4 year cycle pricing for Bitcoin. Fantasy?
First off I must credit @rektcpaital for publishing his 4 year cycle chart here on trading view and a video explanation on his You Tube Channel youtu.be/yR2y3kudrvc.I would recommend following him here, Twitter and out on You Tube. Brilliant technical analysis and insight.
So,I simply ran a trend line across the closing highs of the prior Year One Candles (YOC), into infinity (also plotting year 2140 when all 21 Million BTC will have been mined--BTW the price then is unfathomable even by today's frothy Trillion dollar standards in debt, spending and market cap (1.26 e+43 or Tredecillion). Maybe in 119 years that will be the new standard :-)...better own some BTC now for your descendants (never sell it and pass it down)!
Moving on I also added a parallel lower trend line rooted from BTC's first full year close in 2011. What's fascinating is that both completed 4 year cycles have stayed in this parallel trend channel. Including peak-to-trough drawdowns of 87 and 83 percent in cycles 1 and 2 respectively. Worth mentioning is that the several 40-50% corrections during bullish trends are not visible from this perspective. It really helps put the investment into the the right frame for long term hodling.
Instead of trying to guess how far each Year One candle would run based on previous cycles, I simply terminated candle #1 for
the current cycle and the next 3 cycles at the upper trend line. Using the prior YOC as the base and log scale to account for percentage gains we can see the massive potential if indeed the halving phenomenon were to continue at the current pace and trend for Bitcoin.
Will exponential scarcity of supply following each halving year coupled with ever increasing demand produce such a chart? Finally, I also forecasted 85% crashes into future Year Two candles to visualize the magnitude of future drawdowns.
My belief is that Bitcoin is real and is the future of money. We hear the terms like "network effect"-- "digital monetary rails"--"store of value"--"digital gold." That should all work out over time as adoption, regulation and taxation take their respective courses. Accumulation in the second and third years of cycles should pay off long term.
So,I simply ran a trend line across the closing highs of the prior Year One Candles (YOC), into infinity (also plotting year 2140 when all 21 Million BTC will have been mined--BTW the price then is unfathomable even by today's frothy Trillion dollar standards in debt, spending and market cap (1.26 e+43 or Tredecillion). Maybe in 119 years that will be the new standard :-)...better own some BTC now for your descendants (never sell it and pass it down)!
Moving on I also added a parallel lower trend line rooted from BTC's first full year close in 2011. What's fascinating is that both completed 4 year cycles have stayed in this parallel trend channel. Including peak-to-trough drawdowns of 87 and 83 percent in cycles 1 and 2 respectively. Worth mentioning is that the several 40-50% corrections during bullish trends are not visible from this perspective. It really helps put the investment into the the right frame for long term hodling.
Instead of trying to guess how far each Year One candle would run based on previous cycles, I simply terminated candle #1 for
the current cycle and the next 3 cycles at the upper trend line. Using the prior YOC as the base and log scale to account for percentage gains we can see the massive potential if indeed the halving phenomenon were to continue at the current pace and trend for Bitcoin.
Will exponential scarcity of supply following each halving year coupled with ever increasing demand produce such a chart? Finally, I also forecasted 85% crashes into future Year Two candles to visualize the magnitude of future drawdowns.
My belief is that Bitcoin is real and is the future of money. We hear the terms like "network effect"-- "digital monetary rails"--"store of value"--"digital gold." That should all work out over time as adoption, regulation and taxation take their respective courses. Accumulation in the second and third years of cycles should pay off long term.
Nota
mment: Listened to a very bearish scenario from UK trader Clem Chambers of ADVFN. He is saying BTC is in a bear market and we're going to $10,000-$13,000. What caught my attention is that he referred to the long term cycle charts as is reference for this call. I don't agree with him. Here's why: going back to this 4 year cycle chart you can see that the closing price of the 4th year (halving year) candle acted as the floor for the Year ONE candle (which were in now for 2021).
Cycle 1 overshoot was nearly 4% then off to all time highs by year end. Cycle 2 was 22% overshoot then same scenario. Current cycle we did overshoot by 5% on June 22nd. We've now found footing with strong bullish divergence on short and long term MACD & RSI on daily timeframe indicators.
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