Showing posts with label Bitcoin. Show all posts
Showing posts with label Bitcoin. Show all posts

Wednesday, January 1, 2025

2025 Outlook on S&P 500, Cryptos, Currencies, Metals & Energy │ Namzes

In 2025, the S&P 500 is expected to head toward a multi-year major market top. The overall structure of the S&P 500 is forecasted to rise until mid-January, followed by a correction of more than 10% into late February or mid-to-late March, and then a melt-up into a major top in mid-July or late-August. This will be followed by an approximately 17% drop into late October that will trigger a bear market.

 
S&P 500 projection for 2025 (timing, not magnitude) with seasonally strong windows in the bottom panel.

The S&P 500 is projected to rise until around January 17, reaching approximately 6,250, then experience a 10%+ correction by the end of Q1, targeting around 5,600. Key buy points are expected around February 26 and in the second half of March, with the ideal date being March 28, which will set up the final leg up. A minor buy point is likely around June 27. 
 

The major top is anticipated around July 17, with the possibility of a lower high or a double top/divergent high by August 22, with a minimum target of 6,500 and an upside target of approximately 7,000. After this, the market is expected to drop into a low around October 27, aligning with seasonal and nested cycle lows, followed by a bounce that ultimately fails. The S&P 500 is expected to end the year in the red, setting up for a challenging 2026, with a year-end target of 5,650.
 
In 2025 we face a conflict between the Decennial Cycle (years ending in "5"), which is typically the best year, and other cycles that suggest the market will peak in 2025. I will provide commentary on each cycle, starting with the 3.5-Year Kitchin Cycle (41-Month Cycle)
 
1.) The current Kitchin Cycle began in October 2022 (when we accurately called the bear market low), and 2025 will be year 3, which usually marks the peak. After that, the market is expected to decline into late 2026, which aligns with the ideal low of the next 3.5-year cycle. 
 
 2025 will be year 3 of the 3.5-year Kitchin cycle.

2.) Looking at the 4-Year Presidential Cycle, 2025 (the first year) is expected to follow a pattern of a spring dip, a summer rally, and a fall crash. I believe this is the key setup for next year, followed by the second year (2026), which is typically the weakest in the 4-Year Cycle. 
 
3.) The longer 18.6-Year Cycle is entering its peaking window in 2025, or possibly 2026. We are entering year 17 of the cycle, so we should begin watching for signs of a top, such as a marquee event like the SpaceX IPO. Market tops are a process, but we should start looking for indicators like weakening economic data, deteriorating market breadth, and earnings rolling over.
 
 The 18.6-Year Cycle is peaking in 2025, or possibly 2026.
 
4.) The Decennial Cycle shows that years ending in "5" are typically the most bullish in the 10-Year Cycle and rarely have negative returns. However, I believe we may have pulled some of the gains from 2025 into 2024 (since year 4 usually experiences sideways consolidation, setting up a blow-off top in 2025). Given the strength of the Decennial Cycle, we must be mindful that the fall of 2025 could be stronger than I currently anticipate. The average seasonality for year 5 is shown in the second chart.
 
 Years ending in "5" are typically the most bullish in the 10-Year Cycle.
 
 A close-up of the typical Year 5 seasonality.

5.)
I analyzed the years within the 4-year cycle pattern and identified the 11 most similar years, based on a high correlation score and comparable structure. From this analysis, I created a composite historical projection, shown in green. I’ve also included the composite 4-year cycle for reference, and you can see that the best-matching years closely follow the typical 4-year path.
 
The green composite line represents a historical projection based on 
the 11 most similar years within the 4-year cycle pattern.

6.) The 5-Year Liquidity Cycle, proxied by the M2 year-over-year (YoY) change, is expected to peak in the second half of 2025 and then decline until late 2028 or early 2029. The Reverse Repurchase Agreement (RRP) is nearly drained, and while the Treasury General Account (TGA) could provide a temporary boost if it’s spent down, the Fed will soon halt Quantitative Tightening (QT). However, other central banks can't ease much due to the strong U.S. dollar. Maintaining historically overvalued equities will require a significant liquidity injection.
 
 Maintaining historically overvalued equities will require a significant liquidity injection.

The ideal bottom of the 5.3-year inflation cycle falls around the end of 2025. It largely depends on oil, which should begin its multi-quarter run sometime in 2025:
 
 The bottom of the ideal 5.3-year inflation cycle falls around the end of 2025.

7.) On the macro front, GDP growth is expected to peak in mid to late 2025, with rising unemployment signaling a recession in early 2026 or late 2025. The 5-year liquidity cycle is expected to peak around mid-2025 and roll over, which will create challenges for overpriced equities and crypto. The Fed’s actions regarding liquidity will be crucial, particularly if it continues supporting asset prices without real economic justification. 
 
 GDP peaking phase around mid to late 2025.

Bitcoin will experience a deep retest into a March 2025 low, followed by one more run at the 2024 highs in early summer, after which crypto will enter a multi-year bear market. In my opinion, there is a high probability that the next 4-year cycle (2026+) will be left-translated, with Saylor and MicroStrategy (MSTR) being liquidated and the Tether-fraud (USDT) likely exposed. Meanwhile, almost all altcoins will lose 99-100%. It is currently unclear whether Bitcoin will act more as a NASDAQ proxy or a monetary hedge in the years ahead. Many altcoins may have already peaked for the cycle, but some, like Ethereum (ETH), still have more upside.
 
The Dollar is likely to remain in an uptrend into 2025-26. There is a potential pullback early in the year, helping risk assets push higher, followed by a rally into spring (and a subsequent sell-off in risk assets). Then, a big correction in the USD is expected into the July-August low, which should coincide with the stock market top.
 
In the Euro, an 18-month cycle low is due and will likely occur around March 2025. The subsequent 18-month cycle is likely to be left-translated, with a drop into the 2026 four-year cycle low, targeting below parity with the dollar.
 
 EUR going to crash into 2026 low.

The Yen is expected to begin a multi-year uptrend, leading to trillions in capital flowing back to Japan in the years ahead.
 
 » ¥ strength leading to repatriation or repatriation leading to strong ¥? «
 
Bonds remain in a secular bear market, so any rally in bonds will be cyclical (driven by a growth scare or recession), followed by a significant rally in rates. A potential counter-rally in bonds is expected in Q1 2025, but it is likely to fail. The technical target for TNX is 5.5%.

Given that 2022 was the 8-year cycle low in Gold, we now have a bullish intermediate and long-term bias. There is a potential low in the spring around the 2,400 support, followed by a push higher towards 2,800–3,000+ into 2026. Central banks won’t stop buying as the war cycle and geopolitical tensions intensify, while governments debase currencies.
 
 Gold upward bias from Q2 2025 onwards.
 
Silver is expected to reach 38.00 within the next 6 quarters.

All energy should be in an uptrend over the next 6-8 quarters, with Natural Gas likely leading (reaching a new all-time high in 2026).  
 
 
The next best entry opportunity in Natural Gas is likely to occur
at the end of January to early February 2025, with a confluence of
the 100-day cycle low and the seasonal low. The above is composite
cycle chart from December 3, 2024 for reference.
 
The 3.5-YearCrude Oil cycle (left chart) is starting with long consolidation. 
Leading indicators (second chart) pointing to expansion move due in 2025-26. 
 
Crude Oil is expected to reach the 80 in the spring of 2025, then 100, and 150 by 2026. 
 
» Energy will outperform after big tech tops. «   

My Crude Oil leading indicators and cycles suggest a big move in the next 2 years, but the exact timing of the expansion is hard to pinpoint, potentially around the end of 2025 into 2026. [see also HERE]. Uranium is likely to return to 100+ in 2025, and Coal should also see gains.
 

Monday, December 16, 2024

Sir Isaac Newton's South Sea Bubble Nightmare

In 1720 Isaac Newton had the good fortune to invest early in the South Sea Bubble, making a quick and decent profit. Satisfied with his gains, he exited before the bubble fully inflated. However, as he saw his friends amass incredible wealth, he couldn't resist re-entering the market. In an attempt to make up for lost time, he invested far more—some of it borrowed—and, unfortunately, bought in just before the bubble burst. As the stock plummeted, he lost almost everything, with his investment returning to roughly the value of his initial, smaller stake. It's said that Newton, reflecting on his experience, remarked, "I can calculate the movement of heavenly bodies but not the madness of men."
 
»
There is nothing so disturbing to one's well-being and judgment as to see a friend get rich.
« 
 
Sir Isaac reportedly lost the equivalent of $4 to $5 million today, which amounted to almost the entirety of his investment in the South Sea Company. While this was a huge blow to his wealth, it did not leave him destitute, and he still maintained a fortune, though his stake in the company was essentially wiped out, losing around 90% of its value.

Friday, April 26, 2024

Does history make a case that Bitcoin has topped? | Peter L. Brandt

Judge for yourself. It’s called Exponential Decay — and it describes Bitcoin. I hate being the bearer of bad news, but data are data. The fact is that the bull market cycles in Bitcoin have lost a tremendous amount of thrust over the years. You may like the story of this data or not — but you will have to deal with it (or at least account for it, adjust for it or just plain ignore it). In fact, I don’t like the Exponential Decay occurring in Bitcoin — Bitcoin is one of my personal largest investment positions.


There have been four major bull cycles in Bitcoin, with the current advance the fifth major bull cycle [the advance from cycle low to cycle high shown in brackets].

    Dec 21, 2009 to Jun 6, 2011 [3,191X advance]
    Nov 14, 2011 to Nov 25, 2013 [572X advance]
    Aug 17, 2015 to Dec 18, 2017 [ 122X advance]
    Dec 10, 2018 to Nov 8, 2021 [ 22X advance]
    Nov 21, 2022 to xxx x,, yyyy [high so far is $73,835 registered on Mar 14, 2024]

Now, here is where Exponential Decay is showing its ugly head.

    The magnitude of the 2011-2013 was approx. 20% of the 2009-2011 cycle
    The magnitude of the 2015-2017 was approx. 20% of the 2011-2013 cycle
    The magnitude of the 2018-2021 was approx. 20% of the 2015-2017 cycle

Worded another way, 80% of the exponential energy of each successful bull market cycle has been lost. Applied forward, this would indicate that the current bull cycle will experience an an exponential advance of approximately 4.5X or so (80% of the 22X of the 2018-2021 cycle). Taking a low for the current cycle of $15,473 projects a high for this cycle of  $72,723 — guess what — a price that has already been reached.


Well, you will ask, what about the halving? Prices have exploded upwards after every previous halving. And that may happen again. But for now we need to deal with the fact of Exponential Decay. It has happened. It is real. You may not want to believe it, but I place a 25% chance that Bitcoin has already topped for this cycle.

If Bitcoin has topped, what’s next you might ask. Of course I have no clue. But, if Bitcoin has topped I would expect a decline back to the mid-$30s, or the 2021 lows. From a classical charting point of view, such a decline is the most bullish thing that could happen from a long-term view. If you want to see an example of such a chart structure, look at the Gold chart from August 2020 to March 2024.

Do I believe the analysis just presented? I don’t want to, but the data speak for itself.

 

Saturday, March 9, 2024

Bitcoin April 2024 Halving - Target 150K+ by October 2025 | Peter L. Brandt

Bitcoin halvings are strongly associated with past bull market trends in Bitcoin. Also, a strong correlation exists between the halvings and the timing of the associated bull trends. More precisely, in the past the halvings have been right at the half-way point of major bull cycles. In other words, the lengths of bull trends following the halving dates have been about equal to the length of the bull trends prior to the halving dates [...]
 
The 2022 to 2025 Bull Cycle
We know what HAS BEEN in previous bull cycles. We have confidence in what we already know. But projecting past price behavior into the future is highly speculative. The next halving is April 22, 2024. Assuming that the low of the current bull cycle was in late November 2022. That low was 75 weekly bars before the April 2024 halving.
 
If the bull trend extends 75 weekly bars beyond the next halving, a price high would occur in early October 2025. If the pace of the bull trend after April 2024 is at similar pace to the bull trend since the November 2022 low, then the high in October 2025 could be around $150,000. 
 
However, the post-halving advances during previous bull cycles have been much steeper than the pre-halving advances.
 
 
 
 
 

 

Monday, May 28, 2018

BitCoin vs Number of Up Closes (last 30 days) | At or Near Major Low

Three more down closes and the indicator at 10 would fit the pattern.

Saturday, April 14, 2018

S&P 500 Index vs BitCoin | shifted 44 Calendar Days


The correlation between Bitcoin prices shifted 44 Calendar Days into the future and the S&P 500 was discovered by Raj Time and Cycles (HERE + HERE). The correlation cycle is not perfect; it contracts and stretches ± 2 calendar days. Currently a 44 calendar day correlation points to a major high in the S&P 500 around April 17 (Tue).

Friday, May 26, 2017

Bitcoin Bubble │ Re-Emerging Asian Fever

Source: CryptoCompare BTC/USD Index
Continuing its stellar rise, and adding more than 30% to its value in just a week, on May 25 (Thu) one Bitcoin was worth USD 2,768.32, way over twice as much as one ounce of gold. After crashing more than USD 500 from its intraday highs in less then 9 hours (-18.6%), Bitcoin has bounced back USD 300 off its intraday lows extending gains into what is likely to be another frenetic Asian session. While there are numerous drivers of the recent action, 'scaling' and 'asian fever' are the greatest factors with Japanese and Korean premia exploding.


Bitcoin has risen 170% over the last three months to reach a capitalisation of USD 40 billion according to the CryptoCompare BTC/USD Index, Ethereum too has seen its market capitalisation jump 330% in the past three months to reach USD 20bn according to the CryptoCompare BTC/ETH Index. It is Japan, Korea and Asian interest that is causing the price to rise and dragging up Western prices on the back of regulatory moves as well as scaling. This is the total market capitalization of all cryptocurrencies:  

Source: CryptoCurrency Market Capitalizations

To date that has mostly meant Bitcoin, but over the last two months Bitcoin’s share of cryptocurrency capitalization has actually plummeted to less than 50%, thanks to the sharp rise of Ethereum and Ripple in particular: 

Source: CryptoCurrency Market Capitalizations

This news is the latest bit of good news for the Bitcoin: