Crypto, Distilled
When will the consolidation end? Despite prevalent feelings of pessimism and anger, the price of $BTC has only dropped 15% from its high. Renowned trader @BobLoukas brings hope: the darkness before dawn, mid-term accumulation in the cycle, and the emergence of cycle peaks. Here are his key points.
In the monthly chart, we reached the historical high of the previous cycle in the 16th month, which took over two years in the previous cycle. We are now in the third month of consolidation. Historically, $BTC tends to pause after reaching its historical high before eventually reaching the peak of the cycle. A longer consolidation period implies that the next rally will be healthier and stronger.
Moving to the weekly chart, after 14 weeks of consolidation following the ETF news, there has been a 12% drop from the high. The current oscillation was expected after the nearly doubled increase from the recent lows in January 2024. The low point of the 7-week cycle in January was at $38,000 (doubling in price).
Why hasn’t the market rallied? Bob points out several key factors: whales from the previous cycle selling near $60,000, concerns about a potential monthly double top, outflows from GBTC, a shift from on-chain assets to ETF assets, and the early pricing in of ETF expectations. The rise in the fourth quarter of 2023 was driven by ETF speculation.
When will the consolidation end? Patience is needed as we have already tripled since September 2023 and a pullback is necessary to gather strength. Similar to the doubling cycle low in the first quarter of 2023, a broad base formation precedes the rise in the fourth quarter. The oscillation may continue until July or August to complete the bottoming process.
When might the market see its peak? According to the 4-year cycle, the peak may still be far off. Previous cycles have taken 33-35 months from low to high. Following this pattern, October 2025 is a possibility (another 16-17 months). The significant gap between the 10-month moving average and the price suggests a potential need for a pullback.
Why is everyone so angry? Bob explains that this bull market feels challenging for many: chasing speculative altcoins (fierce competition among investors), waiting for a 30-35% correction, and missing out on buying opportunities at the high.
Possible scenarios: we may soon see the next local bottom, possibly at the end of the month. Bullish signs include higher lows, well above the low in January 2024, indicating market strength. After this local bottom, one scenario is to sweep it and reclaim the high. The second scenario is to continue the oscillation without breaking the historical high. This phase may last until September, forming a local bottom without surpassing historical highs. The third possibility is another 30% drop, typical in past bull markets. Similar to 2017 but with the presence of ETFs, a significant difference.
Trends convergence: all three trends converge around October, November, and December 2024, with the goal of breaking the historical high and further rising. During this period, Bitcoin’s trends may significantly impact the investment returns of altcoins.
Resetting emotions: Bob believes that after the April surge, the market sentiment reset is positive. On-chain data shows a transfer of coins from long-term holders to new holders in higher ranges, forming a solid foundation. The dip may present a buying opportunity.
Bob’s buying strategy: Bob last bought near the cycle low at around $17,000. Now, he is eyeing potential buying opportunities for $BTC below $50,000. He suggests those with insufficient positions consider adding during this consolidation period.
Macro top in 2025: Bob expects the second phase of the cycle to be healthier. He anticipates the market peak to occur in the latter half of the current cycle. However, the timing of the peak may vary, possibly in the second quarter of 2024 (30th month) or earlier, unlikely to be in the fourth quarter of 2025.
