Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin. The four-year cycle strikes again.
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Now, the four-year cycle is and has been a heavily debated topic in in Bitcoin. What I find fascinating in general is that a lot of the people that sort of mock the four-year cycle for the last eight months or mocked it eight months ago continue to mock it. And sometimes I find I find it very interesting. So I'm like, well, what would convince them? But here's the thing. I've been in that I've been in that position before because I didn't always believe in it either, believe it or not. Right?
What I would say is this. When you're wrong about something, like we all are at various points in our investing career, when you're wrong about something, the temptation to want to mock the thing that is proving you wrong is very, very high because the alternative of admitting you are wrong feels almost, you know, insurmountable, right? Like it the idea of saying the words like I'm wrong about this for a lot of people it just simply doesn't compute. They don't want to do that and so they kind of double down and and and then they just start getting mad. But here's the thing that we all should learn as as investors and I've had to learn this as well is that we're all going to get things wrong and you shouldn't let one wrong call define you. You know, just admit your mistake. Admit mistakes and move on like I've had to do many, many times.
So, I see what people are doing with the four-year cycle and and kind of now they're mocking it. Now, they're saying, well, you know, there's no reason to buy Bitcoin if it just follows something as simple as a four-year cycle. But one of the biggest rebuttals I would have to that is investing in the stock market has been a great idea for for you know a long time decades decades and decades like forever basically. And yet there's also a a 4-year cadence to the stock market as well. And you know imagine if you told someone that the stock market was a bad investment because it bottoms approximately every four years. Like the idea would seem kind of absurd, right? Like why why can you not buy something just because it bottoms approximately every four years. That doesn't mean anything like it that it's kind of a silly idea to think that that that Bitcoin will somehow be immune to bare markets just because it's a good asset. I mean all assets go through bare markets doesn't matter how good they are because you go through times of you know over gross speculation and then you have fear and and doubt take over for long periods of time then you go to lower valuations than than what makes sense.
So, I somewhat empathize with those guys, but I would also implore them to make the adjustment and and and figure out where they made the mistake so that they don't make the same mistake in the future. That's the worst thing is if you do make a mistake and you're not you're not allowing yourself to be wrong in your own mind, then you're more likely to make the same mistake again. Whereas, if you can tell yourself you were wrong about that, then it helps you make a better decision next time. So that's where I I I just wanted to say that before we get really into the video because I've seen a lot of a lot of people kind of go through that.
So right now Bitcoin is sitting at around 63 64K and the reason why the video title is that the 4-year cycle strikes again. We've been covering this like all year and and and how similar this stuff is. And I know it's easy to mock it and it's easy to be like well you know you're just using three data points. But the counter view that the the critics will then say is that like, oh well, the last time Bitcoin did this in 2013, it rallied like 500%. So, we don't have a lot of data. We can admit that. We're just doing the best we can. And one of the things I would say is that everything that's played out this year is essentially a a less volatile version of what happened in 2018. And and I know like people can look at this and say, well, it's easy now. Uh but but we've been saying it all year, right? I mean, look at this. You had a low in February of 2018, and then you had a low in February 2026, and then you had a higher low in late March, early April, and then a higher low in late March, early April of 2026, and then Bitcoin rallied to the 200 day moving average or the bare market resistance band in 2018, in May, and and it did the same thing in 2026, right? Like it's it's the same thing. And then after all that played out, Bitcoin then swept the February low in June, which is what it just did again. And look, when Bitcoin started to get a counter trend rally, it was in early July and then like the second to third week of July, Bitcoin got a pullback and then got a larger move back up in into late July and then it gave it all back in August. So it it's hard. I mean like it just seems like the four-year strike sex again. Not only did Bitcoin find a low at around the same time late June, early July, which again you could say is coincidental, but the low price that formed the local low was 57,000. And in 2018, I mean, what was it? Guess in 2018 it was 5700. It's just a pattern, guys. Like, I mean, it's just a pattern. It's the same pattern over and over again. Like, what are the chances that in in 2018, Bitcoin would find a low in February, higher low in late March, early April, lower high in May, sweep the low in June, and the low in June happened to be 5,700. And then in 2026, it does the same thing. A low in February, a higher low in late March, early April, a lower high in May at the 200 day moving average. You sweep the low in June, you sweep the February low in June, and then it just happens to be 57,000, 10x what it was in 2018.
I'm not suggesting that it's going to always play out the same way. I think it will take a detour. But the detour I think it's going to take, I want to I want to explain right now. If you look at the year-to- date ROI of Bitcoin in 2026 and compared to 2018, you can see how the lows are aligning, right? Your February low, your higher low in in late March, early April, right? You can see that. You can pretty clearly see that your higher low here, your lower high in May, your lower low in June, and then you get this, look at this low right here that forms. It's the same day, right? The last day of June, the last day of June, you get a rally on up. You get a brief pullback into like mid July, probably around the release of the inflation report. And then you get a larger move up. Maybe we get a larger move up because the catalyst that caused inflation, the inflation spike to begin with, oil and the geopolitical crisis, maybe that's no longer a catalyst and and then Bitcoin could rally on that later in the year. But the thing is is like Bitcoin could go all the way back up to the 200 day moving average and it still hasn't broken anything that it did in 2018.
I'm not suggesting that you can't buy Bitcoin now, right? I mean, normally the best strategy is to just DCA Bitcoin in the second half of midterm years. And given the fact that Bitcoin found a new low on July 1st, I would say that was pretty good a pretty good view to say, look, ignore Bitcoin for the first half of the midterm year and then just kind of DCA in the second half of the year if you want a position and hope it works out. Yes, Bitcoin could go lower later in the year, but look at this. You see how it would rally up to that 200 day moving average in like late July, early August. Maybe it does the same thing by picking some up at least you're not sitting there wondering if you missed the low, but if you, you know, if you pick a little bit up, you're still probably hoping that eventually it comes back down to earth, so you can load up even more.
So again, you know, the the the critics have access to the same charts that I have access to. They just weren't willing to to call for this stuff, right? They were unwilling to say that Bitcoin would would drop back down because they were too busy finding relationships between like the ISM and and the money supply. Stuff that didn't really matter for for Bitcoin this year. And and I pointed that out at the beginning of the year as well. In 2014, Bitcoin went down, the ISM went up. And in 2015, the ISM went down and Bitcoin went up. Right? So, you can't always look for soft macro data to support a bold or bare thesis for Bitcoin. The 4-year cycle has continued to play out.
Where I think this will eventually deviate is I think Bitcoin will likely form a low before December because in 2018 it took until December to form the low. So, people keep saying like, well, you know, it has to be different. They're right. I think they're right. Like I think it will be different, but I think it'll be different because Bitcoin will probably break below these, you know, below um this this pattern before November. And the reason I think it could happen as early as October is because the top was in October and and normally the Bitcoin bare markets are about one year. Now there is an exception. Um the one in 2014 was a little longer than a year. So it it is possible that Bitcoin could bottom later in Q4. You know, it could be December. But I think October has to be a candidate month for a low. And if that's the case, then it would take a detour from that. It's just remarkable. I mean, it it 2026 has just been a less volatile version of 2018. And one of the reasons it's been a less volatile version is because in 2018, we had a euphoric top. Imagine how you would feel right now if the top had been at 200K rather than 126. Because think about it, I mean in 2018 the top was about 20K and then the lows we were forming through the year were 6K. This time the top was 126 or so and then the lows were forming at 60. So the reason this feels a lot worse is because we didn't get that final rally up to 120 where you had a rotation into altcoins. That's the reason it feels worse. We didn't get that. Instead, it came down and and you you basically bottom on or you topped on apathy rather than euphoria where there's no rotation. But other than that, everything continues to play out.
The way I like to think about it is like windows of strength and windows of weakness. And usually July provides a brief window of strength in in the midst of a larger window of weakness. We did a video on this a few months ago, a couple months ago, saying that look, mid like miday to like the end of June is a is a window of weakness. Now July is often a window of strength. There can still be a little bit of a pullback that forms a higher low, but that's when that window of strength is usually occurs in midterm years. Uh could be around that July time frame, but then usually we just give it back into August and September and perhaps we'll put that final low in October. So, I would argue that the four-year cycle, the four-year cycle strikes again. And the four-year cycle doesn't mean down only, right? It means that there's this like there's this cadence to when the lows occur. And and you know, I think the biggest critics of the four-year cycle so far this year uh have used every counter trend rally to dunk on anyone calling for the four-year cycle. And then when when the four-year cycle then continues to play out, um you know, they then go ad hominin and and stop attacking the the narrative and attack the person. But I would implore all of them to just look at the charts and look at the data and say, "Look, this is what the charts have told us for a long time. I don't have any, you know, it's not like I feel like, it's not like I intrinsically think that it should play out like this, right? It's not like I think I don't know why I want to make it more complicated than it has to be, or at least I used to, but then eventually you're like, what's the point? What's the point of deriving all these like macro relationships and stuff when it just keeps playing out in in a fairly fairly predictable way? And at some point, the four-year cycle will break probably. And when it does, I will change my strategy. But until that time, I think you defer to the four-year cycle. You look for you look for those windows of strength. You look for the windows of weakness. The four-year cycle would say that a low in in the markets would occur in in the second half of midterm years. Um, more than likely, and and that's what I'm going to stick with.
But those are my views. Thank you guys for tuning in. Subscribe, give the video a thumbs up, check out the sale on ITC Premium. Uh, but most importantly, I'd love to see a lot of you guys at the conference. So, please check it out if you're interested. Um, we have it in Miami November 21st. The whole thing will be the 20th through the 22nd, but the main conference day uh is the 21st. So, hope to see you guys there. I'll see you guys next time. Bye.