Is Crypto Summer Canceled?

Is Crypto Summer Canceled?

renowned Global macr Traders we like R pal Mark yuso Friends of the channel use the framework of Seasons when referring to the cryptocurrency market and I want to investigate this Theory because could crypto summer be cancelled and indeed if we look at the charts it is uh impossible not to spot a seasonality in price moves the current year of 2024 of course is a summer year what does that historically mean for prices and is there a possibility of a bearish summer I mean the actual northern hemisphere summer you know coming into winter here for us down in the southern hemisphere that’s a different story right June July August what can we look at looking at historical data well here’s a multi-year chart from R pal as you can see each year and the crypto Market represents the season obviously winter is the bare Market in which the price of Bitcoin and all other coins fall off a cliff spring is the year in which prices find their footing and thus resume their uptrend that was 2023 and summer is the time when the uptrend continues fall is the parabolic phase the blowoff top probably 2025 if you look a bit more closely at the pattern you will see that some seasons have been more consistent than others and how they actually behave for example the bare years in blue have been pretty gosh darn consistent in their bearishness from 2014 we have minus 5 7% 2018 – 72 2022 – 65% oh some good memories baked in those numbers isn’t there for spring years in green it’s been up 38% in 2015 90% in 2019 156% in 2023 2015 with its modest gains is the outlier there the summer years then 190% in 2012 123% in 2016 20120 saw 300% up only consistently and the current year of 2024 which is summer year was off to a hot start with a more than 50% price spike from January to March only when we look at the fall years the image gets a bit more mixed an insane pump of 5,400 in 2013 1300% in 2017 but only 63% in 2021 it’s the fall year of 21 that saw a rather weak pump for us spoiled Bitcoin investors always expecting Mega Moon time what about altcoins and altcoin how do they relate to the bigger Cycles in the market well let’s look at the price of altcoins measured in Bitcoin throughout the seasons we know altcoins get absolutely trashed in crypto winter like Beyond trash thrown in the gutter and had someone takes a crap on them and then lights it on fire bad stuff right but what about summer and fall well this is the chart of dominance of cryptocoins outside the top 10 so everything excluding Bitcoin ethereum and the other top 10 altcoins like BMB xrp salana whatever as you can see crypto summer years kick off alt season but for altcoins summer years can feel more like spring meaning there are occasionally some very cold showers with sharp price drops again relative to bitcoin especially just look at 2016 look at 2020 in both years alts did not outperform Bitcoin that much measured from January to January even though there were quite large spikes only in Fall years do we really see strong consistent uptrends for altcoins the fall years are the true alt years where things get insane for altcoins even compared to bitcoin new coins pop up that do like 100x moves uh salana in 2021 now before we talk about the causes of the seasons I just want to take a real quick moment to let you know about the wealth Mastery newsletter the best damn newslet are in the crypto business my team and I work very hard every single week to bring you the best best and the latest opportunities in the market okay the things that are shaking the market let us save you your time and help you stay ahead of the curve with the latest news and Alpha on altcoins memec coins defi charts and much much more you can use the link Down Below in the description to join our 125,000 plus weekly readers for free check it out thank you very much so what causes the seasons so before we look at the current price action try to for cast out a bit let’s turn to a broader question why why are crypto prices so damn cyclical in the first place compare crypto prices of course to other Assets in a multi-year uptrend namely technology stocks the Fang stocks Bang have also moved in a super cycle type of pattern meaning that they stay in their Channel when plotted on a log chart at least now here’s Amazon for an example for you it’s not cyclical Bitcoin also is in such a channel but the moves are more cyclical as we saw well why well you probably know the answer or at least you have one of the answers already probably floating around the back of your brain which is of course the Bitcoin having this is the price chart of BTC all the way since 2010 also shown on a log scale if we smooth out this chart a bit and plot the having the dashed vertical lines we see that the big runup and blowoff top has always happened in the year post Bitcoin having well the yet but with the Bitcoin having in the back of our minds remember it did just happen this year right so it’s interesting that we can see a patn starting to emerge here even if critics argue that having isn’t as important anymore as it used to be which there’s some valid points to that with everything else going in the crypto space and the first having in 2012 meant a huge supply shock as the supply was cut from 50 BTC to 25 BTC per block the most recent having was from 6.25 down to 3 .125 much smaller in absolute terms okay only a little more than three BTC but total dollar terms pretty big so why are we still in such a nice cyclical pattern well you could argue that the first having actually set in motion a pattern it set in a pendulum basically into motion so to speak anyway and it could sustain this by giving smaller and smaller pushes compare it to setting your kid in motion on a swing that doesn’t require a lot of push in to keep it going once you set it into motion but there’s another explanation and that is one that we will keep in mind for the coming months more on that in a moment but it’s the relation between money and Supply growth and asset prices so you need to understand this first central banks in response to stagnating growth and high debt levels have resorted to quantitative easing QE which significantly impacted asset prices this relationship became particularly evident during the 2008 financial crisis and the subsequent economic recovery periods now I already mentioned uh R Powell who talks about the everything code I love the everything code thesis very interesting this is a thesis that Central Bank policies have their own roughly fouryear Cycles with the money printer being switched on each cycle to pay for the interest on debts from a previous cycle these liquidity injections these liquidity Cycles push up asset prices and they work on approximate fouryear Cycles including even like the Chinese Central Bank is crazy indeed looking at this graph from macro micro there seems to be a correlation between the periods of low or even negative M2 that is money supply growth and bare markets that was the case in Spring uh 2015 when the M2 growth was negative whereas the summer and fall years of 201627 coincided with M2 growth peaking coinciding almost perfectly with the infamous 2017 blowoff top for Bitcoin money goes out prices go down money goes in prices go up same with the postco injection of liquidity appears that by Coincidence of course the Bitcoin having cycle has sort of aligned with the liquidity cycles makes you realize Satoshi is even more of a genius than we give him credit for now back to our question will we get a bullish or a bearish phase of the market in the coming months because this is the big picture you need to try to understand right about the cycle but what about coming months based on the previous Cycles our base case has to be that we are in the middle part of a bull market that we will see significantly higher prices over the next year year and a half but the road there will be bumpy and you should anticipate that looking at the current M2 growth we can see it’s relatively flat we are having printing from China and Japanese central banks for example maybe that explains a bit of the weak price action of the fed the Federal Reserve in the USA hasn’t really jumped on the party yet keeping an eye on money supply charts of course we’ll give you a valuable Anchor Point remember the FED is going to start buying back bonds pretty soon so things are happening now two slightly bearish scenarios for the coming months scenario one is that we’re just in a normal correction and in the coming two weeks we end up bottoming out in the low 50s or so for example just the theory right uh scenario 2 is that just a longer period of weakness ahead of us with price moving sideways for another two to four months that’s kind of what happened in 2020 by the way that would bring the cycle back to the previous bull market really in terms of timing and how it works and total structure and all this kind of stuff with the spectacular part of the bull market not starting until about six months after the halfway point or six months post Bitcoin having of course there are more extreme scenarios on either side of this both bullish and bearish still people saying we’re going down to 12K right and people say no super Cycles here we’re going up way faster than you think maybe resume the uptrend much sooner right or the bear is a macroeconomic outlooks just so bad is going to deteriorate rapidly in the coming months Global recession is coming bond market crisis is coming look what’s happening in Japan geopolitical escalation World War 3 is coming it’s all over Doom post now yikes you can never know for certain what’s going to happen Okay no one has a crystal ball for Bitcoin the biggest strength may still be that of global liquidity which has been on the rise since basically the market bottom that is the degree to which of course players in financial markets have room to take risk and it looks like that’s going to continue going up for some time and it’s not easy to measure which is why many analysts use a proxy a relatively simple figure that gives a nice idea of the underlying complexity for example central bank balance sheets or the money supply you see we think there is a good chance that sometime in the next few months Jerome pal Janet Yellen over the treasury that they’re going to significantly increase liquidity in the markets they’ve signaled said as much again with the bond buyback program that’s likely to happen soon when what way with what arguments they’ll figure it out but Bitcoin will be the first to catch on and to take off like a rocket in that scenario and just remember that even in crypto Summers there can be nasty stormy days in which you want to you know stay inside during the heating on relax a little bit especially for your alt coins okay be ready for it looking at at our actual summer meaning the months of June July August for the Northern Hemisphere it’s winter down south anyway quite possible that the current cool off phase will continue for a little bit if previous Cycles have any kind of indication but the tried and trusted four-year seasonality overall suggests the continuation of the bull market with high volatility money supply growth can really only go up from here pal and yelen will probably increase liquidity in the markets over the coming months Bitcoin ETF demand’s not disappearing overnight is it it’s only keep going up it’s Hong Kong South Korea everyone else come on board the Bitcoin having here all that kind of stuff even if a few cooler months are ahead does it really matter just enjoy the breeze man thanks for watching

Will Bitcoin & crypto be bullish or bearish this summer?
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00:00 Intro
00:40 The four seasons
04:23 What causes the seasons?
08:03 Another cycle: global liquidity
09:39 Bullish or bearish summer?
12:04 Conclusion

#bitcoin #crypto #investing
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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.