Bitcoin: Dubious Speculation

The speaker discusses Bitcoin's current trading around $78,000 and references previous discussions comparing it to prior midterm years, specifically 2019. The speaker reiterates that Q4 of 2025 was, in their opinion, the optimal time to sell, having clearly stated this at the time. They also mentioned in November that they would not attempt to time every countertrend rally, acknowledging that it's a "fool's errand" to trade them, despite discussing seasonality and potential windows of weakness. This is evidenced by many people expecting Bitcoin to bounce at $75K, only for it to drop to $60K. The speaker notes that the current trajectory is still largely consistent with previous observations. They had predicted weakness in early February and early April for midterm years, based on patterns observed in 2018. While some were upset that the April low wasn't a lower low, the speaker points out that in 2018, the April low was a higher low compared to February. The key is identifying when lows are likely to occur, not whether they are higher or lower. The next anticipated windows of weakness are June and October, as both June 2022 and June 2018 marked lows. The comparison to 2018 is further drawn by the similar price action: a low around $6,000 in 2018 (and $60,000 in the current cycle), followed by a higher low in April, a bounce into early May to the bull market support band, and then a drop into late June. A subsequent bounce into July was followed by another decline. The speaker cautions that seasonality doesn't always play out perfectly, citing 2014 as an example where June was a high, not a low. However, the current countertrend rally, characterized by five consecutive green weeks starting from a higher April low, strongly resembles the 2018 pattern. The speaker emphasizes that predicting exact lows or highs is impossible, and the focus should remain on identifying windows of weakness. They push back against the notion that the four-year cycle is broken, arguing that Bitcoin has consistently topped and bottomed around similar timeframes in previous cycles. The chart still suggests a more likely low later this year than the February low. Delving into "dubious speculation," the speaker highlights the striking similarities between the current daily chart and 2018. In 2018, Bitcoin rallied, found a local top around April 24-25, sold off, and then rallied again into an FOMC meeting on May 1st. On May 1st, Bitcoin formed a local low, rallied for 4-5 days, and then began its drop into June. The current cycle shows a similar five-week rally from a higher April low. Bitcoin topped around April 22nd and 27th, sold off into the recent FOMC meeting (April 29-30), found a low on the first day of FOMC, and then had a green day. If it follows the 2018 pattern, a rally for 4-5 days would mean a downturn starting next week, coinciding with labor market reports. The speaker's base case is a lower high soon, followed by a drop into June. If this doesn't materialize, they would pivot to the 2019 view, which involves a sustained breakout. However, they believe it's too early for this, as February is not deep enough into the midterm year for a durable low, and the digestion phase after this bull market should be longer. The 2019 downturn matched the length of the preceding bull market, which is not the case currently. The speaker suggests the current downturn will match the late 2025 to late 2026 downturn, leading to a more durable rally later. If Bitcoin rallies into June, it would resemble 2014, where a June rally still led to an October low. The speaker believes June will likely mark either a low or a high, representing the end of a trend. For it to be the end of a downtrend, Bitcoin needs to turn around soon. Observing shorter timeframes, the speaker notes that Bitcoin's short-term uptrend has been broken, and unlike previous patterns of rallying at the beginning of the week, it sold off at the start of the current week, indicating a subtle shift. If Bitcoin fails to durably break through resistance, buyers might capitulate, leading to a retest of $60K. The speaker reiterates that no one knows the exact timing or price points. Even if a more bullish 2014 scenario plays out with a June rally, it would still likely lead to a lower low by October. Bitcoin is at a decision point, and the speaker anticipates it will follow 2018, forming a lower high soon, possibly before the labor market report. Comparing the current year-to-date ROI to the average of prior midterm years, Bitcoin is at the upper end of the range, about one standard deviation away from the average. A sell-off from early May into mid-to-late June would align with this historical pattern. Countertrend rallies are common in bear markets, and the current one is not unusually long compared to 2018. A key difference between 2018 and the current cycle is that in 2018, the March high was higher than the May high, whereas this time the May high is higher. However, a similar pattern with a higher high was observed in 2022. The speaker attributes the larger rally in March 2018 to a more significant preceding drop (70% vs. 50% currently) after a euphoric top. The speaker notes that in 2018, Bitcoin found resistance at both the 20-week SMA and the 200-day moving average, which were aligned. In the current cycle, they are not, with the 200-day moving average being much higher. If Bitcoin continues to rally throughout May, the speaker would lean towards the 2014 viewpoint but still expects a retest of the lows later in the year, likely October, as the next major window of weakness. The typical windows of weakness are early February, early April, June, and October. The speaker clarifies that "window of weakness" refers to when a low is likely to occur, not a signal to sell. They strongly advise against panic selling after a significant drop, advocating for selling into strength and buying into weakness.