Investigating Changing Cycles of Crypto Markets

Bitcoin's likely not breaking 100k anytime soon and that's OK. There should still be plenty of gains to be had and less bear market to endure.

There’s a new paradigm to the cycles of the crypto market. Pinpointing this can be the difference between making it and the dreaded never making it. So let's try to do some pinpointing!

Whenever I'm trying to find insight into the future of the market I do two things: I look at the charts and ask myself, "if I were a big, fat crypto whale, what would I do in this situation."

So let's look at this from those perspectives.

Fractal Madness

TedTalksMacro dropped this fractal recently:

Oh save your groans. Things are still going to be awesome, just different. So, in the reality of this fractal, the Bitcoin local top will be in the 70s. That may seem depressing...until you realize it's just a bloated shitcoin. Things get better. I’ll explain.

Back to the fractal and look how well the run up of the two align! That similarity is striking, but we need more than one matching pattern to attach any significance.

After all, if you stare at charts long enough, you see fractals everywhere, theories start to emerge, days pass and then you're looking like this right before they put you in a straight jacket:

In this instance, we have more than one fractal we have many fractals and non-fractal evidence.

In early October, Ted offered up this fractal with the Bitcoin Dominance chart:

The timing of the calendar and the match of the set up are striking! This is the kind of thing I tend to look for in fractals to make them useful. Something to offer up the possible timing of how markets will move.

Using something like this as a baseline, it becomes easier to spot invalidations to my theories about market direction. This makes it easier to adapt.

An invalidation of the BTC.d fractal is our bloated shitcoin definitely doesn't seem headed towards market-wide, liquidity-sucking grab like we see on that chart. Let's dig more.

Instead of using the fractal from 2017 on BTC.d, let’s go from the February 2021 highs, like the first Bitcoin chart posted:

What grabbed my eyeballs on this is that it points to BTC.d dumping at the same time as the other fractal. Give me that glorious confluence! All of these fractals seem to support the idea of generous alt-coin pumps in that December/January timeframe.

Remember, Ethereum hit it's Spring high in April, a month after Bitcoin hit its Spring high. So if something like that first fractal plays out, that would place the Bitcoin winter high in late December and Ethereum to late January. Sweet, sweet confluence baby!

But we shouldn't just find similar patterns, expect that to play out and then pretend we're not being idiots. We need reasons why all of this could be happening. I’m like the whale of reasons here.

Reason Me, Crypto Hawk

First of all, it's not that hard to accept Bitcoin won't do multiples in the blink of an eye anymore, in fact, that's probably it's biggest selling point now. It is not as volatile as other crypto and offers massive liquidity! It's just harder to pump a $1 trillion asset.

So the fact that BTC has become Boomer Coin and doesn't do anything near as appealing as alts and NFTs and won't grab as much retail money because of that, is really just a secondary factor. Still, all valid factors pointing to a lengthening cycle, but let's look more macro.

Things got crazy coming out of the pandemic. At that point, it was probably silly to expect any cycle in any market to hold true. We had the epic crash, and then the epic money print.

Crypto actually lagged the recovery of the S&P 500 coming out of the crash. Below I have SPY vs. Total Crypto Market Cap chart, or the Crypto Dominance and Obliteration chart.

The S&P shouldn't be keeping up with a booming growth sector, but here we are. Since the pandemic, I don't believe the rise in the crypto market cap has been a product of the super cycle playing out, as much as it was just a natural reflection of the macro conditions.

As the crypto cap continues to outpace the boomer index, like we see in the chart, it will start to behave more like traditional markets. This will be especially true as regulation enters the crypto markets.

Which leads to our second area of focus!

Connecting To Our Whale Brain

If I'm a gigantic crypto whale who has had an unsupervised run of feasting off manipulations in the crypto market and I know that regulation is going to make that harder, I'm going to hurry up and get in all the manipulating in I can!

This isn't just about the regulation either. With the excessive money printing and the impending crashes it sets up down the road, big money is going into turbo mode to suck the little wealth retail has through daily expenses and the markets.

Robinhood is a great example. This platform makes it easy for anyone to invest and invest with leverage even. The more inexperienced traders in the market, the easier it is for those with the most money and experience to manipulate the markets. Not too mention, Robinhood blatantly shuts down in order to protect it's corporate backers.

y robinhoods not lemme buy gme!

Throw in access to more leverage and less oversight, and the crypto markets are going to be heavily manipulated!

Putting everything in this light, it becomes clear that the best way to suck retail into poverty is not through a super cycle, but a longer, drawn-out climb that includes viscous shake outs after every new high with a constant hunt for easy liquidations.

It doesn't take long tracking the open interest on Binance to realize liquidity hunts are going to prolong any parabolic moves on any coins dealing with leverage in it's books.

Given this viewpoint, cycles being longer with less blow-off tops is the only answer that has you sliding along the edge of Occam's razor. I like logic and probability. So I'm leaning on this!

How To Use Info To Make Moneys Get Bigger?

I'm using this info as a baseline to my plan of attack. I will look for invalidations from Bitcoin's price to gauge if it wants to not act like a bloated shitcoin and really pump.

Of course, I'm always watching overall markets and news from the Fed, FOMC etc, and waiting for Ted to tweet out the best data. Any investment plan is going to be rough when all markets flip bearish!

While this plans still looks to be valid, I'm using it to help me map out the coins I want to hold and when, and my level of aggression in the market.

For instance, recently I've been hedging and keeping stables on hand for dip opportunities. If I know the cycle is going to be longer, with more pullbacks, I will focus more on taking profits.

Just look at the Bitcoin chart for 2021. After every new high, aggressive pullback soon followed.

Abandoning the idea of a super-cycle with a blow-off top leaves me quicker to accept this, not give into greed and play the probability that we aren't going to straight to 250k BTC, but likely having some pullback.

On the other side, the same is true for big dips! Until I have invalidated this current plan, I'm not freaking out and selling bottoms thinking this is the end of the bull market.

Here's the really fun part of identifying possible patterns: we can use this to hunt for the coins that will go parabolic. Think of it like this:

That unassuming panda has been killing market sentiment all run, and raises a great point.

With more coins and more options, everything isn't going to pump at once. This will be a longer process and that means we will have the chance to catch more pumps.

Money moves through crypto, pumping up different sectors. You get meme mania, dino coins, nfts, metaverse, DeFi, 4 IR and more. Every day it seems like there is a new sector to get pumped and dumped in crypto! Remember, trend is your friend, and if you ride the trends in crypto, you will do alright.

Follow me and/or hit me up with suggestions for ideas on where money is flowing to next. I am going to looking to follow trends and track signs of invalidation for the roadmap the current signs seem to be creating.