Above: (Fig. 1) We can see the life cycle of Bitcoin (BTC) since its creation. It has always followed a 4-year cycle pattern, and thus all the crypto markets created around Bitcoin, have followed it. Each market cycle consists of 3 years of price increases, as much as 30,000% (bull markets), with 1 year of price decreases of around 85% on average (bear markets). 2022 represents the red box, one year of decline. Under normal circumstances, the best time to buy crypto, is always 1 year after the peak of the last market high, which is now. What makes things more difficult and risky is for the first time since Bitcoin was created, the stock market and U.S. economy are going through their own bear markets and recessions.
Above: Figures 2 & 3 represent the areas where a bottom and reversal are likely to occur for Bitcoin (red support lines & white arrow), at which point we will be going all in on our crypto investments. Taking everything into account, within the greater economy and financial markets, it is highly possible that the bear market for crypto extends to March 2023, with stocks being in a bear market until September 2023. Crypto is a much smaller asset class, thus it takes a lot less money to flow into crypto to recover it. Given the extensive on-chain data, we are able to see that the majority of people who have been involved in the crypto market have sold and left, thus meaning a bottom or reversal is in the very near future. However, the zone that Bitcoin is currently in does not represent an important support area, which I have highlighted in the red horizontal lines. Given the fact that the S&P and Nasdaq are at resistance lines, and look like they will break down, I still expect lower prices in crypto over the next 3 to 4 months.
Above: Figures 4 & 5 represent snapshots of the S&P I took about 2 weeks ago, as it was approaching the long-term downtrend line. Figures 6 & 7 represent the resistance currently being faced by the S&P on the downtrend line. I am currently expecting the S&P, Nasdaq, and most stocks to roll over this month and expect an especially bearish Q1 for 2023.
Above: Figure 8 represents the possible bearish scenarios for the S&P in 2023, whereas Figure 9 is a more bullish option. It is important to know which of these options will play out, to assess when the bottom has formed in Bitcoin, and thus the crypto market as a whole. If we see the bullish scenario, Bitcoin may be near the bottom and we will do a buy soon. If we see the bearish scenario, we will wait for much lower, to the red support lines.
Above: Figure 10 represents the historical crash in the S&P, when in a bear market. As we are already in a bear market, and 2023 will be a bear market, this is relevant. As the Fed raises interest rates, this strengthens the US dollar, which is why if you listened to me, you are holding US dollars. The fed and most central banks are forced to raise rates until inflation is relatively under control, which means we will get higher rates for the next few years.
Above: If we are going to see higher interest rates, this has a negative effect on risk markets such as stocks and cryptos. However, recessions are bullish for precious metals, which some of us hold, and I expect people to start putting more money there, instead of stocks and crypto. However, what we need to watch for is when the Fed and central banks pivot, or stop increasing rates, as this is when the final and large crash happens in the S&P, and thus will affect crypto markets. The months I am watching for crashes are January, March, August, and September in 2023, as historically, these are the bearish months. If this crash happens sooner, we will get a significant bottom in crypto and have an excellent buying opportunity. If this crash comes later, we can see a small bottom in crypto with an equal or greater bottom later on. Both of these will be good buying opportunities.
If you found this information valuable, then subscribe. Subscribers receive this data and analysis ahead of time. The PDF is available for download above and was published on December 6, 2022. I am not a financial advisor and I do not give financial advice.