Bob Loukas, a veteran crypto analyst, says Bitcoin is at the end of the current cycle. However he warns that it may need one more leg down before the cycle bottom can be established.
The latest installment of his “4-Year Journey” Loukas, in an update published on Friday June 4, framed Bitcoin’s recent return to its February lows more as a predictable development than a deviation from cycle behavior. He said that Bitcoin’s recovery into May when the price reached low $80,000 after a fall toward $60,000. looked like a contratrend movement within a larger bear-market structure.
“A cycle very rarely, and I mean less than 10%, probably more like 5%, will end very early and also on the first significant decline from the high,” Loukas said. “There’s always a retest. There’s generally always a lower low, at least one lower low, if not a second lower low.”
Loukas says Bitcoin peaked at the end of October. It then fell below its moving 10-month average. He interprets this as confirmation that a previous cycle has ended. The subsequent decline into FebruaryHe said that a relief rally was then followed, which attracted bulls who expected a quick continuation to the previous highs. The rally stopped at around $83,000 (close to his $85,000 target) before Bitcoin reversed its direction and plunged roughly 25% toward February’s lows.
Loukas Begins Reaccumulating Bitcoin
Loukas, who maintains that Bitcoin has not yet reached its lowest point in the cycle, said his portfolio model made its first purchase action in over three-and-a-half years. It added 10 BTC to the portfolio at $65,000, increasing its Bitcoin allocation from 58% to 41%. He said that this was not to say that the bottom had already been reached, but that it was an effort to start reaccumulating Bitcoins at more favorable levels over the long term.
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Loukas believes that $53,000 is the current key level. Loukas said that, should Bitcoin reach that point, the portfolio model will use any remaining cash in order to get back to its full Bitcoin allocation. It is significant because the level roughly corresponds with the midpoint in the larger four-year cycle.
“Currently, what I’m thinking is the best strategy, and this is always subject to change, is that at the $53,000 level, all cash that remains to buy the remaining Bitcoin and get back to a 100% allocation,” Loukas said. “At the $53,000 level, we’re tagging the midpoint of the entire four-year cycle.”
The Bitcoin expert acknowledged that the $53,000 figure may seem extreme, but said it was not. According to him, this would mean a further 15% decline from the current level, and Bitcoin was already down about $20,000 within the previous two-three weeks. He noted past bear markets have produced larger declines. For example, a 77% drop from peak to trough in the 2021–2022 cycleThe current withdrawal is between 51% and 52%.
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Loukas told me that the 65%-70 % drawdown was not a forecast, but “shouldn’t become a surprise” Bitcoin has a history of volatility. According to his estimation, a move from $53,000 to $53,000 would represent a 57% drop in value from the previous cycle high.
The final cycle window opens
Loukas was more optimistic. He stated that the current retest created the first credible opportunity of a smaller four-year cycles low. double bottom Before a base in late summer, and an later push over the highs of May. This outcome was given a low probability, around 25%.
The base argument remains that Bitcoin’s cycle low will form around the time frame of October, November or December. Loukas stated that Bitcoin has entered the 43rd month of its cycle and is entering the zone where four-year-lows usually emerge between the average 47 to 48 months.
“The window has been hit,” Loukas said. “The four-year cycle now is getting close or getting towards an end. But as I mentioned before, this is not any different to prior cycles.”
Loukas believes that Bitcoin will bounce in the short term and possibly towards the 10-week average of $73,000 before it resumes its downward trend. Loukas also said that Bitcoin shouldn’t trade above the high of May near $83,000-$85,000 in the coming months, unless there is already a new trend.
BTC was trading at $62,247 as of the time this article went to press.
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Source: www.newsbtc.com
