- February 10, 2023
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
We have done similar studies before, aligning past Bitcoin (BTCUSD) Cycles to get a projection of the current one. We have used Halvings, Peaks, Bottoms etc but this is the first time that we don’t just use everything into one mega analysis, but also incorporate the Fibonacci retracement and extension levels that show not only the Buy Zones put also the peak projection, making this study the Ultimate Cheatsheet!
** Cycles Tops and Bottoms **
The chart is pretty much self-explanatory. The time-frame on the 1W (weekly) and the starting point of all Cycles (we use the past 3, the first one is too aggressive to be relative for conclusion on this study), is their respective Tops/ Peaks. We didn’t distort any Cycle, all are just they way given by the Bars Pattern on their log scale. The orange trend-line represents Cycle 2022/23 (the current one), the black trend-line represents Cycle 2018/21 and the blue trend-line represents Cycle 2014/17.
** Cycle Convergence – Divergence and the Buy Zones **
As you see, their alignment during their Bear Phase of their Cycles is remarkably tight, as the don’t diverge by as much as one would expect. With the use of the Fibonacci levels, taking as Fib 0.0 the bottom of the 2018/21 Cycle (Black), we can designate two Buy Zones: The first one within Fib 0.382 – 0.236 and the Ultimate within Fib 0.236 – 0.0. As you see the current Cycle made a bottom and bounced just over the Ultimate Buy Zone.
What’s really interesting, is that the 2014/17 (Blue) and 2018/21 (Black) Cycles always converged after a divergence, which simply indicates the standard nature of the course of each Bull Cycle. We have to mention at this stage that the big divergencies of the 2018/21 Cycle was first on the April – June 2019 rally due to Facebook’s Libra enthusiasm/ speculation and second September – March 2020 due to the massive money printing and rescue packages to stimulate the economy from the COVID lockdowns.
** The amazing Halving Symmetry **
We have also incorporated the Halvings and as you see the symmetry is astonishing as all there are within a 2 month range. Halving 4, which is the next one is in the middle (May 2024), Halving 3 is on the left (May 2020) while Halving 2 is on the right (July 2016). This is just another demonstration of Cycle stability. Keep in mind that the Halving events are major cyclical events for Bitcoin as they cause a Supply Shock, thus stimulating the Demand. It is no coincidence that the Phase of the Parabolic Rallies has always started after the Halving.
** Where will this Cycle Peak? **
As for the projected peak, since every Cycle offers diminishing returns, the Peak is (or should be) lower each time. The 2014/17 Cycle (Blue) peaked on the 2.618 Fibonacci extension and the 2018/21 (Black) peaked on the 1.618 Fib. The next range in line is the 1.382 – 1.236 Fib Zone, which is approximately within $100k – $132k. A projected path (orange dotted line) to this Target Zone doesn’t again diverge much from the other Cycles.
We have to also account for outside fundamentals/ news, moving the projected trend higher if news like those in 2019 (Libra) or 2020 (stimulus) inject a new wave of enthusiasm into the market. For that reason, we have added a projected path to an extremely positive scenario (see chart below) than trends in the middle of the Black and Blue Cycles and shows a Peak above Fib 1.618, roughly above $250k. Unrealistic or not, it is a projection taken from this specific model.
Do you think this is the Ultimate Cheatsheet for Bitcoin or not? Feel free to let us know why in the comments section below!