Bitcoin Supercycle theory - no blow-off top
Updated
BTCUSDBearish sentiment and fear in the market, therefore a less profitable possible forecast for the future.
The crypto crowd had expected a parabolic top in Q4 2021, identical to the 2013 and 2017 bullrun highs. History repeats itself but it would be too easy and predictable for all market participants. A typical reason why exactly this will not happen.
The problem is that we don't have enough cycles to compare to know how Bitcoin and crypto changes as it grows.
With a higher total crypto market capitalization, we have extended/lengthening cycles. That means we have longer bull runs followed by a shorter bear market. Also less return in the short term due to less parabolic momentum.
There is a possibility that since we reached the 1 trillion total market capitalization in January 2021, we are in a long super cycle without ever seeing a blow-off top again. That would mean a bearish forecast for next weeks and Q1 2022 if we have not seen a higher high until then.
A trigger for this assumption are indicators of technical analysis. Especially reaching the red logarithmic top curve with two diagonal support/resistance lines in the middle. This has been expanding since 2011 and was able to predict a price range afterwards. That would take us to a maximum low of $ 20k per bitcoin over the next few months. Also a retest of the white highlighted high of the 2017 run. There has never been such a retest, but it would fit the theory of the super cycle.
Further indicators are an orange marked bearish divergence in the RSI (falling relative strength index at the same time as rising prices) from January top (65k) to November top (69k). Although prices are rising, there is no longer as much volume and purchasing power in the market. This means the market could face a trend reversal and low price targets. The blue bearish cross in the MACD (Moving Average Convergence/Divergence) also indicates this.
In line with the trigger for the technical analysis, there are reasons for this bearish correction due to external fundamental influences that could continue to have a negative effect on all financial markets, described in yellow.
Nobody wants the predictable crypto dream to end by now, but a super cycle is the result of large adoption and a good outlook for a healthy regulated market. Even if that means we don't have a large parabolic blow off top without a large volume and currently not even media attention.
This analysis was drawn on the weekly timeframe. As a result, some data are estimated and not accurate.
Trade closed: target reached
The stock markets have corrected. The more plausible bearish scenario has played out. In the coming days I will present the next analysis.
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