Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin dubious speculation.
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So, Bitcoin continues to mostly trade downwards, heading what is likely to the bull market support band, a combination of the 20-week SMA and 21-week EMA. I still expect the visit to the bull market support band to occur in the coming weeks, but I would also argue that Bitcoin will likely find some type of a low in September. Okay, I I think that Bitcoin will find some type of a low in the month of September. The only question that we have to ask ourselves is, does the low occur at the bull market support band, or does it occur at the 50-week moving average?
Now, at the end of the day, you know, there's always a chance that it's just down from here and that's it. But that's not really, you know, the the primary outcome so long as Bitcoin has weekly closes above its 50-week moving average. Historically, all prior Bitcoin market cycles were not over until after we had weekly closes below the 50-week moving average. You can see that it took until we got weekly closes below it in 2022 to confirm the cycle was over, and again in 2018, and again in 2014. Notice that all of these weekly closes below the 50-week SMA occurred either late post-halving year, or you know, sometime in the midterm year. Right, this one technically may have been 2021, very late 2021.
So, ultimately, the question is, first of all, I mean, obviously everyone wants to know, is the cycle over? If you look at at the ROI from the low, uh, as measured from the bottom, you know, it would still suggest that there's more room for Bitcoin to run. However, we also know that that often times Bitcoin finds a low sometime in September. There's been a lot of parallels with this cycle and the 2016-2017 cycle. And one of the things to note, in fact, in the 2017 cycle is that Bitcoin found a high in the summer, right, in like June or late May, early June, and then another high in August, right? So then if you look over here, you can kind of see the same thing, right? A high in late May, and then another high in August. So that seems to be playing out in a very similar fashion, right? You have a high kind of late spring, early summer, and then another local high in August, and then you go back down to test the bull market support band, and then you go off on your way.
Now, one thing that's interesting is that in 2017, Bitcoin wasn't really tagging the 50-week moving average at all, right? You can see that, in fact, it was actually the bull market support band back then. Bitcoin consistently held above its bull market support band in that cycle. But in this cycle, we've actually had several drops briefly below it, but you can see that every single time it dropped below it, it still held above the 50-week moving average.
So, I also anticipate a surge of Bitcoin dominance in September and October. Now, a lot of times when when people ask if dominance goes up, does it go up on a Bitcoin rally or a Bitcoin dump? Usually the answer is yes, because it does so on on both occasions. But the thing to consider is, if Bitcoin finds support at the 20-week moving average and starts going back up, remember Bitcoin leads the bull market. So, if it finds support at the 20-week moving average, you will likely see a rotation from altcoins back into Bitcoin because when Bitcoin starts to move aggressively and head toward new all-time highs, people don't want to miss that. They FOMO back into Bitcoin, and then Bitcoin dominance goes back up.
The alternative is that if Bitcoin does not hold support and instead, say, drops to its 50-week moving average like it did earlier this year and a couple other times in this cycle, then you would also likely see altcoins drop against Bitcoin because at that point, people would start to worry, you know, if that's it, um, and and will it actually hold the 50-week moving average? And so you might see a short-term loss of confidence in altcoins if Bitcoin is unable to hold its 20-week moving average.
If you actually look at this chart and you overlay Bitcoin dominance on the chart, let's actually switch this to a new scale so we can see it a little bit easier. But one of the things you may note is that when Bitcoin drops below the 20-week moving average and then spends some time there, you'll also see Bitcoin dominance go up a lot.
So, what I would what I would encourage people to think about, and and again, it's dubious speculation, right? No one actually knows, but what I'm thinking right now is that Bitcoin finds a low, probably in September. It's possible it could wait until, uh, a little bit later. I think technically in, um, in the 2013 cycle, the low occurred like the last week of September, but I'm not really, I can't remember if it was actually in September or if it was, uh, in early October. Let's zoom in and and we can see it looked like it was like October 2nd. So, I would say, you know, Bitcoin will find a low, more than likely a local low, sometime within the next several weeks, more than likely in September, but it could always bleed into early October, um, before then moving back up. And when that happens in September and October, I would anticipate a strong reversal by Bitcoin dominance.
So, it could, you know, for Bitcoin, it'll look something like this, right? Either consolidate here for a little bit and then go up, or just drop, draw right down to the 50-week moving average and then try to go back up. If you look at 2020, when Bitcoin fell back to the 20-week SMA after following a very similar pattern, like a capitulation low in 2020, just like we did here in 2025, and then a big move up, and then sideways until the bull market caught up, but then it didn't actually tag it, and then it went up sideways, and then back down to it, and then consolidated there in the month of September. So that's the more bullish case that Bitcoin would just consolidate at that 20-week moving average in September. Um, a slightly more bearish case is it goes to the 50-week SMA and then bounces, right? So you could see either one of those two things play out.
But again, you know, if you look at at Bitcoin dominance, what you'll notice is that in 2020, dominance really started to to to sort of bottom out as Bitcoin got to that 20-week moving average. And then as Bitcoin started to go back up, dominance just shot back up, and it actually went to a new cycle high. So my expectation right now is, uh, that liquidity will flow back to the king in September and October. Um, hopefully Bitcoin holds the bull market support band as support. But if it doesn't and it drops to the 50-week moving average instead, uh, like it has a few times this cycle, it would likely lead to a larger drop by by the altcoin market. And then assuming that the cycle top is not in and we do get a final rally into Q4, then whatever the low, wherever that low is theoretically in September, that will likely mark the last major low before the market cycle top in 2017. And you can see that the low, the September low was the last, you know, time that Bitcoin even tested its 20-week SMA until the cycle was over, right? It didn't test the 20-week SMA again until January.
Now, maybe this is not the 20-week SMA cycle to watch. Maybe this is more so the 50-week moving average. So, I mean, it could always do one of two things, right? It could go here, consolidate, and then go, or go down here and then get, get a big move up. Either way, you're probably not going to, um, you probably will see Bitcoin dominance go up, uh, in the month of September and also likely October.
So, that's the dubious speculation for the day. I, as far as, you know, as far as the high in August, I think the the local high in August is in. Best case scenario that I could see is is just, uh, before tagging the 20-week SMA. Best case is maybe we get lucky and Bitcoin rallies back up to the 50-day moving average. You can see that it's done that a few times after falling below it. Um, but ultimately, it should check in with a bull market band sometime in September. If it goes to the 50-week, alts will get wind. Uh, and then Bitcoin will then suck that liquidity back up to then try and go higher again in October.
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