Mapping The Crypto Market Cycle - Part 6 (Phase 2 Begins)
It's been a while since I provided an update on my market cycle phase chart, so here it is. Back in October, once I saw that growth was slowing down a bit for cryptocurrencies, I drew a speculative curve, to show where altcoins might land on their final leg down.
My last Market Cycle update was in video form. You can view that here:
In the below chart, you can see that alts bounced from the orange curved trendline and might be about to follow something like what I drew back in October, in terms of trajectory. You can press play and see. I have since revised it to fit my current view a little better.
Currently, alts and Bitcoin have finally broken their downtrends from June. Altcoins look particularly strong. I will make a separate post on what I think can happen in the short term, but long term I sort of expect the entire market to start gaining some legs here.
What I believe is that we are FINALLY entering Phase 2 of the market cycle. During Phase 2, altcoins and Bitcoin both go up at the same time, and dominance drops slightly. I have been calling the top in dominance for some time now, ever since the Summer's end. Even if dominance does break down, if we followed the previous market cycle, Bitcoin dominance wouldn't really accelerate to the downside until the previous all-time high has been reached. Notice I said REACHED and not BREACHED. This would occur in Phase 6, so we have a while to go. In the previous cycle, you can clearly see that alts went parabolic as soon as Bitcoin tested its previous all time high in March, 2017.
In our current cycle, here is where I believe we are:
Interestingly, altcoins started slowly outperforming Bitcoin at this point in the last cycle:
This is what could happen to dominance, if we see an exact repeat of the last cycle, except dominance makes a new low after making a lower high in 2019:
Zoomed in:
I know this looks nuts, but I'm simply trying to create a projection based on ever-evolving market conditions. My projection has changed a number of times already since I started doing this, but a couple things have remained consistent: I still think we have been in the process of bottom consolidation, and I still believe there's a strong possibility alts will again outperform Bitcoin in this new cycle. This chart still reflects that possibility.
I believe this to be a very important part of the market cycle. Buying at this point in the previous cycle would have been handsomely rewarded. I also have talked about slower growth. Indeed, the market may be slowing down, but this chart actually shows what would happen if the next peak were reached within 2 years. This is certainly possible, but my phase boxes may have to be redrawn if things take longer. It may even take twice as long. This is just to show where we might be, in terms of the current cycle.
As for bearish possibilities, we don't want to see cryptocurrencies roll over back into their downtrends. We should at least see some consolidation, and then ultimately a grind up towards higher levels than June. As per my most recent analysis, I think the 500-700 Billion zone makes sense for the next local market peak. I will of course continue to revise this projection based on market conditions. This is not financial advice. This chart is extremely speculative and is subject to change.
-Victor Cobra
My last Market Cycle update was in video form. You can view that here:
In the below chart, you can see that alts bounced from the orange curved trendline and might be about to follow something like what I drew back in October, in terms of trajectory. You can press play and see. I have since revised it to fit my current view a little better.
Currently, alts and Bitcoin have finally broken their downtrends from June. Altcoins look particularly strong. I will make a separate post on what I think can happen in the short term, but long term I sort of expect the entire market to start gaining some legs here.
What I believe is that we are FINALLY entering Phase 2 of the market cycle. During Phase 2, altcoins and Bitcoin both go up at the same time, and dominance drops slightly. I have been calling the top in dominance for some time now, ever since the Summer's end. Even if dominance does break down, if we followed the previous market cycle, Bitcoin dominance wouldn't really accelerate to the downside until the previous all-time high has been reached. Notice I said REACHED and not BREACHED. This would occur in Phase 6, so we have a while to go. In the previous cycle, you can clearly see that alts went parabolic as soon as Bitcoin tested its previous all time high in March, 2017.
In our current cycle, here is where I believe we are:
Interestingly, altcoins started slowly outperforming Bitcoin at this point in the last cycle:
This is what could happen to dominance, if we see an exact repeat of the last cycle, except dominance makes a new low after making a lower high in 2019:
I know this looks nuts, but I'm simply trying to create a projection based on ever-evolving market conditions. My projection has changed a number of times already since I started doing this, but a couple things have remained consistent: I still think we have been in the process of bottom consolidation, and I still believe there's a strong possibility alts will again outperform Bitcoin in this new cycle. This chart still reflects that possibility.
I believe this to be a very important part of the market cycle. Buying at this point in the previous cycle would have been handsomely rewarded. I also have talked about slower growth. Indeed, the market may be slowing down, but this chart actually shows what would happen if the next peak were reached within 2 years. This is certainly possible, but my phase boxes may have to be redrawn if things take longer. It may even take twice as long. This is just to show where we might be, in terms of the current cycle.
As for bearish possibilities, we don't want to see cryptocurrencies roll over back into their downtrends. We should at least see some consolidation, and then ultimately a grind up towards higher levels than June. As per my most recent analysis, I think the 500-700 Billion zone makes sense for the next local market peak. I will of course continue to revise this projection based on market conditions. This is not financial advice. This chart is extremely speculative and is subject to change.
-Victor Cobra
