After one of the worst declines in Bitcoin history, many wonder if the crypto market has peaked. Time and time again, market fears have hit the market, and the extreme panic has negatively impacted some holders afterwards. Many retail investors panicked and sold off digital assets in their hands.
The situation seemed to suggest that the January 2018 crash had started again, and some started talking about a new bear market having arrived.
For months, the crypto space around Bitcoin has been dominated by bullish sentiment surrounding market adoption. Bitcoin is stealing the shine of gold as a value savings. “Only up” is not just a MeMe, but also a belief until the moment the price falls below every key support.
Although Bitcoin’s plunge came out of nowhere, there are actually a number of experts who have interpreted and predicted the unusual signs and indicators for Bitcoin. Anonymous analyst John Nash has been studying this phenomenon for some time and has come up with an interesting theory.
Nash looks back at the previous cycle of Bitcoin to counter the fictional “moonshine” of investors who hold an eternal “up” sentiment. As the chart below shows, every bitcoin volatility since 2021 has had one common feature: they tend to be longer and have a lower return on investment (ROI) than their predecessors.
Bitcoin’s first cycle began in 2011 and lasted 8 months. During that time, the price of bitcoin rose from $1 to about $10. The second cycle started somewhere in 2013 and lasted for about 7 months and reached two different peaks at the end of that year and in 2014.
Bitcoin’s third cycle was the longest to date, lasting 35 months, and the current cycle has been extended by 28 months, with analysts backing it up by saying.
“The cycle is significantly longer and the ROI is significantly lower (the law of diminishing returns). Whoever still believes in the 4-year cycle and constant ROI is clearly in denial or delusional.”
Based on the chart provided by the analyst, he suggests 3 possible scenarios: a peak in Bitcoin’s current cycle by the summer of 2022, and if it follows the same length as the previous cycle, an extension of the cycle to October 2022.
Finally, the least likely and most optimistic scenario is that the cycle will peak by December 2021. Based on the previous arguments, it can be assumed that the shorter the cycle, the more explosive the ROI will be, and if this happens, Bitcoin could see a huge increase.
On the other hand, this analyst warns investors that this could be powerfully attractive to new users and equally dangerous if followed blindly. According to Metcalfe’s Law, which describes the adoption curve of new technologies, “Nash” concludes the following.
Bitcoin has more or less followed the adoption curve/Metcalfe’s Law over the past decade, but Bitcoin has a unique characteristic. Because Bitcoin’s network growth is expressed directly in terms of monetary value, it is prone to speculation, or what we often call a bubble.
The true bottom and top of bitcoin can be determined using the logarithmic growth curve (LGC), and when the curve starts to flatten, fewer users will enter the network, which will be accompanied by more expiration dates (time) and less volatility in the bitcoin price.
The analyst rejects the model that the bitcoin price will appreciate indefinitely, arguing that the bitcoin cycle has not shown any signs of being able to outperform its previous overexpansion.
In other words, Bitcoin is unlikely to reach unprecedentedly high prices if the percentage of growth is higher than it was in 2017. At that time, BTC increased by 1,900% from $1,000 to $20,000.
In this cycle, then, a rise in the cryptocurrency from $10,000 to $100,000 would imply a 900% increase, which still seems like a reasonable extrapolation based on this theory.
With a current price of $36,112, Bitcoin has lost money in all time frames, and at the time of writing, monthly volatility has been most affected by the market, losing 37.3%.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/looking-at-historical-data-when-exactly-does-the-current-bitcoin-cycle-end/
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