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Broken bitcoin, a falling red graph against a blurred blue background. Concept of cryptocurrency ... [+] bubble. Toned image double exposure
This is the third crypto cycle I’ve written about here on Forbes. So far, as you can verify, I’ve consistently been a bull at the bottom and a bear near the top. The thesis has been straightforward: bitcoin drives the entire crypto market, and the “halvening” event drives bitcoin’s price. Simply put, bitcoin’s price roughly doubles because the halvening cuts new bitcoin issuance in half. There’s always plenty of narrative and hype – lots of “blah, blah” – to make the rises seem more romantic or complicated, but my simple theory has yielded enough returns for me to ignore the noise.
This supply cut creates a boom-and-bust cycle: BTC rockets upward and then crashes just as swiftly. So far, this simple logic has been all I’ve needed to consider.
The bitcoin chart shows the boom-bust cycles
Credit: ADVFN
In this chart, you can clearly see the cycles and their progression. The circled areas represent the price levels I anticipate bitcoin might fall to; the higher values represent what I believe are more likely targets. A drop below $30,000 seems unlikely, although it’s hard to judge in these hyper-volatile times.
This cycle isn’t destiny. As the 2021 cycle showed, events can intervene and disrupt the expected pattern. It’s important to recall that bitcoin serves as a flight-to-safety asset – when a country faces turmoil, wealthy individuals often buy crypto to move their assets without baggage or scrutiny. Bitcoin has become the ideal way to transfer large amounts of capital discreetly now that cash is increasingly problematic.
However, I don’t trade on hope or “hodl and pray,” even if geopolitical events appear imminent. As we saw after the Afghanistan withdrawal in 2021, once that bitcoin rally ended, crypto fell back to the predictable lows associated with the halvening cycle.
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