Longer Cycle Theory

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2021-10-25 00:40:08

Bitcoin broke out above the $50,000 price level and then corrected around $49,000. Several views on the current BTC bull cycle are offered.

The first is the view of supercycles. When the market reaches a certain size, the market price of BTC will not have large fluctuations in the short term and will be more stable. Some argue that this bull run will put BTC into a super cycle.

During Bitcoin’s current bull run, we’ve only seen five major price corrections, the price still swinging by as much as 50% in a short period of time. Therefore, Thuan believes that the super cycle will not take place at this time.

Another view is that BTC currently goes on a cycle every 4 years. And the next view is that BTC is currently still in a bull season but the duration of the bull season will be longer than the cycle every 4 years ago. That is, the BTC bull season occurs every four years after the BTC halving takes place.


The common ground of these two views is that the current BTC price has not peaked and will continue to grow. BTC price, after reaching a peak at $65,000, fell more than 50% to around $30,000-$40,000 and continued to accumulate at this price range. In the past month, BTC has grown again and has surpassed the price of $50,000. Some major altcoins hit new highs like ADA, SOL,…

Or the major American media channels continue to report good news about BTC, helping to increase acceptance of BTC and crypto. Google Trends data on BTC searches is currently still low compared to 2017 and May 2021. These are unheard of at the peak of the 2017 bull run.

Currently, the market has not seen the fomo from individual investors and new investors to the market. Until BTC rises to a certain price, it will attract a large number of retail investors to the market. This is the group of people that will help push the price of BTC up sharply.


Theory of cycles every 4 years

The fundamental difference here is the duration of this growing season. The 4-year cyclical view points to the end of the BTC bull season by the end of the year.

The growth document of past halvings shows the number of times BTC price hit new highs.

As in 2013, BTC price reached ATH (All time high) 52 times before the price peaked. Next, 74 times ATH is the number of the 2017 bull season. In the current bull run, BTC price has only 32 times reached ATH so far. So, many think BTC price could hit even higher levels during this bull season.

According to Lark Davis, the growth spurts of 2012 and 2017 both started to grow strongly from October until the end of the year and then ended. So, he thinks that if it follows the previous cycle, the price of BTC could reach a price of $100,000 or more by the end of the year.

The BTC price during this bull season is also said to be similar to 2012 when there were two peaks during the bull season. During the 2012 bull run, before peaking, the price of BTC had a smaller peak than before. From this small peak, the price of BTC fell more than 80% and a few months later continued to grow strongly and reached new highs.

Another data supporting this is based on the Pi Cycle Top signal.

The Pi Circle Top indicator is often said to be an indication of the top of the BTC price. Every time the red line (111DMA – 111-day moving average) in an uptrend crosses the blue line (350DMAx2 – 350-day moving average x2) is a sign of BTC price peaking. The history of the peaks of 2013, 2017 shows signs of this index appearing.

Most recently, when BTC hit $65,000 in May and then the price went down, the Pi Circle Top sign appeared once again. Many people think that this sign will appear again when BTC hits new highs during this bull season.

Longer cycle theory

The longer bull season view believes that the BTC price will be able to end by the end of 2022. In this view, it is argued that the 4-year cycle is not too much of a concern. One person who strongly believes in this is Benjamin Cowen. We need to look at the market more broadly, he said, and each cycle is BTC going from lows to very highs.

From the chart above, it can be seen that the cycle of 2011-2012 in blue is shorter. The later cycles of 2013 (red), cycle 2017 (yellow) and cycle 2021 (purple) have increasingly longer periods. Those who believe in this hypothesis argue that the following cycles are all longer in time than the former.

The current BTC as well as crypto market has more and more large investment organizations and companies participating. They also selected BTC as one of the long-term storage and inflation-resistant assets in their portfolio. BTC products are increasingly diversified such as BTC ETFs, futures contracts, other derivative products,… Benjamin Cowen said that, in the coming time, the participation of new investment institutions in the market The bull market is also a reason why the BTC bull cycle will be longer. And this bull season for BTC could extend into 2022.

In the BTC market, an important player is long-term investors (Hodlers). According to Will Clemente, up to 83% of Bitcoin has not moved for at least 3 months, 70% of BTC has not moved for at least 6 months despite the strong increase in BTC price within the past 1 month.

When BTC rises, many sellers drive the price down but the holders are the long-term custodians and help keep the price of BTC. And over the years, the lowest price of BTC has been raised.

The opinion arguments about value, about inflation and on-chain indicators, Stock To Flow model, etc. continue to be valid and show that they are consistent and true to the beliefs of long-term investors. then they will continue to store BTC. Thuan said that if the price of BTC goes into the crypto season at the present time, it may shake the beliefs of the holders and will greatly affect the market, not just the price going into the winter. Here we also see the power and importance of long-term investors

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