My Bitcoin Pull Back Scenario
I want to start by saying that I realize BTC is looking very bullish right now. But with all the difficulty it is having getting and staying above 38k, I feel that this could lead to a pullback. At a minimum, a short-term pullback and worst case a pullback lasting several weeks or more.
I could be wrong and BTC could just keep moving higher, but I want to keep an open mind, even to the worst-case scenarios. So this chart depicts what I see as potential bearish scenarios.
Looking at the chart you can see four different scenarios. Below is an explanation of each scenario.
1 = Short-term pullback, 35K level holds and BTC moves higher from there.
2 = 35K level fails and BTC drops down to retest the breakout level around $31,500 and bounces higher from there.
3 = 35K and
31K levels fail and BTC drops back below 30k, possibly as low as 25k.
#3 would act as a secondary scare for a large number of crypto holders forcing many to panic sell, a wick down into the low 20k levels could be possible.
4 = BTC getting too bullish too fast going into the SEC decision on the ARK 21shares ETF. And the SEC rejects their application causing a severe sell-off.
I am very bullish on Bitcoin long-term so I would consider any of these scenarios as a great time to add to positions. In reality many people will panic sell when they should actually take advantage of lower prices and buy more.
In my last published chart, I showed how similar the last two market cycles were as far as elapsed time between events (Bottom to halving), (halving to peak), (peak to bottom), and even (Bottom to the date BTC hit a new all-time high).
Also, the overall length of the market cycles, Bear market bottom to the next bear market bottom were extremely close, 1431 to 1437 days.
My reason for mentioning this is because so far this market cycle seems to be following the same trend. Looking at the elapsed time from the bear market bottom to the halving, market cycle #2 (2015 to 2018) had an elapsed time of 542 days. market cycle #3 (2018 to 2022) had an elapsed time of 513 days.
For this current market cycle the halving is estimated to occur sometime between April 17th and the 23rd. That would give this market cycle an elapsed time of between 513 and 519 days. That is very similar to the last two cycles.
This leads me to believe that Bitcoin is still following the same 4-year cycle as the previous two market cycles. If this continues to be the case, it means that there is still plenty of time to build positions. It also means that any pullbacks should be looked at as buying opportunities.
If this market cycle does in fact mirror the last two as far as elapsed time, then that would mean that a bull market peak could be expected in late 2025. Obviously, the price of BTC won’t move straight up as there will be corrections along the way and some will most likely be severe, possibly 30% or more.
So, my strategy will continue to be the same as it has been for months. I will continue to DCA slowly into my positions and occasionally increase the size of my purchases during steep pullbacks.
In closing I just want to say that no one really knows how this current market cycle will play out. And just because the previous two cycles matched so closely it doesn’t guarantee that this cycle will as well. But, until I see clear evidence that BTC is deviating from the previous market cycles I will continue to believe that I have at least six to twelve more months to build positions.
I could be wrong and BTC could just keep moving higher, but I want to keep an open mind, even to the worst-case scenarios. So this chart depicts what I see as potential bearish scenarios.
Looking at the chart you can see four different scenarios. Below is an explanation of each scenario.
1 = Short-term pullback, 35K level holds and BTC moves higher from there.
2 = 35K level fails and BTC drops down to retest the breakout level around $31,500 and bounces higher from there.
3 = 35K and
31K levels fail and BTC drops back below 30k, possibly as low as 25k.#3 would act as a secondary scare for a large number of crypto holders forcing many to panic sell, a wick down into the low 20k levels could be possible.
4 = BTC getting too bullish too fast going into the SEC decision on the ARK 21shares ETF. And the SEC rejects their application causing a severe sell-off.
I am very bullish on Bitcoin long-term so I would consider any of these scenarios as a great time to add to positions. In reality many people will panic sell when they should actually take advantage of lower prices and buy more.
In my last published chart, I showed how similar the last two market cycles were as far as elapsed time between events (Bottom to halving), (halving to peak), (peak to bottom), and even (Bottom to the date BTC hit a new all-time high).
Also, the overall length of the market cycles, Bear market bottom to the next bear market bottom were extremely close, 1431 to 1437 days.
My reason for mentioning this is because so far this market cycle seems to be following the same trend. Looking at the elapsed time from the bear market bottom to the halving, market cycle #2 (2015 to 2018) had an elapsed time of 542 days. market cycle #3 (2018 to 2022) had an elapsed time of 513 days.
For this current market cycle the halving is estimated to occur sometime between April 17th and the 23rd. That would give this market cycle an elapsed time of between 513 and 519 days. That is very similar to the last two cycles.
This leads me to believe that Bitcoin is still following the same 4-year cycle as the previous two market cycles. If this continues to be the case, it means that there is still plenty of time to build positions. It also means that any pullbacks should be looked at as buying opportunities.
If this market cycle does in fact mirror the last two as far as elapsed time, then that would mean that a bull market peak could be expected in late 2025. Obviously, the price of BTC won’t move straight up as there will be corrections along the way and some will most likely be severe, possibly 30% or more.
So, my strategy will continue to be the same as it has been for months. I will continue to DCA slowly into my positions and occasionally increase the size of my purchases during steep pullbacks.
In closing I just want to say that no one really knows how this current market cycle will play out. And just because the previous two cycles matched so closely it doesn’t guarantee that this cycle will as well. But, until I see clear evidence that BTC is deviating from the previous market cycles I will continue to believe that I have at least six to twelve more months to build positions.
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