CentralCrypto
Cycle 4 could be divergent from the last three ?
Today I'm going to show a study based on "Logarithmic Growth Scale" to understand where we are within cycle 4 and how we are compared to other past cycles. As we know, in graphic analysis all movements happen in "waves" and this behavior tends to create cycles where we can insert ourselves in a context to understand what kind of movement we are doing. Will an asset in which we have only 3 complete cycles really behave the same in the next cycles? The fourth cycle shows that perhaps not. But to what extent this "maybe not" can be due to "Black Swan" events? To answer that I am analyzing the "Logarithmic Growth Scale". The scale shows the magnitude of growth in exponential order, in other words, that counts the exponent. Ex. 10^-2 < 10^-1 < 10^0 < 10^1 < 10^2 < 10^3 and so on. This serves to normalize very large values and determine the growth of the object of study (BTC in this case). In the first image, I present the scale with the defined BTC cycles. On the right we project the basic lines of the Fibonacci projection (0.0, 0.5 and 1.0) as a reference. Note that the bottom line is the 0.236 line below the zero line, that is, the projection goes both up and down. The first detail noted is the break below the 0.0 that happened in May/22 from which we haven't left again until today. This breakout brought us below the first relevant line of a Fibo Retracement and represents that BTC has gone off the growth scale. The image 2 projects the growth in cycle 1 (461% - magnitude 10^2) and in cycle 2 5700% (magnitude of 10^3). In the third cycle, we see a deceleration process but still maintaining the same magnitude (10^3 w/ 1542% growth). And for the cycle4, we see the first decrease in magnitude of this model, where until now there's 272% growth. Conclusion: It's still too early to determine whether this is indeed a pattern. But there is evidence that the current cycle is already divergent from the others. It is also evident that Bitcoin has effectively stopped growing.