The Halving Cycle Theory and Its Implications
On September 8, a technical analyst known as “CryptoCon” presented a theory that revolves around the date November 28, suggesting it as a critical point in Bitcoin’s market cycle. According to the analyst, this model has been consistent since the inception of Bitcoin’s price history, which dates back to mid-July 2010. The theory is primarily based on the dates of the first two Bitcoin halvings: November 28, 2012, and July 9, 2016. CryptoCon suggests that “4-year cycles are extracted from November 28th, and July 9th marks intra-cycle milestones.”
Diving Deeper into Market Cycles
The theory breaks down the four years of each Bitcoin cycle into different phases: accumulation, fair value and preparation establishment, bull market and new peak, and finally, the bear market. According to this model, each cycle has shown significant activity around 21 days before or after November 28. Future predictions based on this theory forecast that Bitcoin will reach its next early top 21 days before or after July 9, 2024, and the next cycle top will occur 21 days before or after November 28, 2025.
A Skeptical Perspective on the Theory
From my point of view, while the theory presented by CryptoCon is intriguing, it’s essential to consider other perspectives. For instance, another industry observer, “Pledditor,” argues that Bitcoin’s four-year cycles are mere coincidences and have little to do with the halvings. Instead, they suggest that these cycles are more closely correlated with fluctuations in the global M2 money supply. The M2 money supply includes various forms of money, such as cash, currency, and relatively liquid bank and money market mutual fund deposits.
Pros:
- The theory provides a structured framework for understanding Bitcoin’s price movements.
- It offers actionable insights for traders and investors.
Cons:
- The theory may oversimplify complex market dynamics.
- It could potentially lead to false confidence in predicting future price movements.
Current Market Status
As of the time of writing, Bitcoin is in a “cooling bear market phase,” according to CryptoCon’s theory. The asset was trading at $26,221, showing a marginal 1.8% gain over the past 24 hours. However, this move is minor as Bitcoin remains in consolidation around the $26K zone.
In conclusion, while theories like the one presented by CryptoCon offer an organized way to understand market cycles, it’s crucial to approach them with a balanced perspective. Market dynamics are influenced by a myriad of factors, and relying solely on a single theory could be risky.
