Bitcoin Double Top Cycle Theory Explained [AKA Max Pain Scenario]

Bitcoin Double Top Cycle Theory Explained [AKA Max Pain Scenario]

flash back to early 2021 when many
people expected to have a blowoff top
for Bitcoin similar to 2017 but then
came a brutal 50% pullback Savage Savage
market conditions and the expectations
shifted towards a double top scenario
like we had back in
2013 but what we got instead was a
rather lackluster double top but kind of
a double top nevertheless let’s look at
how the current market cycle is shaping
up and if we can identify the likelihood
of each scenario let’s go back to the
days long long ago a time when things
were simpler before I was even paying
attention to the markets and most of you
probably weren’t either
2013 what a year that must have been to
carry your crypto bags or Bitcoin bags
there really much crypto back then if
you could manage without going insane
congratulations in January 2013 the
Bitcoin price hovered around $13 mark it
shot straight up in a line basically to
more than 250
on April 10th doing more than an 18x in
just three months then it suddenly
crashed viciously more than 80% in just
two days wicking down below
$50 you can’t even see the flash crash
on this chart as it’s the weekly but man
those were the days guys wild times back
then as tough as we might think we are
having lived through 2018 and the 2022
bare markets hodling in 2013 those
people were made of uh something
different it was an allog together
different experience back then anyway
then for half a year Bitcoin just danced
around the hundred dollar Mark before
shooting up again for a second time
pulling another 10x topping Out close to
$1,200 this double bubble of 2013 as it
became known created almost a 100x for
BTC in just a 12-month period wow those
were the days huh by the way it was at
the tail end of the second runup that
the term hoddle hodl was coined by a
user on the Bitcoin doc Forum he wrote
his post as something of a drunken rant
and the deliberately misspelled title
would go on to become the battlecry that
we all know and love in the
cryptocurrency markets he wrote it
around the time that the price had
already begun crashing again after the
second runup setting the stage for a
brutal Savage disgusting be Market back
to the question we try to ask here is
such a double bubble scenario possible
again I’m not talking about 100x
obviously which is simply not in the
cards at the current levels of Market at
least not for decades to come okay keep
in mind that at the start of the 2013
Bull Run Bitcoin had a market cap of
only around a billion dollar okay now
the question is is could we have a
scenario where a first pump is followed
by a few months of let’s say a cooling
off period brutal crash potentially
before a second pump actually comes in
well to get an answer let’s look at the
monthly RSI for 2013 and later Cycles
now before we do that though I wanted to
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Down Below in the description or the
pinned comment on X now the RSI let’s
get back into this the RS is the
relative strength index it measures the
magnitude of recent price changes and is
a tool to analyze overbought or oversold
market conditions at a very simple level
traditionally the RSI is considered to
be overbought when it’s trading above 70
when we look at the 2013 runup you can
clearly see two peaks between those
peaks in 2013 the monthly RSI set below
the value of reset set below the value
of 70 now this didn’t happen in the 2017
bull market where the RSI stayed in the
70 overbought zone for more than 12
months in a row running with Leaps and
Bounds to a clear single Peak so where
does this put us with regards to the
likelihood of a double Top Cycle this
time around well as you can see the
early 2013 RSI shot up in a straight
line to almost 100 currently we’re
seeing
different Behavior after reaching a 76
reading this spring the monthly RSI
corrected and is now retesting the 70
level this is more like the runup of
2016 2017 based on this noteworthy is
that back then the retest of the 70 RSI
level came roughly 10 months prior to
the top interesting food for thought now
let’s zoom in on a bit here and pull out
the weekly charts in early 2013 there
were 13 weeks in a row that closed
higher and an exponential runup now look
at 2016 2017 in 2016 2017 we don’t see a
similar long stretch of crazy green
weekly candles and an exponential
uptrend instead of a multi-month
parabolic uptrend followed by a
multi-month correction the 2016 2017 run
from October 2016 onwards is really just
a pattern of multiple roughly two months
upwards price action followed by a
correction of a few weeks or a month
it’s really two steps forward one step
back wasn’t it and finally that brings
us to the current cycle it’s a nice
staircase climb but no multi-week green
exponential price action like in early
2013 it looks a lot more like the 2016
2017 run but now let’s look at a
different metric here’s a chart of the
relative volum volatility index or the
rvi very high readings indicate that the
market could be near a top whether that
is a single top or a double top it’s up
for debate last month while not crossing
the 80 level the rvi reached a point
historically not possible outside of the
final year of the Bull Run whenever in
previous Cycles the rvi touched 80 the
cycle has always been over for within a
year so judging by this indicator like
the RSI you can make the case for the
hypothesis that we are currently in an
accelerated cycle we also did a video
breaking down that theory if you want to
go watch it on the channel in previous
Cycles the top came roughly 500 days
after the having translated to the
current cycle this would put us roughly
in like September 2025 for a bull market
top not too bad right but as mentioned
evidence from indicators like the RSI
and the rvi point toward the cycle top
being nearer in other words price action
has been so strong and so volatile
already in the cycle that it is
reminding us of previous years’s prior
to the top notice by the way that is
with the
RSI also the toppy rvi level has reset
recently so instead of jumping through
the roof things have actually calmed
back down considerably who knows maybe
from here the volatility and the price
are going to jump up again creating a
pattern of uh the rvi such as in 2017
bouncing off the yellow moving average
for many many months an alternative
scenario such as in 2021 is also
possible in 2021 the rvi peaked in early
2021 and then kept dropping after that
but the price made new highs in the fall
of 2021 which brings us to a second
double top scenario that is definitely
worth considering prior to the 2021 Bull
Run we had the built-in assumption that
every bull market price Peak was
supposed to be a blowoff top well the
2021 cycle showed us that the price can
basically just reach a new high and a
calm lack lust away and have a bit of a
rounded top and just
okay that’s of course still on the table
here all right so final thoughts when
looking at momentum and volatility
indicators the current cycle has some
similarities with how previous Cycles
have looked roughly 10 months before
they topped but will it be a double top
like in 2013 or a straight runup like
2016 2017 or something of a muted double
top per se like we saw in 2021 well
price action currently looks a bit more
like 2016 201 17 at the same time we
can’t rule out the hypothesis of a super
cycle in which of course the price just
keeps grinding upwards because that
Bitcoin ETF inflow is just so strong
we’re not going to have a 75% bare
Market correction because the maturation
of Bitcoin as an asset and all the
liquidity and money flowing in the
growing institutional adoption all that
kind of stuff there are many roads that
lead to Rome as you may want to say or
maybe many ways to climb Everest the
market seems to have a bit of a habit of
finding a new route to the top each time
heck we might even see a triple top
scenario wouldn’t that screw everybody
up here’s the thing just keep your eyes
open keep your eyes on the metrics don’t
stress too much about any of this stuff
okay you got to enjoy the rodeo and make
sure you’re good no matter which way the
cookie crumbles because it is going to
crumble at some point okay and whether
it’s an accelerated cycle or a double
top or standard four-year cycle or a
super cycle whichever it’s going to be
it’s going to be one of those whatever
plays out be ready okay because the
market is full of surprises thanks for
watching

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00:00 Intro
00:51 The 2013 bull run
03:11 Monthly RSI for previous cycles
05:26 Weekly charts for 2013 and 2017
06:26 Relative Volatility Index (RVI)
09:02 Conclusion

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Disclaimer
Everything expressed here is my opinion and not official investment advice – please do your own research before risking your own money. Lark Davis (The Crypto Lark and affiliated brand Wealth Mastery) is not providing you individually tailored investment advice. Nor is Lark Davis registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Lark Davis is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.