Picking out Patterns in Bitcoin
Please do not assume this to be the undeniable truth. No one knows exactly what will happen. The above is simply a pattern that I have observed with a description below; consider it as you may. Note that I considered this a long....from here you will need to create an exit strategy but I believe this may be a good entry....in fact possibly the floor of the next bear market.
There seems to be a good deal of concern right now that the bitcoin bull run is over. I offer evidence to suggest that now, when people are getting antsy and panic mode has set in for some, is simply the real shakeout before the real blast off.
Bitcoin experiences cyclical and symmetric reductions in the increase of rate in supply every halving. Halving because that increase in rate of supply halves. 100 to 50 to 25 to 12.5 to 6.25 as so on. It is precisely this mathematical reduction in rate of supply increase coinciding with increasing demand that should theoretically create reproducible patterns in price.
It has been noticed that following halving events bitcoin price ramps dramatically, and this time around has followed that pattern.
But where are we? If you glance at the above graphic the black lines represent halvings. The two ends of each hypotenuse of each red triangle represent the peaks of the bull runs. The red circle represents analagous positions in each cycle. At this point in each cycle a lot of people were probably thinking it was all over watching the price struggle or drop for periods of over a month.
As can be noticed, in each successive bull run the price has shattered the previous ATH and climbed appreciably without any substantial pull back. I will say "substantial" as meaning returning to past the 100 day moving average. In 2017 the price reached 3K, 3x the the previous ATH, before experiencing a month+ long return to wick down to the 150 MA. Currently the price reached 65K, but ranged sideways in the 50-60K region for a more significant amount of time, from a previous high of approximately 19.5K...also around 3X.
Currently, we are riding between the 150 day MA and 200 day MA, with a rather high chance we may see a touchdown or wick onto the 200 day MA. It can be noticed that in this cycle the volatility is less. Even if we reach 42K or 40K or 39K, that will only represent a ~40% decrease from the highs of 60-65K.....nearly exactly comparable to the drop we saw in 2017 from 3K to 1.8K...and both after shattering the previous ATH before any substantial pullback.
That we may be hitting the 200 day MA as opposed to 150 day MA should not be viewed with as much significance because....as volatility has decreased it is simply that the price and 200 day MA have now had time to catch up with each other.....a 40% price correction now touches the 200 day MA rather than the 150 MA (decrease in volatility).
Supply and demand of coins is still most likely working itself out with a dramatic ramp in price still waiting to be seen to the peak of this next triangle around the end of this year or the first few months of next year. It is also likely that this price increase is not actually driven by investors, but a consistent percent increase in a now very large number of people in the global south and other countries buying and using bitcoin for transactions comparatively smaller than big time investors...because they are most likely more open to adoption when alternatives don't exist or seem equally risky. Lag time in converting bitcoins back into fiat currency, along with calculated hodling of coins, creates the price increase. It is therefore possible that for all the fuss by traders over comments from Elon Musk, it is not actually traders driving the price, but simply demand from an increasing number of people finding bitcoin to be the smoothest way to transact value over distance or in areas where stability of central currencies are struggling (Nigeria, Lebanon, Venezuela, etc).
You may say, well why did the price dump after Elon's tweets? I would ask you where Elon's tweets were in 2017 when the price acted nearly identically. The pattern circumscribes any and all chaos....which is exactly why the pattern exists in the first place.
There seems to be a good deal of concern right now that the bitcoin bull run is over. I offer evidence to suggest that now, when people are getting antsy and panic mode has set in for some, is simply the real shakeout before the real blast off.
Bitcoin experiences cyclical and symmetric reductions in the increase of rate in supply every halving. Halving because that increase in rate of supply halves. 100 to 50 to 25 to 12.5 to 6.25 as so on. It is precisely this mathematical reduction in rate of supply increase coinciding with increasing demand that should theoretically create reproducible patterns in price.
It has been noticed that following halving events bitcoin price ramps dramatically, and this time around has followed that pattern.
But where are we? If you glance at the above graphic the black lines represent halvings. The two ends of each hypotenuse of each red triangle represent the peaks of the bull runs. The red circle represents analagous positions in each cycle. At this point in each cycle a lot of people were probably thinking it was all over watching the price struggle or drop for periods of over a month.
As can be noticed, in each successive bull run the price has shattered the previous ATH and climbed appreciably without any substantial pull back. I will say "substantial" as meaning returning to past the 100 day moving average. In 2017 the price reached 3K, 3x the the previous ATH, before experiencing a month+ long return to wick down to the 150 MA. Currently the price reached 65K, but ranged sideways in the 50-60K region for a more significant amount of time, from a previous high of approximately 19.5K...also around 3X.
Currently, we are riding between the 150 day MA and 200 day MA, with a rather high chance we may see a touchdown or wick onto the 200 day MA. It can be noticed that in this cycle the volatility is less. Even if we reach 42K or 40K or 39K, that will only represent a ~40% decrease from the highs of 60-65K.....nearly exactly comparable to the drop we saw in 2017 from 3K to 1.8K...and both after shattering the previous ATH before any substantial pullback.
That we may be hitting the 200 day MA as opposed to 150 day MA should not be viewed with as much significance because....as volatility has decreased it is simply that the price and 200 day MA have now had time to catch up with each other.....a 40% price correction now touches the 200 day MA rather than the 150 MA (decrease in volatility).
Supply and demand of coins is still most likely working itself out with a dramatic ramp in price still waiting to be seen to the peak of this next triangle around the end of this year or the first few months of next year. It is also likely that this price increase is not actually driven by investors, but a consistent percent increase in a now very large number of people in the global south and other countries buying and using bitcoin for transactions comparatively smaller than big time investors...because they are most likely more open to adoption when alternatives don't exist or seem equally risky. Lag time in converting bitcoins back into fiat currency, along with calculated hodling of coins, creates the price increase. It is therefore possible that for all the fuss by traders over comments from Elon Musk, it is not actually traders driving the price, but simply demand from an increasing number of people finding bitcoin to be the smoothest way to transact value over distance or in areas where stability of central currencies are struggling (Nigeria, Lebanon, Venezuela, etc).
You may say, well why did the price dump after Elon's tweets? I would ask you where Elon's tweets were in 2017 when the price acted nearly identically. The pattern circumscribes any and all chaos....which is exactly why the pattern exists in the first place.
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