That’s the sentiment and the primary question.
The crypto markets have been terrible in return for 2024, through which the general consensus is whether a big crash is occurring.
It discussed in this latest video:
youtube.com/watch?v=moaw0C…
My short answer to this question is basically a hard NO. It’s also a question of what you would define as a potential crash. Bitcoin’s price is hovering around $54,000, a correction of 26% since the recent all-time high.
That’s a regular correction and very normal for the current state of the markets. However, when we’re looking at some other data points, we could define why the current primary question is surrounded by the ‘Bitcoin Crash’ topic. The fear & greed index for crypto has reached a number of 22.
The last time we had these data points for the fear & greed index was during the period of the FTX collapse, in November ‘22. To be honest, there were some legitimate reasons to question the future of crypto during that period, as basically the entire year was a disaster and the price of Bitcoin has hit new cycle lows.
Right now, we’re at $54,000, only 25% shy of a new all-time high, in a pro-crypto climate from macroeconomic perspectives, and the sentiment has flipped to these negative numbers, yet again.
This reminds me of a lot of things, hence why I’ve questioned myself whether another Bitcoin crash is coming. Of course, there’s a yes and a no to every story as a potential outcome. A yes is definitely possible for the markets if Bitcoin continues to ask as a risk-on asset and panic is occurring on the macro-economic (or US) playing field. I’m quite sure about that.
However, if we look at the most important variables, then I think we’re actually on the edge of having the ‘final’ run on equity bull markets, which is also the period where the adoption of crypto is going to go vertical in third-world countries and we’re going to experience the ‘Dot.com’ type of bubble for crypto, after which the Great Depression version 2.0 is likely to expand.
I don’t fancy valuing assets against the U.S. Dollar, it doesn’t make that much sense to me. The question then arises: is it copying the four-year cycle, yes or no? Well, it might actually be the case, as we’re consolidating after the Bitcoin halving has been taking place, however, the markets have been making a new all-time high as there’s been a tremendous increase in influx in Bitcoin through the ETF earlier this year.
However, if you’re looking at different dynamics rather than solely the U.S. Dollar, then you conclude that there’s a case of copying/pasting previous cycles as inflation-adjusted, Bitcoin hasn’t made any new all-time high as of yet.
And, I don’t know, but my view is that everyone is focused on a certain conclusion and everybody draws the same conclusions, then I’m quite the opposite. In that regard, I don’t think that we’re going to be witnessing a big Bitcoin crash, honestly, the odds of having a big crash on the equity markets are substantially larger (and yes, that could drag Bitcoin down).
The same thesis I do have about the four-year cycle. It seems like almost all participants of the crypto markets are eager to cash out in Q3/Q4 2025. What if that’s not happening? What if the four-year cycle is completely bullshit and we should be looking at the liquidity cycle? In that aspect, we might be copying/pasting the previous years.
This means: run upwards until March/April 2025, then a period of consolidation/correction and another run upwards going into 2026 where we peak somewhere in 2026, depending on the liquidity and macro-economic playing field in that period. Given the impact of the ETF, I also assume that we’re expecting to go higher than what everyone expects.
At the bear market low, people assume that we’re going to go way lower than the actual peak of a bull market does, it’s always like that. Once we’re at the peak of the bull market, people overestimate where the correction will land, where the markets are usually going way deeper than those estimates.
Anyways, if the liquidity cycle starts to fire up again, given the fact that QE is likely going to happen to combat a weaker economy and labor markets, it also seems likely that Bitcoin will surge substantially. Given that a weaker economy is also driving people out of the traditional economic system, I suspect that we’re going to have a lot of interest going into DeFi.
That’s why I put a lot of emphasis on valuing BTC against the SPX, as you can see in my chart. If you look at the chart, then you can easily see that we’re copying/pasting the previous cycle in 2019-2020 where an external factor of COVID accelerated the bull cycle quite quickly. Not through the halving, no, but through external liquidity being added in the markets. A recession or weaker economy can be another argument for a bull cycle.
The 2019-2021 got to an abrupt end as QT and rate hikes started to happen to combat inflation, if COVID stayed and liquidity continued to be added to the markets, without any rate hikes, we likely would have been going higher. That’s also why the previous cycle went super steep and volatile. This cycle is relatively more organic, as there’s no clear Black Swan taking place.
If we look at the chart, then the conclusion is that we’re down 35% from the ATH against the S&P, that we’ve not seen any new ATH in this cycle at all, and that we’re, therefore, copy/pasting the previous cycle entirely. We can also see that there’s been a significant correction taking place on the markets, which is likely coming to an end, just like the correction in 2019 landed at $6K, we’re likely landing at $45-50K on Bitcoin.
From that perspective, with the upcoming rate cuts from the FED the weakening economy, and the global liquidity being increased in China, it seems almost inevitable that we’re actually at the edge of the biggest bull cycle ever.
Hit like if you enjoyed this longread!
#bitcoincrash #BNBChainMemecoins nalysis
#DOGSONBINANCE