Cycle Top Hunting: Nov 2024

This time is different...right?

G’day Folks,

Without question, the question I get the most, and the one that is on all of our minds is how high can this Bitcoin cycle go?

It always feels different at the time, but everyone knows that ‘this time is different’ are the most dangerous words in finance. Yet at the same time, this Bitcoin cycle kind of feels different.

We have the spot ETFs soaking up supply, ETF options may go live tomorrow, the US political climate has markedly improved, and MicroStrategy is buying a boatload of coins every second day. With all of these demand sinks and tailwinds in front of us, it’s not hard to believe we could bust through the diminishing return theory in the coming bull run.

Is it really different though?

Paid subscribers who have been around since June will recall that I developed the confluence indicator below as a tool to identify when the mechanics of a cycle top are in play. The idea is to identify periods when the average dude is feeling extremely rich, prices are mooning, and heavy profit taking is underway.

In this report, I want to revisit this chart, and explore each of the core components to ascertain how close we might be to conditions which established cycle tops in the past.

If market conditions walk, talk, and quack like a top, it’s probably a good idea to at least take it seriously. At the very least, this methodology orients us towards how many minutes we have left in the game, or if we’re already into injury time.

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