Two weeks ago I made a case about how Bitcoin's short-term trend was depended on which Channel pattern of the following would prevail, the Channel Up or Channel Down:
The price action emphatically showed that the Channel Up prevailed as BTC held the Higher Lows trend-line as a Support and bounced exactly on it. On today's analysis, I am making a case on a new Channel Up this time on the (very) long-term and how possible it is that it prevails over Bitcoin's historic Logarithmic Curve/ Channel
** Channel Up vs Logarithmic Curve ** As you see on the main chart, since the November 2013 High, BTC has formed a Channel Up, which has held both its Higher Highs (peaks of Cycles) and Higher Lows (bottoms of Cycles). Before that though, the price started trading on a Logarithmic Curve (the only pattern that could 'catch' Bitcoin's immense growth in its early years). Notice how the April 2021 All Time High (ATH) reached and got rejected exactly on the top of the Logarithmic Curve. Does that mean that this will prevail over the Channel Up and BTC already has peak and entered a new Bear Cycle. Until broken to the upside, it seems like it, but there is a dynamic that suggests otherwise and that has to do with the Fibonacci extensions.
** Fibonacci extensions. Cyclical and All Time ** As shown on the chart, the Top of the 2013 Cycle was just below the 2.382 Fibonacci Extension, so was the Top of the 2017 Cycle (all measured from the Top-Bottom of the previous Cycle. In fact, if we take only one Top-Bottom measure from the 2011 Cycle, we will see that the 2013 and 2017 Cycle Peaks have been just under the 2.383 and 3.383 Fibonacci extensions. The next (4.382) is also very close to the 2.383 Fib extension of the 2018 Cycle. I call this metric "the All Time Fibonacci extensions" and I've published an idea about those a few months back.
** Conclusion ** Naturally, if the Logarithmic Curve breaks to the upside, that would mean that the Channel Up prevails but with the issue in question being what's more likely to happen, in my opinion there are more probabilities for the Channel Up, due to the edge given by the All Time Fibonacci extensions. So the argument a long-term investor who is already in the market and is looking for the next long-term buy is either buy once the Log Curve breaks or on the next contact with the 1M MA50 (blue trend-line). In either case a realistic target can be within the 200k - 300k range (i.e. bottom band slightly below the 2.382 Cyclical Fib ext and upper band slightly above the 4.382 All Time Fib ext).
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Interesting analysis as always @TradingShot... my hopeful side leans towards the channel up, my practical side leans towards the logarithmic curve channel. In looking at the timing between the last two ATH and where the price would have to go to hit the top of the channel up by end of December, it seems unlikely the latter would occur given the overall issues presenting themselves in general for crypto in the near future. It also seems to make sense that the logarithmic curve's tapering down of the ATH potentials and it's smoothing of the volatility would be a natural outcome as mainstream adoption becomes more prevalent, and this is definitely in full swing now.
TradingShot
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@cosmicnexus, It is always good to read your opinion Nex, which I highly value. If April was the peak of the Cycle, it sure recovered more ground than the previous two, which makes it a new unique case for ATH. I have made a study on this some months back, let me find it and will post it here. Surely October/ November will be critical for this distinction.
cosmicnexus
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@TradingShot, good point... there is the possibility that the post-ATH (if it holds) recovery is just a bit of a fake out which could take a deeper plunge. Again, as I've shared before, 80-83% draw downs have occurred after the ATH's occurring between each halving. We only saw about 55% drawdown this time so far. To me it therefore remains to be seen if this halving cycle will not produce such a large drawdown for one, and if the most recent ATH is in fact going to actually hold and be that for this halving cycle.
If the 65K ATH holds this halving cycle then your logarithmic curve is going to be the most accurate indicator, if BTC breaks up beyond that level before next the halving, particularly if it occurs before May 2022 (24 months after the last halving), I would then expect a radical draw down to occur somewhere between that ATH and the next halving. This for me would be "all eyes on it like a hawk" scenario looking for where will be the right point to take profits on at least 50% of my BTC HODLings, and then buy back in after the drop.
I think October - December may be critical alright, but I'm also willing to give it until May if necessary for something decisive to happen that would indicate whether we have a 65K ATH this halving cycle or if it's going higher yet.
Either way, based on past activity it's entirely possible we may see a +80% draw down from the ATH this cycle, whether that be from 65K or higher.
achtung360
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Did you do the math to consider how much more the market cap would need to grow to hit that target and does it add up?
cosmicnexus
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@achtung360, yes, a very good point which is indeed highly relevant.