similarly, bullish arguments become easier to develop and deploy as prices rise and approach the all time high. In short, as price rises, we see a decrease in the production and persuasiveness (i.e., perceived rationality) of bearish arguments and an increase in the production and perceived rationality of bullish arguments. These changes become more pronounced and intense as we approach new all time highs. In addition these arguments should hold for both Bitcoin and Ether. Bitcoin is needed to justify the crypto space in general. However, the Ether high is needed to justify the movement from Bitcoin into Alts.
Moreover, I theorize that something very different happens once we break or get very close to the all time high. Specifically, I think a symbolic “big bang” or rhetorical critical mass moment is reached where the rhetorical dynamics governing bullish rationality reach a criticality. The cognitive or persuasive potential of bullish rhetorical arguments expand violently and exponentially, while the rationality and plausibility of bearish arguments collapse suddenly and dramatically. Once the old high is breached, it becomes untenable to make the bearish argument that we are still in a bear market. Market participants making such arguments appear both irrational to others as well as themselves. The rhetorical resources available to and marshalled for the bear case diminishes irrevocably and quickly. In contrast, bulls no longer need to expend rhetorical resources making the counter argument that the bear market is over. These freed rhetorical resources do not flow slowly and incrementally into the cognitive consciousness of market participants, but flood into the rhetorical imagination creating an argumentative echo chamber that extends and expands the cognitive horizon of what is possible and plausible. The threshold of what is reasonable falls precipitously, and in this new attention landscape, altcoins and their myriad business models and diverse future worlds appear rational and persuasive. The symbolic “big bang” shifts the cognitive arena from a presumption of “crypto currencies will not survive to” to the presumption of “crypto currencies will thrive and disrupt/transform the world”. Bitcoin hitting a new high combined with Ether hitting a new high focuses and increases argument that "crypto is a great investment and altcoins (e.g., Ether) are the next great opportunity in this space. Finally, once Bitcoin tops and Ether tops, the bullish arguments start to falter in response to bearish arguments of "overvaluation" and "excess" for both the crypto space (BTC) and altcoins (ETH) in particular.
I will discuss these ideas further as I think more about the concept of a rhetorical “big bangs” and the creation of argumentative contexts that allow for bubbles and bull runs in general. I will also do some work and thinking about the rhetorical dynamics of the "flippening" (i.e., the possibility that Ethereum or some other alt would over take Bitcoin in market cap.) and its effect on the Altcoin Rally. If you are interested in this type or similar types of rhetorical analyses, please see my previous work on the Bitcoin Halving Analysis.
References
1 Bitcoin Halving Reward and Price History Analysis: Part III
Interpretation:
1) The first green vertical line represents Bitcoin rising above the highest price (i.e., $1,163) reached between the 2012 and 2016 Bitcoin halving (see ref 1 for discussion of the Bitcoin Halving Cycles Runs). The second green vertical line represents Bitcoin rising above the highest price (i.e., $19,666) reached between the 2016 and 2020 Bitcoin halving.
2) The yellow vertical line represents Ether rising above above the highest price (i.e., $19.21) reached between the 2012 and 2016 Bitcoin halving.
3) The first red vertical line represents the peak price for Bitcoin for the 2016 Bitcoin Halving Cycle. The second red vertical line represents the peak price for Bitcoin for the 2016 Bitcoin Halving Cycle.
4) The X-axis represents time.
5) The Y - A axis represents the percent of bitcoin dominance for all crypto coins. Therefore, as the percent of bitcoin dominance drops, the prices of Altcoins are rising relative to the price of Bitcoin . The Y - Z axis represents Bitcoin's price. The Y - B axis represents Ether's price.
Important Points:
1) The Altcoin Rally began when Bitcoin and Ether reached and surpassed the old highs (i.e., $1,163 and $19.21 respectively) from the previous 2012 Bitcoin Halving Cycle. Induction suggests that we can expect a similar beginning of a new Altcoin Rally once Bitcoin and Ether surpass the old highs (i.e., $19,666 and $1419.96 respectively) of the last 2016 Bitcoin Halving Cycle.
2) The timing of the last Altcoin Rally suggests that a new Altcoin Rally may last a little longer after Bitcoin hits its peak, but fall soon after Ether has reached its peak price for the 2020 Bitcoin Halving Cycle. Induction also suggests that smart speculators should begin exiting alt coin positions aggressively at these tops. See the red vertical lines and the Altcoin Rally end.
3) Previous cycles and rallies suggest that Bitcoin will outperform Altcoins when the next crypto winter begins. Smart speculators should attempt to sell Altcoins early and remain in Bitcoin or cash until the next Bitcoin Halving Cycle begins in 2024, and in particular, a new high in Bitcoin and Ether are reached for the 2024 Bitcoin Halving Cycle.
4) I initially believed that the Altcoin Rally would begin when Bitcoin reached a new hew from the previous halving cycle, however, closer analysis shows that both Bitcoin and then soon after Ether reached new highs before the Altcoin rally began last cycle(i.e., 2016 Bitcoin Halving Cycle). This suggests that the 2020 Bitcoin Halving Cycle's Altcoin Rally may not begin until Ether rises above $1419.96. My previous rhetorical analysis requires only slight modification to make sense of these new insights.
Further Altcoin Rally Analysis:
1) The important questions are “Why did the Altcoin Rally begin when it did?”, and “Why was this rally so pronounced, intense, and abrupt?”.
I attempt to answer these questions using a rhetorical analysis of the potential cognitive states of market participants. A rhetorical analysis is an empirical examination of the plausible and probable arguments available to actors in a given context to justify and or criticize actions and or judgments about reality. For example, prior to a new all time high in Bitcoin , it is relatively easier for bears to argue that the current rally is a “dead cat bounce” or just a lull in the current bear market. However, as prices approach the all time high this argument becomes harder and harder to make both internally (i.e., justifications and/or rationalizations we provide ourselves) and externally (i.e., linguistic statements we share with others). Similarly, bullish arguments become easier to develop and deploy as prices rise and approach the all time high. In short, as price rises, we see a decrease in the production and persuasiveness (i.e., perceived rationality) of bearish arguments and an increase in the production and perceived rationality of bullish arguments. These changes become more pronounced and intense as we approach new all time highs. In addition these arguments should hold for both Bitcoin and Ether. Bitcoin is needed to justify the crypto space in general. However, the Ether high is needed to justify the movement from Bitcoin into Alts.
Moreover, I theorize that something very different happens once we break or get very close to the all time high. Specifically, I think a symbolic “big bang” or rhetorical critical mass moment is reached where the rhetorical dynamics governing bullish rationality reach a criticality. The cognitive or persuasive potential of bullish rhetorical arguments expand violently and exponentially, while the rationality and plausibility of bearish arguments collapse suddenly and dramatically. Once the old high is breached, it becomes untenable to make the bearish argument that we are still in a bear market. Market participants making such arguments appear both irrational to others as well as themselves. The rhetorical resources available to and marshalled for the bear case diminishes irrevocably and quickly. In contrast, bulls no longer need to expend rhetorical resources making the counter argument that the bear market is over. These freed rhetorical resources do not flow slowly and incrementally into the cognitive consciousness of market participants, but flood into the rhetorical imagination creating an argumentative echo chamber that extends and expands the cognitive horizon of what is possible and plausible. The threshold of what is reasonable falls precipitously, and in this new attention landscape, altcoins and their myriad business models and diverse future worlds appear rational and persuasive. The symbolic “big bang” shifts the cognitive arena from a presumption of “crypto currencies will not survive to” to the presumption of “crypto currencies will thrive and disrupt/transform the world”. Bitcoin hitting a new high combined with Ether hitting a new high focuses and increases argument that "crypto is a great investment and altcoins (e.g., Ether) are the next great opportunity in this space. Finally, once Bitcoin tops and Ether tops, the bullish arguments start to falter in response to bearish arguments of "overvaluation" and "excess" for both the crypto space (BTC) and altcoins (ETH) in particular.
I will discuss these ideas further as I think more about the concept of a rhetorical “big bangs” and the creation of argumentative contexts that allow for bubbles and bull runs in general. I will also do some work and thinking about the rhetorical dynamics of the "flippening" (i.e., the possibility that Ethereum or some other alt would over take Bitcoin in market cap.) and its effect on the Altcoin Rally. If you are interested in this type or similar types of rhetorical analyses, please see my previous work on the Bitcoin Halving Analysis.
References
1 Bitcoin Halving Reward and Price History Analysis: Part III