Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin, and we're going to be discussing time-based capitulation. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the sale on Into The Cryptoverse Premium at intothecryptoverse.com. The sale is ending soon. Let's go ahead and jump in.
Bitcoin's currently trading at around $63,000. I'm recording this video on June 11th. It'll probably not go live for a few days because I'm going to be traveling, but just for reference, that's where we are right now.
Price-based capitulation is one thing. Time-based capitulation is another. And the argument that I have made this year is that time-based capitulation is actually more important than price-based capitulation. Be that as it may, if you were to get some type of price-based capitulation where all the on-chain indicators fully reset, then I think it would make sense to defer to price-based capitulation. But unless that happens, time-based capitulation, I think, makes a lot more sense to follow.
What I mean by that is that in a lot of these prior bear markets, Bitcoin was going down for approximately one year. Okay? You have December of 2017 to December 2018. You have November 2022 to, or sorry, November 2021 to November 2022. So the point is that the last two midterm year bear markets lasted approximately one year. Now, the bear market before that, it was November 2013 to January 2014. So in this case, it lasted a little more than a year. However, I would point out that the high that occurred was like at the very end of November, like almost like early December, and then the low was pretty early on in January. So if you were to actually take sort of like a date range from the high, let's see when the high was. So it would have been the week of November 25th to the low, it was about 59 weeks. And if you look at, say, December 2017 to December 2018, it was about, you know, 53 weeks, right? And then the next one was about, I think it went all the way over there, is about 54 weeks. We're currently what, about week 35? So I'm not saying that it can't bottom sooner than the end of the year. I'm just saying that history shows us that the bear markets take about 50 to 60 weeks to play out when the bear markets happen.
Now, we actually have an example, though, where a bear market played out in a shorter time frame. And that bear market was, in fact, the 2019 into 2020 bear market, which I have, in fact, talked about a lot, and I've made this comparison to this bull market followed by the bear to this one over here. Now, what we'll never know is what would have happened to Bitcoin back in 2020 had we not had the pandemic. What would have happened? Would it have gone like this? Like maybe it would have consolidated more, eventually came down here, and then gone up? We don't know because what happened is we got a price-based capitulation where it essentially reset all of the on-chain indicators.
Let me give you an example. If you were to look at things like the realized price and the terminal price, you can see that Bitcoin falls below those at the end of every bear market. Now, in 2019, 2020, it was trending down after that non-euphoric top, the post-apathetic top digestion phase. And you could have argued that maybe we would have had time-based capitulation, but instead, we had price-based capitulation where it fully reset the on-chain indicators. In fact, the Bitcoin supply in profit or loss also crossed in 2020. So you can have an idea or a thesis on how long something will take to play out, but if you were to get a price-based capitulation, then I think it makes sense to pivot sooner.
If you were to compare the current bear market to the one in 2019-2020, you can see what I'm saying. If Bitcoin were to capitulate in June, the same way that it did in March of 2020, then it wouldn't make sense, in my opinion, to stay bearish until October. It just wouldn't. But if we just continue to put in slightly lower highs and slightly lower lows, which is kind of what we've been doing for this year, and if you look at the 2026 and compare that to the average of prior midterm years and overlay one standard deviation over to that average, you can see that right now Bitcoin is down about as much as it normally is at this point in midterm years on average. So, it's hard to know which way we're going to go. Do we get a big capitulation that allows all the on-chain indicators to reset and justifies not having to wait until October?
There is an example of that in history, even with the S&P 500. If you look in the 1960s, I think it was, uh, from memory, 1962, you can see there was a big capitulation by the stock market into into the summer, into July, or yeah, June, and then the October low was a higher low. So, I would argue there's a chance that you'll have a low around that time frame in Q4, and it'll probably be a lower low. But if Bitcoin were to get a big drop sooner, then you could justify pivoting sooner.
I put out a video recently talking about the risk metric, right? And how I use it to navigate crypto. But one of the things I was very adamant about this cycle was that we likely would not go to the euphoric stages because we were seeing retail leave crypto rather than come to crypto. And so when I was looking at it last year, I'm like, look, this to me, it looks like a a larger version of what happened in the 2019 bear market. And because of that, instead of waiting for Bitcoin to go all the way up to the higher wristbands, I used time-based analysis rather than price-based. So it was more like, hey, we just ran out of time to go to these euphoric levels. In 2019, we did not run out of time because the four-year cycle, like that that post-apathetic top occurred in the middle of the four-year cycle. But in this cycle, the apathetic top occurred at the end of the four-year cycle. So the reason I became very bearish on Bitcoin late last year, it was not because the euphoric rallies happened. It was not because all the indicators were going off. In fact, if you were to go back and look at the the terminal price chart that has the realized price and balance price, you'll see that Bitcoin did not go above the terminal price, which is where it goes during euphoric rallies. It only went part of the way up there, like 2019.
So my best guess as to what is happening right now, and I know this has come, uh, you know, a lot of people have not liked this view, but I have to be honest, like I feel like at this point, it is the only view that has sort of stood the test of time, one of the only views. I think there's a few other people out there that have had similar types of views based on other things, but it is one of the only views that has stood the test of time that this was an apathetic top, no rotation into altcoins. Bitcoin topped two months before QT ended, like 2019. And in 2025, the Fed cut rates three times. In 2019, the Fed cut rates three times. In 2025, it just happens to be that the post-apathetic top digestion phase happens to line up with the midterm year bear market. And so you could look at a chart like this, the comparison to 2019, and say, "All right, maybe the bear market only lasts nine months." And you could be right, right? But my guess is what's going to happen is Bitcoin will find a low in June, rally in July, and then people are going to be saying, well, it doesn't need to go for a full year because we didn't have a euphoric rally. That that is kind of what I see being the big, the next big debate.
The problem is that when it happened in 2020, it was price-based capitulation. So, I would be in that camp if Bitcoin had price-based capitulation. If all the on-chain indicators reset, then I don't think it would make sense to stay bearish into Q4. But I defer to time-based capitulation until that happens.
One thing that I, I've sort of talked about a little bit in prior bear markets, and I'm not honestly, I'm not really that sure if it's going to play out like that this time, but if you look at the volume of of Bitcoin, and I'll probably do a video on this, uh, at some point, if you look at the volume, a lot of times when Bitcoin bottoms, it's like the volume hits a wall, like it's kind of going up and it hits this big wall where a lot of volume comes, comes in, people capitulate, and then that marks the low. You can see that also happened in 2018, right? Volume was trending down and then you get a massive spike. And in 2014, right? Volume was trending down and then you get a massive spike. Volume's trending down. That's not really that massive of a spike compared to the other ones. But the counterpoint is you have to have that, uh, in a post-apathetic top bear market. And the only example we have is 2019. And we did get it, and it occurred during the pandemic. So unfortunately, this is one of those things where if you want to try to be very smart about it, right, you could just be like, well, you know, like, why do we have to have a pandemic style into the bear market? And I'm not saying that we do. But what I am saying is that literally every example of every bear market that Bitcoin has ever had, it, it, it hasn't actually ended until you get a big spike in volume.
And so I'm going to keep following time-based capitulation, which would entail Bitcoin finding a low probably sometime later this year. It could be October would be my base case, but I, it's not like it can't be plus or minus sometime around that. And I think as an investor, it makes sense to pivot if the market does something that you're not expecting. So, if the market were to absolutely nuke into June, let's say we get a big drop by Bitcoin and it goes down another $20,000, then I don't know that it would make sense to stay bearish into October. Probably wouldn't. But if Bitcoin holds support at say 60K, like it did back in 2018, just held support at 6K. You had a low in February, you swept the low in June. This cycle, the same thing. A low in February, you sweep the low in June. If that happens, I still have to be open-minded to a final drop in Q4 that comes on surging volume. And that would likely be accompanied by a drop in the stock market because the stock market often gets a drop in the second half of midterm years.
If this plays out like the year-to-date ROI average, then what would essentially happen is Bitcoin might go a little lower in 2026, right? If you look at 2026 and compare that to the average of prior midterm years, uh, you can see that, you know, if Bitcoin were to go a little lower, let's say it goes a little lower around the time the Bank of Japan raises rates, which is coming up. If it were to go lower, that might make me question a little bit if the June low is in. But I would have to see if the on-chain indicators reset. You know, if Bitcoin were to go to 54K, we would go below the realized price. We still would not be below the balance price. And I'm not yet sure if the MVRVZ score would be fully reset.
But this is more of a time-based thing. Every time the supply of Bitcoin in profit and loss crossed, the low in the market occurred within one to four months. So it crossed in June, and last cycle, it first crossed in June, and the low came in November. The cycle before that, it first crossed in November, and the low came in December, only one month later. In 2014, they crossed in September, and then the low was in January. So October, November, December, January. So that was four months. And then in 2011, they crossed in September, and then the low ended up being, uh, on the daily, anyways, that it ended up being in November. So a few months later. So time-based capitulation is more important. And that can go the other way, too. If Bitcoin is holding 60K throughout all of Q4, then maybe that is the low. But I still would argue that you would have to go through that time-based thing. It'd basically be like 2018, but instead of getting the final drop, we rally back up. But again, we can't say that right now because we just simply haven't gone through enough of the midterm year to justify making that proclamation because of where we are in the midterm year. We know that, you know, Bitcoin often finds lows in June. It'll often rally kind of early in the summer and then sort of come back down as we get into the end of the year. And then that marks the time-based capitulation.
If I had waited for, you know, for Bitcoin risk to hit the euphoric levels at the end of last year, then I just simply would have completely missed the bear market. But I deferred to the time-based view of Bitcoin's bull markets because I think the time-based view can often be more powerful than the price-based view. But anytime you get a massive rally, you don't wait around. And I've always said this, never let a good bubble go to waste. In 2021, by the time Bitcoin hit 58K, according to the risk metric, I had already sold 87% of my Bitcoin. Now, at the time, I felt like a complete idiot because, you know, Bitcoin went all the way up to 58K in February, right? It was like right here, like February, March time frame. I had sold 87%. And then the market just continued to go up, and everyone was screaming it was going to 300K. People were dunking on me left and right. And then later that summer, the market melted back down, and not everything went back up to all-time highs. Some of the things did. Uh, Bitcoin only barely swept it. So you have to consider that deferring to time-based views makes sense. Meaning I'm going to sell Bitcoin, you know, in Q4, the post-halving years. And everyone always gives me a hard time about it, right? But then it, I mean, it worked out. I don't, I don't fault myself for for doing that because by having that money in other markets this year, it's done a lot better. And I get, I know that a lot of people don't agree with that, but because they're like, well, you just buy, buy good assets and hold it forever. And that's what I do for most of my portfolio. Like I buy index funds and I don't sell them. I buy stocks and I don't sell them. I buy like a lot of precious metals and I tend to not sell them that often. But with crypto, there's this cadence that has existed for so long, and I don't really like sitting down through 70 to 80% drops in the market. Like I just, I don't like dealing with that. And I do still have some Bitcoin. And I think it actually makes sense to start accumulating here as as we put in the June low. But there's a reason why. I mean, I've, I've gone through enough of these bear markets to be like, you know what? I'd rather, I'd rather sit out and avoid some of these losses if I can.
The biggest mistake people make, though, is they sell and then never buy back. And I'm saying usually the time to start getting back into the market for Bitcoin is right after that June low, then accumulation, uh, through the end of the midterm year, even as price goes lower, often works out the best. Don't be the guy that sold late last year and then you never buy back and then you're like sitting here like wondering, thinking you just would have been better off had you not sold. Yeah, if you're never going to buy back, you would have been better off had you not sold. So there's that consideration to make as well.
So I do believe that time-based capitulation is the more important thing right now, not price-based. But if we were to get price-based capitulation, then it would make it would make sense to pivot and say, you know what, time-based capitulation is good. But if the, if all the on-chain indicators reset, I wouldn't stay bearish any longer.
So that's the video for today. Time-based capitulation versus price-based capitulation. Hopefully, this makes some sense. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and again, check out the sale on Into The Cryptoverse Premium at intothecryptoverse.com. Also, we are going to be throwing the first ITC conference later this year, uh, probably in November. And if you are interested in that, I will put a link down in the description below. You can go, uh, put in your email. It's right here, the Benjamin website conference tab. Put in your email if you want to get updates about it as we as we receive them. Thank you guys for tuning in, and I'll see you next time.