Bitcoin Cycle Top Is Coming But Not Until…

Summary

In this analysis, the speaker delves into Bitcoin's market cycles, focusing on key economic indicators such as the global M2 money supply, U.S. dollar index (DXY), copper-to-gold price ratio, PMI, Pi Cycle Top, and RSI/Bollinger Band phases. The speaker predicts Bitcoin is likely in the middle of its market cycle, with room for significant upward movement before a potential bear market. They emphasize the importance of these indicators and caution that while they offer insights, market sentiment and unforeseen events can still shift Bitcoin’s trajectory. The analysis suggests a possible Bitcoin peak in 2025 or even 2026.

Takeaways

• 😀 Bitcoin is expected to create a new all-time high before signaling the start of the next bear market, but market signals will give us clues ahead of time.
• 😀 The global M2 money supply, which includes cash, deposits, and savings, has historically been closely correlated with Bitcoin's market cycles.
• 😀 Bitcoin market cycles tend to align with changes in the M2 money supply, with more money in the system providing fuel for price increases.
• 😀 The DXY (US Dollar Index) is an important indicator for Bitcoin's price: a strong dollar tends to push Bitcoin down, and vice versa.
• 😀 Trump’s economic policies may drive the DXY down, which could push Bitcoin and other risk assets up.
• 😀 The copper to gold ratio is a strong indicator of Bitcoin's market performance, as it reflects industrial demand and economic strength.
• 😀 The ISM Purchasing Managers Index (PMI) shows a correlation with Bitcoin's cycle peaks, with Bitcoin often peaking after PMI does.
• 😀 The Pi Cycle Top Indicator has historically predicted Bitcoin's cycle tops, with past peaks occurring shortly after the indicator's signal.
• 😀 The RSI Bollinger Band percentage phases chart provides insights into Bitcoin’s cycle, with the all-time high breakout phase currently underway.
• 😀 Indicators suggest that Bitcoin is still in the mid-cycle phase, with more potential for upward movement, possibly extending into 2025 or even 2026.

Q & A

What is the relationship between Bitcoin and the global M2 money supply?

Bitcoin market cycles have been closely correlated to the global M2 money supply, which represents the total money supply available in the economy. As the M2 supply increases, more money is available for investment in risk assets like Bitcoin, potentially driving its price up.

What is the significance of the year-on-year percentage increase or decrease in the M2 supply?

The year-on-year percentage growth of M2 is considered an important indicator for Bitcoin's market cycles. A spike in the percentage growth is often closely related to Bitcoin's cycle peaks. Historically, the best times to buy Bitcoin have coincided with negative year-on-year growth periods of M2.

How does the US dollar index (DXY) influence Bitcoin's price?

The DXY measures the value of the US dollar relative to a basket of other currencies. When the dollar strengthens, Bitcoin and other risk assets typically decrease in value, and vice versa. The DXY has historically been at the bottom when Bitcoin reaches its all-time highs, signaling potential upward movement for Bitcoin when the dollar weakens.

What is the copper-to-gold ratio, and why is it important for Bitcoin's market cycle?

The copper-to-gold ratio compares the prices of copper, an industrial metal, and gold, a safe-haven asset. When copper prices rise, it indicates a strong economy, while gold tends to increase in times of economic uncertainty. Historically, peaks in the copper-to-gold ratio have coincided with Bitcoin's price peaks, suggesting that the current market is still in the mid-cycle phase with potential for a significant upward push.

How does the ISM purchasing managers index (PMI) relate to Bitcoin's market cycles?

The ISM PMI is a monthly survey that assesses the economic health of the manufacturing sector. The PMI has shown a correlation with Bitcoin's cycle peaks. For instance, Bitcoin reached its peak prices in 2021 when the PMI was near its own peak, and similarly in previous years. The PMI is still moving sideways, indicating that we may be in the middle of the cycle rather than nearing a peak.

What is the Pi Cycle Top indicator, and how has it predicted Bitcoin's past price peaks?

The Pi Cycle Top indicator tracks the 111-day and 350-day moving averages of Bitcoin's price. When the 111-day moving average crosses above the 350-day moving average, it signals that Bitcoin has likely reached its cycle top. This indicator has accurately predicted Bitcoin's cycle peaks in the past, such as in 2013, 2017, and 2021, suggesting a potential cycle peak in the near future.

How can the RSI Bollinger band percentage phases help predict Bitcoin's price movement?

The RSI Bollinger band percentage chart divides Bitcoin's market cycle into five phases, from the bear market to the peak of the cycle. The chart currently indicates that Bitcoin is nearing the end of the early top phase, with the potential for a major price breakout in the near future. This could point to a potential top for Bitcoin around September or October, aligning with theories of Bitcoin peaking 500+ days after the halving.

What is the significance of the surge in stablecoin market cap for Bitcoin's price?

The stablecoin market cap has surged past $200 billion, adding $40 billion since Trump's election win. This surge indicates that buyers are preparing to invest in assets like Bitcoin, as they convert fiat currency into stablecoins for potential market opportunities. This influx of capital could help push Bitcoin's price higher in the coming months.

Why is there uncertainty about whether Bitcoin's cycle will peak in 2025 or extend into 2026?

There is uncertainty because multiple factors could influence Bitcoin's cycle, including geopolitical events like trade wars and inflation or unforeseen events like a Black Swan event. Some analysts believe the cycle could peak in 2025, while others, including some ancient astronaut theorists, speculate that it could extend into 2026 due to various market and economic dynamics.

What should investors be aware of in terms of Bitcoin's price movement in 2025?

Investors should be aware that while most indicators suggest Bitcoin is still in the mid-cycle phase with room for price increases, the market is unpredictable. External factors like trade wars, inflation, and potential Black Swan events could change the trajectory. Staying informed and keeping a cool head will be crucial for navigating potential market fluctuations in 2025.