Macro, multi year view of BTC. Expectations of next cycle.

2022年10月14日

In the chart you can see the following:
a) blue lines are the halvings that BTC went through and the estimated one in 2024
b) the measure of time between each cycle low and halving
c) how long it took to top out after the halving

Hi everyone,

I just want to share my view of the following years in Bitcoin. I am a long-term swing trader and I build my trades around time and human psychology (i.e. cycles). I would like to keep it short and sweet and outline the critical aspects of what this chart seems to portray.

A) First of all, it is very likely that we are seeing absolute cycle lows.

The timing with each cycle seems about right and I think that a leg lower from here, would be free money, right? Well, not so fast. We need to mention the incoming "doom and gloom" that's ahead of us. And well, what moves this world, will also move bitcoin - DEBT. This asset class has not gone through an inflationary crisis (yet). However, looking at the reaction of bonds in the recent year and all the currencies devaluation to the USD dollar, it does seem that we must have reached a "local" top in some sense. HINT: This might be good for bitcoin.

Therefore, while I wouldn't rush saying this is time to sell all your house belongings and buy BTC here, I do think it is worthy of your attention. As I previously said above, if it goes below, I would try to deploy capital very aggressively. So to sum up this point, timing and price decline feel right for a cycle low.

B) Next bull run might run closer to being a left-translated cycle - aka. it might top faster than the previous cycles.

It can be observed that with each cycle, we are getting closer and closer to making a cycle top much earlier in the cycle. With a little bit of cheeky maths, if we are to observe an arithmetic decline in the time required from one top to another, you would see that this time around we would require 10 to 14 weeks after halving to reach a top. This makes sense to me for 2 reasons.

1) Over time it only makes sense that the price reaches its highest point in the anticipation of the halving. Our well-known "sell the event" type of thing. We have seen how this has played out in crypto numerous times, I hope this isn't a debate anymore.
2)Two, once a force kicks in one direction it will also swing in the other direction with at least a similar force. And yes, I'm talking about macro world events. There has been an acute amount of negativity that has been bundled up in the last two years and I think in one to two years from here is plenty enough for this to clear out. This includes lower inflation, we find out that debt and financial markets do not implode and perhaps the whole Russia-Ukraine and broader conflict will be coming to an end. You can check previous inflation charts in the US during the 1900s and they all show a quick peak and then a prolonged period of higher inflation (roughly 4%) - seems survivable to me. When it comes to the Russian conflict, wars at this scale would not last more than 3-4 years as it is too expensive and would just bankrupt the country. Russia would not go that far even if they seem like they would.

So people will be relieved, more happy --> more productive --> back to growth folks.

I hope all of this makes sense and that you have enjoyed reading my thoughts. Prove me wrong.