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Bitcoin Doubter? The Truth is in the Trends: Part I

Bitcoin Doubter? The Truth is in the Trends - Part I

An Analysis of 4 Bitcoin Bull & Bear Market Cycles Since 2011

Where is the next Bull Market Peak?

I did not start this analysis with the idea to write an article about a Bull Case for Bitcoin.

I woke up early this morning and checked the BTC price. Wow — I thought, it keeps going up, when is this going to come crashing down? As of 7:15 AM Eastern Time in the US, it was $49,700 on Coinbase. As a long-term HODLer/Bitcoin bull, I had been gleefully greeting the recent bull market, but also in the back of my head I did have a creeping thought. Where will it peak? Is now the time to sell? Will I lose so much of this gain and regret it later? I lost so many unrealized gains in 2017 I don’t want to mention it. I woke up, in fact, fearful of losing it all. But I took a deep breath and decided to gather more information before I made any rash decisions.

I have always believed that the strongest case for bullish sentiment for Bitcoin is that with the repeating market cycles over the years, the price keeps going up long-term. Still, that doesn’t resolve that feeling of butterflies in my stomach when the price drops 5 or 10 percent.

I have perused “all-time” charts in the past and have heard others mention them. However, I have never actually looked at those numbers that closely.

Luckily, I am obsessed with numbers, so I decided to have some fun to counter those butterflies in my stomach. I decided to actually look at the numbers.

Before I show you what I saw, let me state that:

  1. NEVER, NEVER, NEVER invest more than you’re willing to lose. NEVER.
  2. This is not financial advice. Do your own research.
  3. This only takes into consideration statistical data, not fundamentals.
  4. I am not formally trained in statistical analysis or trading.
  5. The past does not always reflect the future — but it’s the imperfect and most used way we can analyze markets.

That being said, here we go:

DATE: BTC Price

9-Jun-11: $19.58 (Bull Top)
18-Nov-11: $2.13 (Bear Bottom)
10-Apr-13: $181.66 (Bull Top)
6-Jul-13: $69.05 (Bear Bottom)
29-Nov-13: $1,132 (Bull Top)
17-Jan-15: $199.25 (Bear Bottom)
16-Dec-17: $19,497 (Bull Top)
16-Dec-18: $3,283 (Bear Bottom)

Crunching the numbers further, I then compared each bull market top and bear market bottom to the prior bull top and bear bottom. Then I looked at the weakest bull market based on % increase and the bull market average % increase. I also looked at the strongest bear market.

Next Bull Peak vs. Last Bear Bottom

Based on these numbers, the mean bull peak is 66.51x higher than the prior bear bottom. The weakest bull market peak was 19.40x higher than the prior bear bottom.

If repeated from the last bear bottom of 16 December 2018, the average would result in a bull peak of $218,358 (Mean Case). If the weakest bull peak was repeated it would result in a bull peak of $53,833.59 (Bearish Case).

The strongest bear market to date (the prior one — 16 December 2017 peak) had a bull peak of 97.85x the prior bear bottom of 17 January 2015. You will probably start laughing at me at this point. Again, I am only doing equations here, and the past is NO guarantee of the future. I was actually going to leave this out but I finally broke down and decided I had to write it — $321,247.93. No, this is not a joke. It’s also not very likely, and I would also like to note that on this metric — bull peak vs. prior bear, it goes up/down/up, so based on that, this is more likely to be a weaker bull peak than the last one.

Next Bull Peak vs. Last Bull Peak

Alternately, comparing the bull peaks to the prior bull peak, the mean is 10.91x higher than the prior bull peak. The weakest bull market peak was 6.23x higher than the prior bull peak. The strongest bull peak vs. prior bull peak was again the last one in December 2017, at 17.21x higher than the prior one.

Based on this, if repeated:
Mean Case: $212,713.77
Bearish Case: $121,521.93
Bullish Case: I don’t even dare… really I don’t. DM us on Twitter @TheLatestBlock if you want.

Conclusion

Like I said above, THIS IS NOT INVESTMENT advice. But, averaging out the bearish cases, above, and not including any bullish fundamentals, this would indicate the peak of the current Bitcoin Bull Run at $87,677.76. The average of the Mean Cases is $215,536.34.

Needless to say, I am not rushing to sell my Bitcoin…

 

Coming up:

Bitcoin Doubter? The Truth Is In the Trends: Part II
Where Is the Next Bear Market Bottom?

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This article is not investment advice, nor does it take your personal financial situation into account. Never invest more than you are willing to lose, and don’t buy Bitcoin or other investments on credit. I write about my observations and personal opinions with the purpose to share what I have learned with others.

Disclosure: I am invested in Bitcoin and other cryptocurrencies.

Author

Alexandre Lores is a personal finance writer from Tampa Bay, Florida, with the goal to help one million people achieve financial freedom. He has spent over five years studying markets and economics, finding Bitcoin in 2017 and never turning back. He frequently appears on TV and in online news articles and is a regular Twitter spaces host.

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