This declining bitcoin cycle is exactly what's needed.

Hey friend,

I would appear we are in the midst of a declining 60 day ‘daily’ cycle. It’s what was expected, it’s not ‘random’ and whilst nobody knows what the macro events will do to daily price action, on the whole bitcoin cycles are actually quite predictable. More about that later.

The read at this point is that this cycle culminates in late February and then we begin a new cycle. If the prices bottom out it acts as a reset in sentiment and a platform to grow again. Remember bitcoin had a 105% increase in November, it’s normal that a few months of sideways and declining action follow to build a base for the next move. I wouldn’t be surprised if price drops 10% further from here.

And that’s a good thing. We need that to happen to get the next big move and the alt coins to follow.

Understanding Bitcoin Cycles

Cycles govern everything, nature, human behaviour, and financial markets. Bitcoin, like all major assets, follows cyclical patterns influenced by macroeconomic forces and investor psychology. To stay ahead in this space, we need to study these cycles and how they impact Bitcoin’s price over different timeframes.

Cycles function like waves, rising, peaking, then falling before repeating. No two cycles are identical, but patterns emerge. The four year halving cycle is Bitcoin’s most recognised macro trend, driving its long term price movements. Within this, smaller cycles, monthly, weekly, and even daily, play out.

Key Timeframes: Daily to Multi Year Cycles

Bitcoin moves across multiple time horizons:

• Daily Cycles (roughly 60 days): Short term price fluctuations driven by sentiment and liquidity.

• Investor Cycles (16 to 24 weeks): Mid term trends offering a clearer market direction.

• Four Year Halving Cycle: The fundamental driver of Bitcoin’s long term market structure.

The Influence of Dominant Cycles

Shorter cycles exist within broader ones. In bull markets, corrections are typically short lived, while in bear markets, upward movements tend to be weak. Recognising dominant cycles helps traders and investors avoid emotional reactions and make informed decisions.

Identifying Key Cycle Points

To maximise opportunities, investors track:

• Cycle Low (CL) – The point where price resets before the next leg up.

• Investor Cycle Low (ICL) – Major market resets that present prime buying opportunities.

• Swing Lows and Highs – Indicators of trend reversals and momentum shifts.

Right vs. Left Translated Cycles

• Right Translated Cycles (bullish): More time spent rising than falling, signalling strength.

• Left Translated Cycles (bearish): Quick spikes followed by longer declines, indicating weakness. If Bitcoin consistently experiences left translated cycles, it suggests a larger downturn.

The Four Phases of Bitcoin Cycles

Phase 1: Accumulation

This is the phase where Bitcoin is relatively cheap, but the early signs of recovery begin to emerge. Savvy investors take advantage of lower prices, stacking up while sentiment remains bearish. Volume is typically low, and prices move within a tight range, creating the best buying opportunities before the next major cycle begins.

Phase 2: Growth

As the price starts its upward trajectory, Bitcoin pushes towards its previous all time highs. Historically, halving events align with this phase, reducing new supply while demand steadily increases. Exchange reserves decline as investors buy and hold, anticipating a strong bull market.

Phase 3: Bubble

Once Bitcoin surpasses its prior all time high, FOMO kicks in, driving exponential price growth. The market enters full euphoria, leading to rapid price increases, often followed by short term corrections. While some investors start taking profits, others continue buying, convinced the rally will never end. Market confidence is at its peak, with extreme greed dominating sentiment.

Phase 4: Crash

After the euphoria fades, reality sets in. Bitcoin experiences a steep correction, often seeing an 80% drawdown from its peak. This phase marks the true bear market, lasting for approximately a year, shaking out weak hands before the cycle resets. The most recent example saw Bitcoin drop from $69,000 in November 2021 to $15,476 in November 2022.

You can see these phases playing out in the graph below from Caleb and Brown.

Why Bitcoin Cycles Matter

Mastering Bitcoin cycles allows you to anticipate market movements rather than react emotionally. Buying at cycle lows and taking profits near cycle highs improves long term returns.

The Big Picture: A Wealth Building Opportunity

Bitcoin’s four year cycle has historically created enormous wealth for those who understand it. As we approach the next major cycle, those who recognise its patterns will be best positioned to benefit.

The real question is, will you be among them?

That’s all for this week,

Brendan. Xx