UNDERSTANDING BITCOIN'S UNIQUE PRICE CYCLICALITY
Since inception, nearly 15 years ago, Bitcoin's full price-cycle (peak to trough and back) has been patently agnostic to rate policy changes, liquidity events, inflation expectations, and all other macroeconomic news.
This never-before-seen degree of cyclicality versus the surrounding macroeconomic environment is positively mind-boggling, not just for the NYFED, but for every one of us who has researched financial & economic history, professionally.
BITCOIN'S ASYNCHRONOUS VALUATION MECHANISM
However, when methodically inspecting Bitcoin's price-asynchronicity versus the deeply distorted and ultimately arbitrary pricing system, imposed by central planners to their benefit, its genesis becomes evident:
Bitcoin has established an independent, if contemporary currency-valuation system, whose supply-demand dynamics are predominantly the opposite of our current monetary system's fictitious and constantly expanding Money Layers. In essence:
"Levering upon its 100% demand-inelastic production vs its Layer I monetary role -as a final-settlement asset, Bitcoin's utility function is wholly independent of systemic financial variables- allowed Satoshi to game our instinct to preserve intrinsic value (rooted in scarcity vs hoarding behavior traits) in order to tightly pin its price to a ~1000-Day Up Leg vs a ~400-Day Down Leg, regardless of the fiat macro subset."
CHRONOLOGICAL CONSISTENCY IN BITCOIN’S PRICE TRAJECTORY
Thus why, when you split Bitcoin's 15-year price chart into 4 lines each for the halvings (blue) & their midpoints (grey), you find that each peak to trough cycle has pivoted up or down over the same time interval between each color pair.
To visualize these dynamics, I drew blue verticals for each halving date and grey ones for each midpoint date. As the chart shows, Up Legs start about two years before halvings and end about one year after them, lasting about 1000 days. That is when Down Legs start: a few months before midpoints and they end a few months after them, lasting about 400 days, which drove me to conclude that by:
EMPIRICAL FOUNDATIONS AND FORECASTING METHODOLOGIES
From the first week of the analysis, I found the pattern had nothing to do with the Rainbow Charts or Stock-to-Flow Model others have proposed in comparison to Gold, whose fiat price hasn't been a challenge to manipulators ever since Volcker began raising policy rates in the 80s, which finally let COMEX Gold Futures truly start swaying Gold Spot prices.
TECHNICAL ADDENDA: CONSTRAINTS AND RECURRING PATTERNS
Up Legs until now, seem confined to return no higher than ~20% over the immediately previous high return, within their ~1000-day period. This has occurred persistently between the months before and after each halving. While Down Legs seem confined to a return loss no higher than 80% of the immediately previous high return, within their ~400-day period. This has also occurred persistently between the months before and after each Midpoint.
Finally, here's why we can't just pick and choose the last +400 Day bottom. Until the "Latest Bottom" hypothesis is proven (at the end of the present cycle), we cannot firmly establish its precise date or price. All we can do is theorize its value ex-ante (via interpolating the last two ex-post time period samples -as shown in the excel sheet below). No alt text provided for this image. Ex-ante y and x values after line 35 are merely projections trained on the confirmed ex-post values shown above it.
THE CHALLENGE OF FUTURE PREDICTIONS
The above means that December 26th is not even the lowest price low, it results from averaging the total amount of days that elapsed as the last two ex-post lows were reached. The same goes for the price and date at the end of the dashed white lines, on the top chart. In sum, every one of the ex-ante y and x values projected by the dotted lines are merely projections trained on the confirmed ex-post values locked on top of the partial ellipses formed by the slope of the secants dropping off.
AN ESSENTIAL WARNING
Upon the above, please note that viewing this occurrence from a financial gain perspective betrays the prejudices that keep our society from considering what other forces move the universe. Instead, this evidence should compel our sense of wonder & unbiased search for answers & opinions. For instance, no matter the brainwash we've been taught about Economics through our lives, we're being played by an algorithm. Finally, even if the algorithm's author were to assure us his contraption is meant to help us own good, and all evidence seems to point that way, no one, except you can decide what that means for your financial futures.
Since inception, nearly 15 years ago, Bitcoin's full price-cycle (peak to trough and back) has been patently agnostic to rate policy changes, liquidity events, inflation expectations, and all other macroeconomic news.
This never-before-seen degree of cyclicality versus the surrounding macroeconomic environment is positively mind-boggling, not just for the NYFED, but for every one of us who has researched financial & economic history, professionally.
BITCOIN'S ASYNCHRONOUS VALUATION MECHANISM
However, when methodically inspecting Bitcoin's price-asynchronicity versus the deeply distorted and ultimately arbitrary pricing system, imposed by central planners to their benefit, its genesis becomes evident:
Bitcoin has established an independent, if contemporary currency-valuation system, whose supply-demand dynamics are predominantly the opposite of our current monetary system's fictitious and constantly expanding Money Layers. In essence:
"Levering upon its 100% demand-inelastic production vs its Layer I monetary role -as a final-settlement asset, Bitcoin's utility function is wholly independent of systemic financial variables- allowed Satoshi to game our instinct to preserve intrinsic value (rooted in scarcity vs hoarding behavior traits) in order to tightly pin its price to a ~1000-Day Up Leg vs a ~400-Day Down Leg, regardless of the fiat macro subset."
CHRONOLOGICAL CONSISTENCY IN BITCOIN’S PRICE TRAJECTORY
Thus why, when you split Bitcoin's 15-year price chart into 4 lines each for the halvings (blue) & their midpoints (grey), you find that each peak to trough cycle has pivoted up or down over the same time interval between each color pair.
To visualize these dynamics, I drew blue verticals for each halving date and grey ones for each midpoint date. As the chart shows, Up Legs start about two years before halvings and end about one year after them, lasting about 1000 days. That is when Down Legs start: a few months before midpoints and they end a few months after them, lasting about 400 days, which drove me to conclude that by:
EMPIRICAL FOUNDATIONS AND FORECASTING METHODOLOGIES
From the first week of the analysis, I found the pattern had nothing to do with the Rainbow Charts or Stock-to-Flow Model others have proposed in comparison to Gold, whose fiat price hasn't been a challenge to manipulators ever since Volcker began raising policy rates in the 80s, which finally let COMEX Gold Futures truly start swaying Gold Spot prices.
TECHNICAL ADDENDA: CONSTRAINTS AND RECURRING PATTERNS
Up Legs until now, seem confined to return no higher than ~20% over the immediately previous high return, within their ~1000-day period. This has occurred persistently between the months before and after each halving. While Down Legs seem confined to a return loss no higher than 80% of the immediately previous high return, within their ~400-day period. This has also occurred persistently between the months before and after each Midpoint.
Finally, here's why we can't just pick and choose the last +400 Day bottom. Until the "Latest Bottom" hypothesis is proven (at the end of the present cycle), we cannot firmly establish its precise date or price. All we can do is theorize its value ex-ante (via interpolating the last two ex-post time period samples -as shown in the excel sheet below). No alt text provided for this image. Ex-ante y and x values after line 35 are merely projections trained on the confirmed ex-post values shown above it.
THE CHALLENGE OF FUTURE PREDICTIONS
The above means that December 26th is not even the lowest price low, it results from averaging the total amount of days that elapsed as the last two ex-post lows were reached. The same goes for the price and date at the end of the dashed white lines, on the top chart. In sum, every one of the ex-ante y and x values projected by the dotted lines are merely projections trained on the confirmed ex-post values locked on top of the partial ellipses formed by the slope of the secants dropping off.
AN ESSENTIAL WARNING
Upon the above, please note that viewing this occurrence from a financial gain perspective betrays the prejudices that keep our society from considering what other forces move the universe. Instead, this evidence should compel our sense of wonder & unbiased search for answers & opinions. For instance, no matter the brainwash we've been taught about Economics through our lives, we're being played by an algorithm. Finally, even if the algorithm's author were to assure us his contraption is meant to help us own good, and all evidence seems to point that way, no one, except you can decide what that means for your financial futures.