What’s The Worst Case Scenario For Bitcoin Right Now?

Summary

The video discusses Bitcoin's recent market downturn, drawing parallels with historical September trends. It examines the potential for a 7% drop, a recurring pattern seen in past years, and contrasts it with significant past declines like the 133% in 2019 and 19% in 2014. The script also explores the implications of the 4-year cycle, suggesting a possible retest of the 3-year resistance at 46k, which could set the stage for future rallies. Finally, it anticipates a bullish October, historically a month of significant upside for Bitcoin, with an average return of over 20%.

Takeaways

• 📉 Bitcoin has recently experienced a breakdown from its current market structure, with a weekly close below both the July uptrend and the channel bottom.
• 📊 Historically, September tends to see downside movements in Bitcoin's price, with an average of 7% decline observed in previous years.
• 📈 Despite September's typical downside, October has been a bullish month for Bitcoin, with historical average returns over 20%.
• 🔢 The script discusses the significance of the 4-year cycle in Bitcoin's market, with each year representing a different phase that influences price trends.
• 🌐 The video emphasizes the importance of a weekly close above $58,300 for Bitcoin to reclaim its overall downtrending channel.
• 📌 The script highlights that a 6% decline in September is not unusual and has been observed in multiple years, including 2022, 2021, 2020, 2018, and 2017.
• 📉 The video mentions a worst-case scenario for Bitcoin in September could be a 19% downside, which historically occurred in a bear market year like 2014.
• 📍 The script suggests that a 7% downside in September could align Bitcoin's price with a historically recurring figure, potentially leading to a price around $55k.
• 🔄 The video discusses the possibility of a retest of the 3-year resistance level in the 4-year cycle, which could set up for a rally in the subsequent year.
• 🚀 The script concludes by suggesting that despite current market pullbacks, October could bring significant upside, potentially setting up for a rally into new all-time highs.

Q & A

What is the current market structure of Bitcoin mentioned in the script?

Bitcoin has been developing a black downtrending channel, with a series of new lower highs dating back to mid-July and a series of higher lows dating back to early July.

Why is a weekly close above 58,300 significant for Bitcoin?

A weekly close above 58,300 is significant because it would allow Bitcoin to reclaim the overall black downtrending channel and potentially turn the July uptrend and channel bottom into new resistance.

What historical downside patterns are observed in September for Bitcoin?

Historically, Bitcoin has experienced downside patterns in September, with recurring downsides of around 7%, similar to those observed in 2022, 2021, 2020, 2018, and 2017.

What is the significance of the 7% downside in September for Bitcoin?

The 7% downside in September is significant as it is a historically recurring figure, having occurred on three separate occasions, and is currently on track to occur for a fourth time.

What is the worst-case scenario for Bitcoin's downside in September based on historical data?

The worst-case scenario for Bitcoin's downside in September, based on historical data, is a 19% downside, which was the worst ever downside observed in the month of September, occurring in 2014 during a bear market.

How does the script suggest the market behaves in October following a September downturn?

The script suggests that October tends to be a bullish month for Bitcoin, with historically recurring double-digit upside, and that the September downturn often sets up for the upside in October.

What is the '4-year cycle' mentioned in the script, and how does it relate to Bitcoin's price?

The '4-year cycle' refers to the pattern observed in Bitcoin's market where each year represents a phase in the cycle, with bull market peaking, bear market, macro accumulation, and halving years. The script discusses how the halving year (candle four) tends to break beyond the three-year resistance, setting up for potential exponential upside in the following bull market year.

What is the potential impact of a 19% pullback in September on Bitcoin's price?

A 19% pullback in September would align with the historical bear market retracement observed in 2014, potentially bringing Bitcoin's price down to around 48k, which is close to the three-year resistance level.

What is the script's perspective on the likelihood of a 19% downside in a halving year?

The script considers a 19% downside in a halving year to be of lower probability, as such a significant pullback has historically occurred in bear market years, not halving years.

What expectations does the script set for October's market performance?

The script expects October to be a bullish month with historical average returns over 20%, suggesting that despite the current downturn, there is a high probability for significant upside in October.