The Bitcoin Cycle: A guide to time the next major entry
מעודכן
Bitcoin could be approaching a cycle low in the next 3-9 months.
Zooming in on the weekly chart, you'll see that price tends to develop a horizontally defined resistance *after* hitting a cycle low and consolidating. Once price breaks out from that resistance, it triggers a buy signal. This is the type of action I want to see to get long with size.
On the topic of cycles, I'll use a paragraph from the first book I read that got me interested in financial markets.
From CYCLES: The Mysterious Forces That Trigger Events
How can one tell, in any given instance, whether or not a
regular rhythm that one discovers is caused by a real underlying
force or merely by chance? Let's begin with some common sense
and simple logic. If a cycle has repeated enough times, with
enough regularity and with enough strength, the chances are that
it is significant. Such regularity cannot reasonably be mere accident.
Bottom line: A cycle's reliability is based on how well it repeated that cycle in the past. I will assume the cycle in this post remains in play, and will use it as my guide to help time the next major entry. The key thing is to enter based on a signal rather than buy just because price is in the cycle low range. The cycle just adds to the weight of evidence and helps with timing - it is NOT the signal.
Zooming in on the weekly chart, you'll see that price tends to develop a horizontally defined resistance *after* hitting a cycle low and consolidating. Once price breaks out from that resistance, it triggers a buy signal. This is the type of action I want to see to get long with size.
On the topic of cycles, I'll use a paragraph from the first book I read that got me interested in financial markets.
From CYCLES: The Mysterious Forces That Trigger Events
How can one tell, in any given instance, whether or not a
regular rhythm that one discovers is caused by a real underlying
force or merely by chance? Let's begin with some common sense
and simple logic. If a cycle has repeated enough times, with
enough regularity and with enough strength, the chances are that
it is significant. Such regularity cannot reasonably be mere accident.
Bottom line: A cycle's reliability is based on how well it repeated that cycle in the past. I will assume the cycle in this post remains in play, and will use it as my guide to help time the next major entry. The key thing is to enter based on a signal rather than buy just because price is in the cycle low range. The cycle just adds to the weight of evidence and helps with timing - it is NOT the signal.
הערה
In the two prior bear markets (2014 - 2015 and 2018 - 2019) there was capitulation in price going into the following year, which led to the cycle low range. Price is setting up for a repeat as we're in September 2022 going into 2023. What's different this time is it's firmly trading below the 200 week MA which makes a capitulation type event more probable in the next 4 months. Price would need to close above 25k to invalidate. For now, exercise patience and plan for lower prices as we head into this zoneהערה
Capitulation type action looks on schedule based on current price action. Lots of support at 18500 but likely fails. Potential line in the sand is the red line
הערה
We're about halfway through the cycle here, just in time for the ETF to get approved last week.
A correction in time and/or price is likely in Q1 2024. If the correction will mostly be with time (price consolidates in a tight range between 45k - 39k), then a deeper correction in price might follow in Q2.
Correction in time: 10-month EMA catches up as demand persists somewhere between 39k or higher.
Correction in price: A retest of ~35k on the high-end, or a deep retest of 30-32k on the low end (less likely for now).
A combination of both is ideal for it to properly recharge
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