Bitcoin Made History, But Where is the Potential Cycle Top? Analyzing CRYPTOCAP
This week, Bitcoin made history, smashing $100,000 for the first time in its history. This magical number might have created a mental shift in non-believers; more significantly institutions and corporate funds.
However, where do we go from here? The fear of the bear season can create PSTD for crypto enthusiasts and investors who could be stuck in the market waiting for unrealistic gains. It’s important to understand at what stage of the market we’re at, and adjust your sails accordingly, if need be.
In today’s newsletter, I’ve analyzed the potential cycle top using a single metric that looks simple yet tells a robust story: The crypto total market cap chart:
Since 2017, the total cryptocurrency market cap (TOTAL) has followed a well-defined ascending channel. In December 2022, the market found support at a previous macro resistance level—the very same ascending triangle that marked its breakout in January 2021.
This breakout sparked a bull rally, moving the crypto market cap by 310% before the market hit the ceiling of the ascending channel. Fast forward to today, the crypto market cap is on the brink of another breakout from a cyclical ascending triangle, mirroring the setup seen in 2021. If history repeats itself, we could see this breakout fully materialize by January 2025, potentially signaling another major bull peak year.
The traditional four-year cycle—2017, 2021, 2025—suggests a pattern of explosive market movements. If this chart holds true, the total crypto market cap could surge to around $12.68 trillion (the highest red line), measured by the distance between the last bull peak and the bottom in December 2022.
While significant, it would still fall short of gold’s market cap, estimated to be around $17.68 trillion in 2024. It’s also worth noting that the broader traditional finance market, including stocks, bonds, and other financial instruments, far exceeds the market cap of gold—stocks alone surpassing $110 trillion.
From my chart above, the market is expected to gain $9.67 trillion from the current ascending triangle breakout. If, however, you choose a conservative approach by halving this figure, this would place your potential exit point at $7.85 trillion (yellow line).
Additionally, on RSI, I’ve marked out an area to look out for (red line 87), based on previous cycle tops.
Despite these bullish projections, now may not be the time to go all-in. A seasonal pullback—likely during the festive period—could present a more strategic opportunity to accumulate positions ahead of the new year.
Barring any unforeseen events, such as a black swan event or geopolitical instability, the $12.68 trillion target seems achievable by 2025. Keep an eye out for key technical indicators as we approach this critical phase in the market cycle.
When in doubt, feel free to revisit this article!
Awesome analysis 👏🏼