Bitcoin Bubble Burst & 40-Year Cycle Reset: Ultimate Plunge to/below ~13,800/BT Likely!
07/06/22 Weekly Re-Lay Alert – 40-Year Cycle Reset; Phase VIII Begins – “While an intra-week Alert is not normally the place for discussing multi-decade cycles (and this one will be brief), there are times when it is important to distinguish the forest from the trees. No time is more critical for that undertaking than the onset of a new major cycle.
Since 2012/2013, our publications have described the 40-Year Cycle of Currency Wars and what that would likely mean for 2016 – 2021 – the culmination of the latest phase (VII) of that cycle in America.
One of the primary conclusions – described in publications, podcasts, books and interviews since 2015 – was that ‘anti-Dollar’ currencies would see surges from 2016 into late-2020/early-2021. At first, the focus was on Gold but Bitcoin and cryptocurrency soon took center stage. Both were forecast to culminate their multi-year advances with accelerated or parabolic rallies into 2021.
As Gold was fulfilling that outlook and Bitcoin was poised for a final culminating rally (leading into cycle highs in Nov/Dec ’21), the May ’21 INSIIDE Track and ensuing publications reiterated this conclusion:
4-29-21 – “The markets have entered a momentous time when 5 – 10-year trends and shifts were projected to culminate, 40-year cycles and trends were projected to shift and larger-degree cycles – like the 80-Year Cycle of War – were projected to enter a new and decisive phase.”
5-27-21 – “The first five months of 2021 have powerfully reinforced the perspective on the current phase of ‘Currency Wars’ and the ongoing forecast – since 2015/2016 – that Gold and other anti-Dollar vehicles would move higher into 2021 (with accelerated advances projected for 3Q ‘20 – 2Q ‘21) as the Dollar corrected into 2021. At that point, the US Dollar was/is expected to set a multi-year low while Gold, Bitcoin, et al were forecast to set multi-year peaks.”
Bitcoin reinforced that in May/June ’21, when it retraced to and bottomed right at decisive wave support (~29,000/BT) while maintaining its weekly & monthly uptrends. That projected a final surge into a ~4-Year low (‘09) – high (Nov/Dec ’13) – high (Nov/ Dec ’17) – high (Nov/Dec ’21) Cycle Progression.
At the same time, the Dollar was signaling a bottom but would need to build a base with a series of ‘1-2’ waves (initial rally followed by partial pullback… on multiple levels) before being primed for an accelerated advance in late-‘21 through mid-’22.
That is when – as described in the Axiom on Market Correlation – the Dollar would be entering a more extreme move and related markets (cryptos & metals in this case) would be more likely to follow a standard inverse correlation and move in closer sync to the Dollar (in the opposite direction).
All of this was part of a 2 – 3 year ‘reset’, when the culmination of one cycle gave way to convincing reactions (similar to how a 2 – 3 week reactive sell-off usually follows the culmination of an initial weekly impulse wave) in most markets.
That 2 – 3 year period was/is from 2021 – 2023 when the US Dollar was forecast to undergo a major wave ‘5’ rally as the bubble in Bitcoin was poised to burst.
Equity markets were projected to go through a topping phase between May ’21 and Jan ’22 before a major sell-off became likely… one that could stretch into/through 2023 (in phases).
Gold & Silver were forecast to set multi-year highs in late-2020/early-2021 as markets like grains were forecast to experience a 3-year period of accelerated surges – first in Soybeans (2020), then Corn & Wheat (2021), and then in Soybeans again (2022).
All of this enables these markets to reset and then determine if those previous 5 – 10 year trends are able to re-emerge.
In the case of Bitcoin and cryptos, a bursting bubble – in which Bitcoin is expected to lose ~80% of its peak value – does NOT mean that there is no future for digital currency. Quite the opposite!
Tech stocks in 2000/2001 are a perfect parallel that I have cited numerous times as Bitcoin’s parabolic rise was maturing. At the time, the dot-com bubble had prematurely taken tech stocks to astronomical levels on little more than ‘a wing and a prayer’.
When reality set in, the Nasdaq 100 gave back 17 months of gains in the ensuing 18 months. It was a clear squaring of price and time with a 100% retracement in price and time.
In the case of Bitcoin, most of its unrealistic gains occurred from Nov ’20 into Apr ’21 (~5 months) – when it surged from ~13,300 to ~65,000, a 500% jump. Within 7 months of its Nov ’21 peak, Bitcoin had burst much of that bubble and could now spend many months attempting to form a bottom.
If it can spike down to that ~13,300/BT starting point (‘start of the extension’ is an Elliott Wave retracement target following a parabolic advance), Bitcoin would fulfill the 80/20 Rule of Bubbles – where a bubble gives back roughly 80% of its value and drops to a level that is ~20% of its peak price – and have reset the entire market. In prior bubbles:
Japanese stocks peaked in 1989.
The dot.com bubble peaked in early-2000.
The XAU bubble peaked in late-2010 – almost 11 years later (Solar Cycle correlation??).
And, the Bitcoin bubble peaked in late-2021 – almost 11 years later.
The first three gave back 80% of their peak value and Bitcoin is on track to be the fourth!
Meanwhile, the market(s) that normally waits until last to finally give up unjustified gains is also going through a violent ‘reset’ – plunging in the first half of 2022…
Stock Indices are slowly validating signs of bottoming (in mid-June), after spiking to new lows and 6 – 12 month downside targets… Several individual stocks, normally viewed as ‘proxy stocks’ (MSFT, NFLX, AMZN, GOOGL, SBUX), bottomed in May and set higher lows in June – preparing for stronger rallies in July. Like the overall NQ-100, those stocks previously peaked in Nov ’21 – while fulfilling major upside price and wave targets and multi-month cycles – and led the way lower.
Bitcoin remains negative until a daily close above 23,000/BTU.”
Bitcoin, in Nov ’21, fulfilled what its monthly and weekly trend indicators projected and what its overall wave structure necessitated – a surge to new all-time highs (~66,000+/BT) ushering in a major top in late-Oct/early-Nov ‘21. That also fulfilled the multi-year outlook for a major advance into 2021 when Currency War Cycles culminated.
Since then, Bitcoin has been projected to plunge into Sept ’22 – when monthly cycles project the next major low. Its 1 – 2 year downside target remains at 13,800/BT!
What does this mean for the future of cryptos?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.