Crypto Analysis | Bull market Top has shifted to 2022

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In the last post Bear market or middle of the Bull, I argued that we were in fact still in the middle of the bull market rather than already being in bearish territory

The main reason for why I thought that we were in a late phase of the bull market was the fact that the main channel (seen as the yellow lines here) and which corresponds to the middle of a bull market has been breached in the "Musk Rally" earlier this year. Without Elon Musk's announcement I was arguing for the main pattern seen in the chart below (the black line).

Since this channel was never breached before without triggering the late phase of the bull market I reasoned that this was also going to be the case this time. However, prices have also never broken into this channel in a bull market. With this being the case now we have two options: the bear market is upon us or instead, we are still in the middle of it. It has become quite clear to me that the latter is much more likely. And there is a very simple reason for this: time!

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There simply hasn't been enough time for the top of the bull market to have occurred yet. A very good indicator is the halving events roughly every 4 years which are marked with the vertical lines in the chart below. As you can see the second bull market occurred after the first halving event 364 days later. The third bull market top happened 532 days after the second halving event. The bitcoin market is clearly extending horizontally as well as vertically. This means that every next market top should come in at a later time. Extrapolating this (non linear) trend would give us a range of about 776 to 960 days for the next market cycle top. This corresponds to a 46% to 80% extension.

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The recent highs of 60k+ would have been clearly too early and too low to have been the top of this current cycle. I think this is very evident when one looks at the chart above.

The "Musk Rally" therefore constitutes a "fake out" and we should expect prices to go as low as 20k (although I think ~23k is more likely) before finally transitioning into the late phase of the bull market.

The peak of this cycle is yet to be determined, but I think it could be anywhere from 200k to 500k. It is important to keep in mind that with the bitcoin cycle maturing, the cycle tops will be less and less dramatic.

 


As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!

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