Nothing We Have Not Seen Before

Hello followers of the four-year journey. This is Bob Lucas here on February 26, 2025, with another installment of the 4-year journey. I hope you've all been well and had a great holiday period. Thanks for tuning back in.

I do apologize that it's been over 3 months since the last video. To be honest with you, I hadn't seen any real need to do another video up until, I guess, last week—certainly the last few days—with a breakdown in Bitcoin's price. We're certainly feeling the shift in sentiment here, as a lot of people are beginning to fear a top, a major top in the Bitcoin cycle. So, a lot of this video is going to talk about the ebb and flow between fear and euphoria.

I want to spend some time actually talking a little bit about altcoins—not going over alt charts, but just talking about altcoins and how I think they're mostly dead. There isn't a retail case; there isn't a retail flow. But that's all altcoin talk. For Bitcoin, I think we want to talk a little bit about the decoupling of Bitcoin as an asset class to crypto as a whole. I know Maxis, or Bitcoin-only folks, have always viewed it like that, but the market hasn't, up until I think this cycle. We'll talk a little bit about that. Then I'll get into the bull phase, where I do believe this 4-year cycle is still tracking well and is on track for an expansion or a continuation higher in this 4-year cycle. And then lastly, I'll cover the model portfolio. I have some targets added; now we're looking to start to unwind a lot of the position, of course assuming that we get another leg, a big leg higher in this 4-year cycle, and begin to start looking at taking profit in that 4-year cycle.

Um, if you like these videos—they only come out every couple of months or so, where there's a need—I do post three times per week on bitcoinlive.com, which is a site on Bitcoin analysis and altcoin analysis. That is in the link or in the comment section below if you're interested. So let's get stuck into the video again. Thanks for being here.

So, as I record this video, Bitcoin's at 87,000, down from an all-time high of around 110,000—so about a 22% drawdown as I record. Which, historically, even for this 4-year cycle, is basically right on the averages for this cycle—around the 20% drawdown from a high. And in prior 4-year cycles, we would see 30% to 40% drawdowns in the rising portion of a bull market consistently. And that was pretty much the nature of Bitcoin. This chart here is a simple illustration of, for example, a couple of intertwined cycles on different varying time lengths. The blue one here, just for argument's sake, representing the four-year cycle. So, over a longer period of time, you have the rising portion of the cycle, and then this is a smooth line, of course, and then the declining phase of the cycle. Within that, you have shorter duration cycles, like the weekly cycle, that typically runs around a six-month average, and that will oscillate as price goes up in the four-year cycle and then, of course, continue to oscillate as price in the four-year cycle begins to decline. The key distinction here is that for these weekly cycles, as the four-year cycle is rising, most of these weekly cycles spend the majority of the time, or two-thirds of the time, in a rising structure, and then they correct. Sentiment in the short term becomes very bullish, very euphoric. Everyone is excited; people start adding late to positions; they start buying things like meme coins and old coins; they start to get greedy; and then you get a short-term top. The weekly cycle turns, and then we move lower again. So that repeats itself and repeats itself up until the eventual peak in the four-year cycle. And then what happens on the way down? It's just the same in reverse, where we spend a lot of the time in a declining nature, shorter period rising in the declining four-year cycle, and mostly sentiment is pessimistic for the majority of those weekly cycles. This is the ebb and flow of cycles as they're intertwined.

And this decline that we're currently experiencing—unless you expect or believe that the four-year cycle has peaked, which I do not; I do not see any evidence of this at the moment—we are at or near the bottom of one of the oscillating weekly cycles. And this is simply coming off a period here where we have a new administration in the US, a very crypto or Bitcoin bullish administration, with talk of a strategic Bitcoin reserve, possibly even purchasing Bitcoin outright for a sovereign fund, but also actions on the SEC front and regulations that are all very pro-crypto and pro-Bitcoin. That got us up and pumped up meme coins and everything else, and we got to a local high here in December and January. And now, as has been the case pretty much since the beginning of Bitcoin's inception, we're in one of these periods where that excess sentiment is being worked off, and we're now moving down towards this very pessimistic phase of the weekly cycle.

So I'm going to start with a weekly chart. I don't often cover the weekly chart in these videos; I do like to focus on the monthly and the four-year cycle. But coming off that chart I just shared with the weekly cycle intertwined with the 4-year cycle, what you see here are these blue arrows representing the lows of the weekly cycles since the bear market low back in November 2022. And we've had one, two, three, four, five, and about to complete the fifth of these weekly cycles in what is a market, on the four-year cycle timeframe, that is rising. So you see the rising nature of this four-year cycle, and what you see around that is this intertwined weekly cycle that is spending a good portion of that—of that cycle—in a rising manner, and then you get the declining phase of that cycle that serves to essentially punish those that came in late in each of those cycles, reset sentiment, and then begin the next rising portion of the cycle. And it's my belief, right here as we sit 25 weeks since the last major low—that one being in September—where we had this 105% move, I believe what is occurring right now is what has occurred so many times in Bitcoin's history: we're in one of these weekly cycle declining phases where we are getting sentiment back into this very negative, pessimistic place for the cycle to be reborn and a new weekly cycle to begin. This just represents pretty clearly the ebb and flow nature of the markets and how, after a now 10-week period of mostly moving sideways, we're now into this sort of mini-capitulation mode of it coming down.

What's interesting to note, though, is that even though there's quite a bit of fear out there—maybe less fear within the Bitcoin holder community versus anybody or everybody else that's mostly in altcoins, from what I can tell—there's still a decent amount of fear that's creeping in on the Bitcoin front. And all I can say for now is that we are, from the highs, around 21%, maybe 22% off that peak. The decline last summer, this was a longer period around 30%; the decline back a year ago, 20%; and a couple of 20% declines also in 2023. So we've seen a 20%, a 20%, and a 20%, 32%, this is the 420%, and a 30% decline in this 4-year cycle. So, until I see evidence otherwise that suggests that this four-year cycle has peaked, the timing of this weekly cycle suggests to me that we are experiencing one of these periods where we are in a declining phase into a weekly cycle low before moving higher. The problem with this, if you're looking at short-term timing, is that we don't know how deep a move in the very short term could go. There's no reason why this current move, as I record, couldn't drop all the way down to the low 80s, and there's more of an outside chance that it could also fall back into the 70s, coming back to tag the high a year ago, March 2024, which was also the weekly cycle high back in March, and that one is down at 73,000. I think that's a little too extreme; I don't think we get down to that level. But the point is, when you're invested in an asset class with this type of volatility—an asset that over a short period of time, like this 15-week period, can rise 105%—then a drawdown of 30% to even 40% is something within the range and should not come necessarily as a major surprise and should not, at least initially, have you thinking that the market has peaked. A move down of 30% right now gets you to 75,000. 30% declines in the last four-year cycle, and certainly the one in 2016 and 2017, which I think this cycle mirrors much better, had around 630-plus percent drawdowns while it was in the rising portion of the cycle. So it's always good to keep that in mind because, again, if you're going to hold an asset like this—if you're going to hold Bitcoin—part of your success is going to be in being able to ride out those storms. If you're one that took this 30% decline here over the summer and sold based on fear that we're going to enter into a recession or any other reason that you convince yourself, then you would have sold at around about that $50,000 level and saw Bitcoin double since then and still be up a healthy amount—still be up a healthy 64% in that period. So it comes with the territory, as they say.

Until we have a top in the four-year cycle, I think we have to just grin and bear this and see it through, and then we should be in a position for the next weekly cycle to begin and to start pushing up to all-time high territory again. Moving forward, I think a lot of the fear that I'm seeing out there, a lot of the comments I receive through my service, also on Twitter, has a lot to do with altcoins and how altcoins have essentially decoupled from Bitcoin itself. The performance of Bitcoin is shown—of course there are always some exceptions—but as a whole, the total market cap, or the total ecosystem outside of Bitcoin, is really not performing anything like it has in prior cycles. And many participants, even the big Bitcoin believers I know, have some allocation or decent allocations to altcoins. But many, many people in this space have significant allocations, and they are essentially suffering here. And without any real use cases—there was this whole meme coin, which I don't call a use case, but it was what kept interest—that seems to have died here. It looks as if the Trump coin was the top of that, which is probably not surprising in hindsight. Since then, it's been scam after scam after scam. Then some of the other narratives from prior cycles, like DeFi and NFTs and ICOs and gaming and so many others, have really come and gone and failed to deliver, failed to bring in a broad retail adoption that, when you have such a higher market cap in the altcoin space, is needed. There's only so much an old crypto community, a tired crypto community, can sustain and drive a market higher, especially when you start talking no longer a billion or two billion or 50 billion, when now talking, you know, a trillion dollars worth of market cap. It's a lot of capital that's sitting out there to sustain and to hold value without a real retail use case where people are coming to use these solutions or these applications—not for farming of a coin and so on—but actually because they find real value in these and they want to use these applications. We're just not seeing any of that, and I think this is the reason why we're now seeing a significant decoupling between what Bitcoin is as an asset—which many, of course, you know, have always known and believed—but Bitcoin has become a true institutional asset class that has attracted pension funds, big institutions that weren't crypto-focused and not even tech-focused per se. We now have, of course, sovereigns, even possibly central banks, sovereign wealth funds as I mentioned. So it's gotten broader; serious capital has come into this space, and we are now going to need more and more of that to sustain Bitcoin's rise. But it is my view that this altcoin space is dragging down a lot of the sentiment, and I think you're going to see that divergence continue here. Now, there's probably going to be a period in this four-year cycle, if we continue moving higher, that there'll be some type of recovery in the altcoin space. But really, I think they are mostly—there's just too much supply, too many narratives, too many ideas, too many people trying to essentially steal from each other or take from each other, and they're a very PvP sort of environment, and I don't think that's sustainable.

So this is about Bitcoin; let's leave all that behind and not let that experience or that performance taint what we're seeing on Bitcoin. Because, as I mentioned on Bitcoin, the chart here still looks pretty good. I see no reason for concern when I flip to the monthly. So, first of all, the major sort of trend here is respected; we're still in the rising portion. We saw an all-time high only last month. We're at the 10-month rising moving average, and I don't see—I haven't seen any major sort of euphoric moment, blowoff kind of like moment in this 4-year cycle. What came a little close was basically a year ago into the all-time high that was set March 2024. But it is my opinion that the fact that we didn't break down from that period, we had a solid 7-month consolidation below the prior all-time high, and then went off in another move that didn't get at all extensive—didn't extend itself all that far in the end—didn't show five or six straight months of excessive sentiment. To me, this looks like just yet another step up. So we've seen these levels throughout this bull market where we had the initial move of the 4-year cycle low. We built a nice level here over four, maybe five months. Then we had another move up; we got a bit of consolidation right there; we had a secondary move up. This was the first half of the four-year cycle move. It peaked for the first half of the four-year cycle, declined into the midpoint of a 4-year cycle. If you look at kind of where that fell from a month standpoint, it came in around about month 22, so right near the midpoint of the four-year cycle. And now this should be—this is the second half of the four-year cycle, which traditionally has been the more euphoric, the big bull phase of the four-year cycle. I know it always looks sort of—it looks pretty scary when you have a decline like this, but they happen; they come. And if anything, they just serve to reset sentiment on the way up and make the bull market more sustainable.

Now, I do get quite a few posts or notes of concern from people about yield curve inversion and recession possibilities and tariffs and so on and so on. And all I can say to that is that I've been hearing that pretty much since this bull market began, and the market has continued to follow the cycle. It's not a guarantee that this cycle will look and feel exactly like the prior cycles have, where it peaks around that month 35, give or take a few months in either side, forms a fully right-translated cycle, meaning that it rights—or at least maybe two-thirds or three-quarters of the way into the cycle—before declining into the bear market phase. There is zero guarantee, and I try and make a point in every video that I've done pretty much in the last almost six years now that there is no guarantee of that. But it is following that script; it is following that structure; it is behaving like it has behaved in prior cycles, and therefore I tend to want to put more weight in the probability—or more likely, more so the possibility—that this cycle is following the script of prior cycles. There's going to be a time, as I've shared also many times in the past, that a 4-year cycle is not going to be a 35-month move from the bottom up and then a 12-month or 13-month decline to a bear market low. There's going to be cycles—four-year cycles in the future—that look vastly different. But to me, at this point, this cycle still looks a lot like the prior cycles, and especially a lot like the cycle of 16 and 17—not perfect, but very similar—consistently grinding up and then getting to a point near the end where the move accelerated. So, if it's going to look like prior cycles, then I think once this period here of decline comes to an end—whether that's right now, like today, around this $86,000 level, or whether it has to drop to 80,000 or maybe the mid-70s—I don't have the answer to that; I don't think anybody does. But whenever this comes to an end and sentiment is cleared, I believe we'll get another move up, and this trend on the four-year cycle will continue again. I see no reason why that has ended, that this market is in a topping motion at this point. Price action certainly doesn't warrant that type of judgment or call; maybe fear does. A lot of people do act and think based on fear—fear of losing what is a good position that they've had, or sitting on a highly profitable position from an open profit perspective that starts to weigh on the mind as the bull market keeps on going higher. There's also that PTSD from prior cycles where you look back and say, "Oh, if I only had sold, I would have had so much more." You're not going to ever time the top perfectly in any market; that goes without saying. And also what goes without saying is that a market ultimately can do absolutely anything it wants to do. It's a humbling force that nobody has the answers for.

So my analysis here has always been about finding repetitive structures or repetitive price action over cycles and looking at that as a—looking to that as an edge—trying to get in as best as possible when people are finally dumping and capitulating, holding that for as long as possible, and trying to extract the maximum amount of value that we can in the cycle, in preparation for a rinse and repeat, an ebb and flow back down to the next period or next decline back down to the next bear market low for the next 4-year cycle to begin, hopefully being able to cap near those lows again. And so, over a long period of time, being able to, one, take advantage of the rising cap market cap of Bitcoin over multiple four-year cycles and using these four-year cycles to be able to gain additional Bitcoin as a result. So, with that said—as I mentioned, a humbling force—I don't have—I can't say with any certainty, can't say absolutely that we haven't seen a top in this market. I personally give it a lower possibility; it's—but it is a real probability—a probability that the market has peaked. So people ask often, "How would you know?" And the problem is, when you have an asset class that can give us 30% drawdowns in an uptrend, you really have to give it a lot of room, and it basically says that you have to drawdown a significant amount in theory before being able to say definitively that the market has peaked. And even then, that's not foolproof. For example, back here in 2021, we had a significant drop, then back to all-time highs. You can still get a significant drop and then continue moving higher. So that's why I say, with an asset class with such volatility, unless you get the absolute top—like we get a '17-like move, where I do believe that would have been—or that was—a much easier market to predict for a peak—it's going to be very difficult to, in real time, find the absolute peak. But what we could be—what we could look for here is a situation, going back to the weekly chart as a guide, where if we can see this market bottom out—let's just, for argument's sake, say next week at 81,000—it could be today, but it could be next week; it's irrelevant—we formed this weekly cycle low; sentiment is completely in the gutter by that point; and then we make a move up. And I think what you would see, if this market has already peaked and already formed the top in the four-year cycle, is you'd have a sharp, aggressive counter-trend move right here. And I don't know how far that would take you; maybe it takes you back to 103,000, 105,000; maybe it makes a brief all-time high; it's irrelevant what it does. But once you—once we see the beginning of a new weekly cycle here, the early phase of that, and it begins to peak early and rolls over—so it doesn't continue doing this higher to the next—next weekly cycle peak—but instead, at this point, comes back down to this 99,000 level, comes back down and takes out this level, this low that forms wherever that forms—whether it's today or next week or the week after, we don't know—but wherever this forms and takes this out, then this, to me, becomes your topping pattern. So we should be looking for a market that does something similar to prior weekly cycles—forms the bottom and moves—forms the bottom and then moves up—right? We should be looking at that, and that's what that blue line represents—that's a continuation of the four-year cycle; that is the ebb and flow of the cycle. If we get this move up over the next—let's call it three to eight weeks—to an April or May period and then rolls over and takes out this level, that, to me, would be extremely concerning and essentially is what's called a failed weekly cycle. And a failed weekly cycle is where the—we don't see a higher high in the weekly cycle timeframe, and you see a lower low that indicates a change in trend and therefore a change in trend on the four-year cycle timeframe.

So, until that happens—until we see something like that, which we won't be able to see for at least another month, possibly two months—I'm of the opinion that this 4-year cycle is mirroring prior four-year cycles, and therefore this is a cleansing period that we're experiencing today, right here, and a continuation of this four-year cycle is directly ahead in either the coming week or coming weeks. And that sets up for essentially the final bull phase of this 4-year cycle. We're in year three of the cycle; we are sitting on month 27 since the bear market low. And if the narrative right here is that this is following prior four-year cycles, then we start to look at where prior four-year cycles have peaked, and that would be around about the October timeframe of this year. So we are getting close to that, and in fact, we are just months—a few months—historically at least, around eight months from that four-year cycle peak. And when you look at it on the weekly timeframe, these weeklies typically go for, like I said, around 24 weeks; they do vary quite a bit. But um, if you look at the next weekly cycle up to a high, if it follows prior cycles where it rose for around about 90% off the lows—if you get down to an $80,000 level and you rise by around 90,000—it's potentially possible that by May to June timeframe, over a 16-week period, this weekly cycle can peak maybe around the $150,000 level, then followed by your sort of 20% or more drawdown. As you can see, these drawdowns get massive from a nominal standpoint, so you start talking about $30,000 drawdowns, but which essentially are 20% and 30% down into a weekly cycle low—a period of again, ebb and flow and resetting of sentiment. But then, by that point, when you're looking at the summer, late summer months now, you're getting very close to your traditional four-year cycle high, not leaving a lot of time between late August and October. And this is where I would think—again, this is only if it follows script, follows prior cycles—but then we'd be looking at a final launch, a final speculative cycle that doesn't run very long from a weekly cycle standpoint and runs up to a peak. Again, I want you to kind of ignore the numbers; we're looking more at time than anything else, and we're following the structure, okay? Respecting the ebb and flow nature of the market as it moves up, dissected by a four-year cycle trend line that runs through that to a peak that then eventually gets followed by the bear phase of the four-year cycle, and that goes back to the chart I shared with you originally from an intertwined cycle perspective.

So all this to say that staying patient, staying invested, believing in the four-year cycle, but also understanding that, yes, you know, it's come a long way, and there are signs out there of excess. We have obviously, like I mentioned, Trump with his own coin, scam celebrities doing meme coins and so on and so on. There are signs; we're also getting later in the cycle; we're already a right-translated cycle. No matter how this ends up, we have come to a point where, if this was the peak, it would be past the midpoint of the cycle; it's also comfortably above the high of the last four-year cycle. So we've already fulfilled the sort of right-translative four-year cycle narrative or expectation that we had in the beginning of the cycle. What we're looking for now is that final piece that mirrors what it's done in prior cycles. But as I mentioned, there are no guarantees of that; there are no absolutes in analysis, and anything is possible. I'm sticking with what I believe the cycle is doing, and we're going to try to be as nimble as possible in identifying that the market has peaked and looking to then unwind positions as a result. So, until that point, we follow this script, we follow this narrative, and we stay in position. We don't allow short-term weakness, short-term fear, and short-term capitulation to crowd into our long-term mindset we have on the four-year cycle investing. We do few buys and few sells over years; we don't trade over months, certainly not weeks or days. Therefore, we shouldn't be trapped in what Bitcoin is doing over a short period of time. Because if we look back just to November, Bitcoin was at 69,000; October, which was only four months, five months ago, down to 58,000; and just in September, which wasn't that long ago, 51,000. So we ignore the short-term fear; we widen the lens, as I like to say, and we accept that Bitcoin's a volatile asset class and it's going through one of its volatile periods as we speak.

So, flipping over to the model portfolio, which you can find on bitcoinlive.com—I have a link also in the comment section below—looking at the first sell of the four-year cycle, currently at 153,000 is the number listed now. That's probably going to change over the week; it's going to depend on where this local or current decline comes to an end. But as I mentioned, the target for the first sale is based on the idea that each of these weekly cycles have gone up around 90% to 100%. So looking for a move of around 80% to be comfortable in taking profit from wherever this low forms. So a move right now from this point to around 80% gets us to around this 153,000 level, understanding that if we get a major blowoff that might be too low, and that's okay; I'm going to be okay with that because at least I think we'd be selling a portion of the portfolio on a local euphoric kind of move—right? An 80% move from where we are now gets us to a position similar to where we saw other weekly cycles peak. So we want to try and capture a big move over a 12- to 16-week period to an area where we are getting very close to that—to that October, 35-month level—even though I'd be well short of that—but a level where we start to say, "That's enough; I'll take the extraction here; I'll take profit and then put that aside and let's see what else the cycle can give us." And if it can follow prior markets, prior cycles, and give us something like that, and even if it gives us a good drawdown from that point, we can look for one more final move and then look to draw another level where we would take profit. So, on the 4-year cycle portfolio, looking and added the target sell here—again, that's going to change—of 21 Bitcoin in this model, and which represents half of the model portfolio that goes into—if it does trigger—into a cash position, and then we let the rest of the cycle unfold. Now, depending on how this unfolds, I did share with you kind of a bear outlook—right?—if we do manage to get this low form and then any clear evidence that a new weekly cycle has begun—say a move back to 100,000 or so—then I'll be adding a stop target for getting out of a position, and that may include a stop for the sale of the entire model portfolio, a good big portion of that. So be aware of that; that will only get updated after the fact, after we get some type of clear evidence of a low, some type of rally at that point, leaving behind a defined low from which we can anchor a stop from.

In summary, I just want to say that I know when Bitcoin goes into a drawdown like this of 20-plus percent that your mind starts racing, and you start freaking out about locking in profit, taking profit, and being secure in that sense. And that's okay if you've maybe made a lot, and there's a way to secure some of your future. This is not a bad spot; okay? It's not the end of the world if it goes to a good cause, like paying down a mortgage, buying a home where you've been renting, securing a level of financial freedom that this could afford you to do. There's nothing wrong with doing that because there will be other bull markets, not just in Bitcoin but in general in investing; they come around often and frequently; there'll be more opportunities. So if it makes you feel comfortable in doing that, you can do that with a portion, or even if you have to sell some of your portfolio to put your mind at ease, and as I said, bank something, buy another good performing asset with it, there's nothing ever wrong with that. But otherwise, it's mostly fear—right?—and don't forget we've had these periods in this four-year cycle; we had these periods in the last four-year cycle; we certainly had those periods—you can see all these long weeks and the monthly candles—those are 30-plus percent moves—and we had them again in this four-year cycle. They come; they're part of the territory; we have to learn to navigate those and to work with those on the way up towards a high. So I hope you've enjoyed this video. I'll do another one where I see the need for it, probably in around eight weeks or so. Until then, be well; I wish you all the best, and take care.