Bitcoin: Timing Cycle Bottoms

Summary

In this video, the host explores Bitcoin's market cycles and introduces a key indicator: the Bitcoin percentage of supply in profit and loss. This chart helps identify market bottoms by showing the percentage of Bitcoin holders in profit versus loss. Historical trends reveal that when these percentages converge, it's often a sign that the market cycle is nearing its low point. The host emphasizes the cyclical nature of Bitcoin's price movements, particularly in midterm years, and encourages viewers to watch for similar patterns in 2026. The video wraps up with a reminder to subscribe and check out premium content.

Takeaways

• 😀 Bitcoin market cycles are cyclical, with major lows often occurring at the end of midterm years or the beginning of pre-halving or pre-election years.
• 📉 Bitcoin's supply in profit vs. loss is a great indicator for identifying market bottoms, but not as useful for spotting market tops.
• 📊 When Bitcoin hits new all-time highs, the percentage of supply in profit increases, and the market usually goes into a period of decline after that.
• 📅 Historically, Bitcoin supply in profit bottoms between 35% and 45%, which is a key indicator for market lows.
• 🔄 The Bitcoin market tends to reset in midterm years, making it useful to observe supply in profit and loss data during this time for potential bottom signals.
• 💡 In 2022, 2018, 2014-2015, and 2011, Bitcoin's supply in profit and loss converged around the market's low point, signaling a potential cycle bottom.
• 🧑‍💻 The current Bitcoin supply in profit is about 74.3%, with 25.7% in loss, but it’s expected to decrease as the market trends toward a lower high and lower low.
• 📉 Bitcoin’s supply in profit often drops deeper when market highs are reached, followed by a counter-trend rally before continuing downward.
• 📈 In 2021, Bitcoin’s market cycle was different, with a fleeting new all-time high that didn’t follow the usual pattern, but this is an anomaly.
• 📅 Looking at the moving average of Bitcoin’s supply in profit and loss can offer a clearer view of market cycle behavior, especially in midterm years.

Q & A

What is the main focus of the video?

The video focuses on analyzing Bitcoin's market cycles, using a specific indicator (Bitcoin's percentage of supply in profit and loss) to help navigate and understand these cycles.

What is the key indicator discussed in the video?

The key indicator discussed is the 'Bitcoin percentage of supply in profit and loss,' which shows the percentage of Bitcoin supply held in profit versus the percentage held in loss.

Why is identifying the lows in Bitcoin's market cycle challenging for many people?

Identifying the lows can be difficult because Bitcoin often reaches new all-time highs, making it hard to predict when a major low will occur. Historical trends show that significant lows often happen at certain points in the market cycle, such as midterm years or pre-halving years.

What is the historical trend for Bitcoin's lows in relation to the midterm years?

Historically, Bitcoin's major lows tend to occur around the end of midterm years or at the beginning of the pre-halving year (typically every four years).

What does the percentage of Bitcoin supply in profit and loss reveal?

This indicator reveals the percentage of Bitcoin supply that is currently in profit versus in loss. It is cyclical and helps identify key points in the market cycle, particularly the bottoms.

Can the 'supply in profit and loss' chart help identify market tops?

No, the 'supply in profit and loss' chart is more effective at identifying bottoms rather than tops, as Bitcoin can continue setting new highs for extended periods, making it harder to pinpoint tops.

What does a convergence of the supply in profit and loss charts typically signify?

When the supply in profit and loss charts converge, it often indicates a market low. This has been the case in previous market cycles, such as in 2011, 2014-2015, 2018, and 2022.

How does the percentage of Bitcoin supply in profit typically behave during a market cycle?

The percentage of Bitcoin supply in profit tends to be high during bull markets (often above 70%), and it drops towards lower values (around 35-45%) during bear market bottoms, indicating that more holders are underwater.

What is the significance of the supply in profit being at 74.3% currently?

The current figure of 74.3% of Bitcoin supply being in profit suggests that the market is still in a relatively bullish phase. Historically, once this percentage drops to around 35-45%, it marks a market bottom.

Why is the 'supply in profit and loss' chart not discussed much during bull markets?

The chart is not discussed much during bull markets because, during such periods, the supply in profit can stay at or near the highs for extended periods. It is more useful when Bitcoin's price begins to drop or stagnate in midterm years.

What does the video suggest for Bitcoin's market outlook in 2026?

The video suggests that the Bitcoin market in 2026 could follow a similar pattern to past cycles, with the 'supply in profit and loss' chart potentially converging and indicating a market bottom by the end of the year.