(Kitco News) – The crypto market found itself on shaky ground in early trading on Monday as Bitcoin (BTC) continues to struggle in the lower $60,000 range, while a warning from one prominent analyst suggests that the bull market may have peaked – which has some traders heading for the exits.
Data provided by TradingView shows that Bitcoin has set a series of lower highs and lower lows since last Wednesday, bottoming out at $61,755 on Monday morning amid rising macroeconomic concerns.
BTC/USD Chart by TradingView
At the time of writing, Bitcoin trades at $62,980, a decrease of 0.8% on the 24-hour chart.
Analysis from veteran chartist Peter Brandt is making the rounds in crypto social media circles as his once bullish outlook for Bitcoin has flipped bearish, with Brandt suggesting that Bitcoin’s rise may have reached its peak.
In February, Brandt predicted that the bull market cycle that started in November 2022 could extend until September 2025 and see Bitcoin hit a high of $200,000. But that was before taking into account a statistical concept called “exponential decay,” which is the reduction of an amount by a consistent percentage rate over a period.
“The fact is that the bull market cycles in Bitcoin have lost a tremendous amount of thrust over the years,” Brandt said. “Bitcoin has historically traded within an approximately 4yr bull/bear cycle, often associated with the halving events. There have been three major bull market cycles since the initial bull cycle and each cycle has been 80% less powerful than its predecessor in terms of the price multiple gained.”
“If the statistical constant of the 80% decay holds true, the [record] high in Bitcoin of $73,835 of March 14, 2024, has already reached a price consistent with the historical Exponential Decay,” he added.
As shown in the chart above, each cycle has seen the magnitude of Bitcoin’s price increase decline, consistently suffering a roughly 80% exponential decay. King Crypto’s rally to a new record high in March represented a 79.1% increase from its low of $15,475 reached in November 2022.
If the exponential decay theory is correct, this bull market could be finished, setting the stage for the next crypto winter to set in.
“If Bitcoin has topped, what’s next you might ask,” Brandt said. “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 Aug 2020 to Mar 2024.
“Do I believe the analysis just presented? I don’t want to, but the data speak for itself,” Brandt said. “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.”
But as experienced crypto traders will point out, Bitcoin’s price doesn’t usually peak until six to eighteen months after the halving, which occurred on April 20, and most still expect significant upside.
This includes Brandt, who, according to a separate post, still sees a six-figure BTC price before this cycle is said and done.
“The ‘Pre/Post Halving’ cycle construct would suggest that the current bull trend will reach a top in the $140,000 to $160,000 range sometime in late summer/early fall 2025,” Brandt said while noting that the exponential theory remains on his radar until evidence emerges that “such decay will not influence the bull trend that began in November 2022.”
Note that I assigned a 25% probability to my analysis. I give more credence to a report I issued in February. Here is a chart from that analysis — projecting a bull market until Sep/Oct 2025 https://t.co/hiSogUtEkt pic.twitter.com/Y5I8g5JWwa
— Peter Brandt (@PeterLBrandt) April 29, 2024
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