In #WEB3 there is a lot of debate about future trends. Most people can be classified into two main factions:
4 year cycle
These people believe that Bitcoin will go through a 4-year period of overvaluation and undervaluation.
They believe it takes approximately 4 years for Bitcoin to go from the high to the bottom of the cycle.
According to this theory, Bitcoin will peak sometime in 2025.
Elliott Impulse Wave 5 and Advance Top
This group believes that either this cycle is different or it is institutionally driven.
Many also believe that the last cycle is not over yet because no explosive top has occurred, citing the fact that the cycle is lengthening.
Elliott Wave theorists predict the fifth and final wave of this cycle, which will reach a powerful parabolic top either this year or early next year (2024).
Now let's talk about my personal opinion.
I've looked at a ton of charts and cycle data from multiple sources, including technical analysis, on-chain data, psychological factors, and more.
I think the best results can actually be seen in everyone who thinks about factions.
4-year cycle thinkers are quick to overlook the early price action of this cycle. This is primarily driven by belief in the impact of the halving on price.
When the Bitcoin supply decreases approximately every 4 years, this should trigger a decrease in supply, causing the price to increase.
While this makes sense, the impact of miners' supply output on Bitcoin's price is unlikely to have a significant impact now that the total size is relatively large.
Personally, I remember in 2019, many people predicted a new all-time high that year. This comes after Bitcoin formed an interim high around $14,000. It took Bitcoin a year and a half to surpass that price. Everyone who predicted an early top was wrong at that point.
But the price is different now. The trend in 2019 has been completely parabolic. This results in a medium-term bear market. Not to mention the black swan event in the cycle that occurred in 2020.
Like 4-year cycle theorists, Impulse Wave theorists are quick to rule out 4-year cycles. They say, "Everyone thinks so!" Most people can't be right.
I want to remind this group that when 2021 came around, many expected it to peak that year, and it did. Unknown factors like price and exact timing maintain an important element of surprise. They believe an early top will trigger the longest and most severe bear market in Bitcoin history.
Both groups seemed to ignore one particular cycle that seemed to break all the rules, 2011-2013. Let’s take a look at this cycle. You can remember:
▌2011-2013 cycle
Believers in the 4-year cycle may argue that this cycle started earlier, but based on the cycle contours of the data, 2011 met the criteria for a traditional bear market.
Regardless, this cycle did not follow the traditional path of a single top. If you start the cycle earlier, you could argue there are 3 tops in total.
I've outlined our relative position based on data, and you can find the evidence in many of my previous tweets.
This cycle would meet all the criteria for both theories: an early top and a late top.
Now, I want to explain why I think the two theories may be merging this cycle.
▌Theory combination
I think long-term data from many sources is the key to success. Through the analysis of countless data, I found some interesting examples that call for early parabolas (vertical price movements).
▌DXY correlation coefficient
The signal here is divided into 3 stages.
Early Bear Market End Signal (Purple)
Bear market end signal (red)
Parabolic start signal (green)
All of this happens when Bitcoin’s correlation to the U.S. dollar is low. The parabolic signal has triggered. By definition, this is the starting point where every price parabola begins. (will be shown later)
▌Vigor signal
This signal has two parts:
RVGI forms a bearish crossover when it crosses the Golden Vigor threshold
RVGI forms a positive crossover after a bearish crossover
In most cases, this will trigger a parabolic cycle, and in the case of 2016-2017, most of the bull market moves.
Due to the black swan event of 2020, there was only one false signal.
I also looked at many other charts that were either calling for the bulk of a bull market that was about to begin, or were parabolic. I'm looking specifically at those charts here that cry out for parabolas (vertical price movements).
▌Parabola
By definition, a parabola occurs when Bitcoin does not retest healthy bull support levels, such as the 20-week exponential moving average.
Parabolas don't last very long, taking an average of about 12 weeks from start to finish.
I've marked each parabola in green here.
Looking at our relative position in the cycle, based on the 2011-2013 cycle, it would take approximately 34 weeks to see the beginning of the parabola.
That would put us at the end of the parabola around 2024, but I estimate it could be earlier, which I'll discuss later.
▌Cycle theory on November 28
So, we’ve explored the possibility of early tops, but what about later cycle tops?
To do this, I’ll turn to my November 28 cycle theory:
My theory is as follows:
The first halving (November 28, 2012) triggered an actual supply shock. Subsequent halvings kept the cycle balanced. That's why the model starts from a specific location.
Since then, the relationship between Bitcoin price and dates has gotten interesting. It can tell us when Bitcoin will peak and bottom within 21 days of accuracy, and what will happen on a yearly basis.
This situation remains today for 10 years. I see it bottoming out in 2022 after I created it in January 2023.
It divides the cycle into 4 parts:
Green year - optimal cycle price and return to mid-range price (half of the previous all-time high).
Blue Year - Prices stay around fair value (median) and move toward all-time highs at the end of the year.
Red Year - Prices make new all-time highs and form a cycle top at the end of the year.
Orange Year - Bitcoin enters a bear market, the price becomes undervalued, and a bottom forms at the end of the year.
These conditions are true every year and it has and continues to prove to be a very powerful model.
Given its level of accuracy, we have no reason to expect it to fail this cycle. It tells us that the true top of the cycle will occur in late 2025.
Another reason for our expectations is our cycle position. Although an early top did occur in 2013, it later continued to rise during the same year.
Depending on our relative position, the 2015-2017 cycle may not be over yet. These cycles are likely to maintain their structure and not have a catastrophic bear market that does not allow for late cycle tops.
The evidence is starting to favor both theories.
Now let’s look at another factor, price.
Time is slightly easier to estimate than price, but I have some reason to believe price will be significantly constrained.
▌Trend Pattern Price Model
This model may be a little complex, but I think it's important to present all the data on a chart.
This model uses future angles found from the angle degrees of cycle highs and lows. It predicts a price of $130k within the theoretical timeframe of the cycle through November 28th.
The top section is from peak to peak, and you can see how this capped the price at the April 2021 top. (First black arrow) While many may argue that fundamentally there is no limit to price, I think this is an absolutely ridiculous argument. Trust me when I say that people love to talk about Bitcoin’s “fundamentals”, they tend to be at the top of the cycle.
What makes this last cycle unique is that it created two cycle tops in very close time, and from there a trend formed that coincided with the trend pattern price model, which I believe will create a very important cycle point.
Now we come to the final observation, the possibility of the upcoming cycle:
▌Cyclic possibility
From the above evidence and other evidence not included (which you can see in my previous tweet...), we get a projection that looks like this.
The excitement surrounding ETFs appears to be the catalyst that will push prices to new highs, combined with the evidence I have presented.
Bitcoin tends to form cycle tops after positive news events, and I think the launch of an ETF is a good candidate. This is why the early top is placed in April 2024.
This coincides with other important events, including the upcoming Bitcoin halving.
As stated before, I think a trend consisting of two previous tops will prove to be a huge price limiter. Top in April will take us to $90,000.
We would then see a mid-term bear market, creating a final top at nuance, above trend around 130k, late 2025. This is what I think is possible. Absolutely? not completely.
The price at the first top may not reach the top trend, and it may not create a new all-time high. In order to create a new all-time high at that time, it would have to break through one of N28CT's conditions (a new all-time high is only created in a red year, 2025).
There is also the possibility that the price will hit a trend top by the end of 2025, which could take us just above $100,000. To be conservative, I personally prepared a lower price.
Summarize
The evidence seems to suggest that we may be getting the best of all possibilities, satisfying both the early top and the theory of the 4-year cycle.
I'll act when the long-term data tells me, so these are just thoughts. We'll see what actually happens when the facts emerge.
Even if what many expect to happen does happen, the following points remain true: People will have doubts about their ideas. There are many unknown factors, retaining the element of surprise (price and exact timing).
