Author: David Canellis, Blockworks; Translated by: Baishui, Golden Finance
If you believe in the massive fractal energy, then it will completely determine the price of Bitcoin in the coming months.
As far as we know, Bitcoin hit an all-time high of nearly $73,740 in March, which was the peak of the current cycle.
That would mean the bull run is over. Bitcoin and Ethereum trading down 5% today — driving almost every other currency except stablecoins into the red — certainly didn’t help boost sentiment.
But the thing about markets is that you never know when they will peak.
Looking back, Bitcoin’s all-time high in December 2017 was clearly the high point for the next three years, even if altcoins would continue to rise for a few more weeks.
In March 2021, when Bitcoin first broke above $61,000, it was not certain that Bitcoin would plunge another 13% by November (just eight months later) after retracing nearly in half.
At some point it became clear that the bull run had run its course. The bears may have made that point earlier than the bulls, but regardless, the Terra implosion in May and the cascading liquidations and bankruptcies that followed really nailed it.
When it comes to price, all we can really do is look backwards. It’s been 585 days (about 20 months) since Bitcoin bottomed in November 2022, which for convenience we’ll call the start of the current bull run.
This chart depicts the contrast between the bull markets. So far, so good.
Using this very basic definition, the first two bull markets peaked after about 840 and 1,060 days. So if we are destined to repeat these periods - a big if - then we are firmly in the second half of the cycle.
In the past two quarters, the price of Bitcoin has increased 6x and 3x, respectively. Even after the recent drop, Bitcoin's return since bottoming has reached 4x year to date, putting it in the midst of its recent bull run.
If Bitcoin did peak in March, it would be the shortest bull cycle on record, not including its first year of price discovery.
In the past two bull runs, most of Bitcoin’s gains occurred in the next 200 days, with increases of 20x and 100x from the bottom, respectively.
We know that each cycle has diminishing returns — so whatever moves Bitcoin makes may not be as explosive. This could leave crypto investors eager to take big profits elsewhere. Historically, altcoin seasons have helped close the gap.
But as is now well documented, there has been no altcoin season so far in this cycle, at least not in the same sense as in previous periods.
According to the definition outlined in the previous edition of the Empire Newsletter, there have been three distinct altcoin seasons over the past seven years. Two of them coincided with the Bitcoin halving, and each ran for about a year and a half and ended when Bitcoin peaked.
The Bitcoin halving is marked with a dotted line, and the altcoin seasons are marked in blue.
A shorter altcoin season lasted nearly seven months, from late 2018 to the middle of the following year.
This time around, neither ETH nor TradingView’s OTHERS index (which tracks the market capitalization of all cryptocurrencies outside the top 10) has recovered to its all-time high valuations from 2021.
The altcoin season will either arrive late or not at all, depending on how bullish or bearish you are.
Regardless, the outcome of this bull run is very different from other bull runs to date.