Welcome crypto enthusiasts!
Today I want to go back in time to look at the beginning of the second Bitcoin 4-year cycle (2015 to 2019) and analyze how it transitioned into a new bull market. I am doing this to try and gain insight into the current (which is the third) major 4-year cycle (2019 to 2023).
Looking at the 2015 chart you can see a large consolidation period, the second 4-year cycle began at the beginning of this consolidation period. You can see that this particular consolidation period lasted approximately 290 days until there was an explosive breakout from the consolidation on a marked increase in volume . As you can see just prior to this massive spike a golden cross occurred, you can also see that during this spike the 100 exponential moving average (EMA) crossed above the 200 EMA for the first time in over a year. Once this spike peaked you can see that there was a 41% pullback to retest the breakout level. Bitcoin eventually bounced off of the breakout level after testing it several times and then took off and never looked back, this was the beginning of the bull market cycle which lasted from the end of 2015 to the peak in December of 2017.
So now let's look at this current 4-year market cycle in the chart above. Looking at the 2019 chart you can see once again a consolidation period which lasted approximately 126 days. This consolidation period again marks the start of this cycle.
Just like as happened in 2015, you can see an explosive breakout from this consolidation period on a marked increase in volume. You can see once again there was also a golden cross during the current spike and note that the 100 day EMA is just about to cross over the 200 EMA for the first time in almost a year. What we do not know yet is exactly how this will play out. Will we see a pullback just like in 2015 to test the breakout level? If so BTC would need to pull back approximately 45% which is in line with the pullback in 2015.
Another question is, is this the start of a new bull market cycle? My feeling is that what we are witnessing is the start of a new bull market. However, this does not mean that Bitcoin is just going to rocket higher to new all-time highs any time soon. Looking back at the 2015 breakout, it took over a year for the price of BTC to climb to a new all-time high. I have no way of knowing if it will take that long this time but it very well could.
Either way, as I said my opinion is that we are now experiencing the early stages of a new bull market cycle. My opinion is that we will see a pullback from this current peak, I don't know if it will be a 45% pullback but I wouldn't be surprised to see a pullback at least into the mid $5000 area. Up to this point, I have been trying to be patient and slowly accumulate but I will be accelerating my Bitcoin purchases on any meaningful dips. Strap in because I feel like it is going to be on hell of a ride!
Until the next Blog post, take care!