An Analysis of 4 Bitcoin Bull & Bear Market Cycles Since 2011
Let me start off by giving some words of caution. This is not investment advice and does not take your personal financial situation into account. Bitcoin is very volatile. Only invest what you are willing to lose and don’t buy Bitcoin with credit cards. And lastly, do your own research too!
Where is the next Bear Market Bottom?
Picking up where we left off, let’s get down to it . No one wants to talk about this during the joyous hysteria of a Bitcoin bull market. I, for one, am very bullish on the long-term potential and value of Bitcoin. However, let’s get real, markets go up and down. There would be no market without bears and bulls, and no honest or intelligent advocate of any asset will tell you that it will always go up forever.
As I mentioned in Part I, I analyzed the last 4 bull and bear market cycles and have made predictive calculations based on these past cycles.
To recap, here are the prior bull market tops and bear market lows:
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)
What is missing in this analysis is, of course, where the “last” (a.k.a. “next”) bull market peak is, because that hasn’t happened yet. And thus, this article will not be able to measure the bear market bottom versus the last bull market peak. According to Part I, and strong fundamentals such as corporate adoption, it does not appear that this has occurred yet (or will any time soon). That being said, again, we do not have the data of the peak, so let us look at the other points above in this analysis:
Next Bear Bottom vs. Last Bull Peak
Based on the numbers above, the mean bear market bottom is at 20.8% of the prior bull peak. The lowest bear market bottom, was 10.9% of the prior bull peak. The strongest bear market bottom, was 38.0% of the prior bull peak.
Again, since there is no “last bull peak” to measure here, I won’t list out any calculations. Feel free to read Part I, or refer to this in the future, and make your own calculations.
Next Bear Bottom vs. Last Bear Bottom
As a note, I am discounting COVID-19 as a bear market bottom, as this was an extraordinary and short-lived event. Comparing the bear bottom to the prior bear bottom, 17 January 2015 was $199.25, and 16 December 2018 was $3,283, or 16.48x. If the last cycle repeats itself, at the same percentages, the next bear market bottom will be $54,104.
The mean market bottom is 17.26x higher than the prior bear bottom. The weakest bear market bottom was 2.89x higher than the prior bear bottom. The strongest bear bottom vs. prior bear bottom was 6 July 2013 at 32.42x higher than the prior one.
Based on this, if repeated, the market bottom would be:
Mean Case: $56,604.58
Bearish Case: $9,487.87
Bullish Case: $106,434.86
Conclusion
Averaging out the bearish cases above and not including any fundamentals, this would indicate the market bottom of the next bear market at $57,509.10.
And to repeat the calculations from Part I, this would follow a drop from the bull peak. The average peak calculation based on a series of past bull and bear markets was $215,536.34.
Coming up:
Bitcoin: The Bullish Case for a 22nd Century Digital Asset
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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.
