Where are we in the market cycle?

Since 2013, Bitcoin has produced mixed results in November.

However, the halving years have been generally delivered strong performances.

In November 2020, BTC produced a staggering 43% gain. In 2016 November, BTC could only do 5%. We can expect BTC to behave more like 2020 rather than 2016.

There are many reasons for this. The macro conditions are still valid.

Apart from the general macro conditions, there has been a gradual increase in the Bitcoin ETF and BlackRock accumulation.

We can expect this trend to continue in November, especially if Trump is elected President.

The crypto market traditionally operates in four distinct phases:

• Accumulation - Prices stabilize following a downtrend, and long-term investors quietly begin buying assets at lower prices - Dominant sentiment: Uncertainty

• Markup - Prices rise as demand increases, often accompanied by media coverage, which attracts retail investors. - Dominant sentiment: Greed

• Distribution - Prices peak, and early investors begin to sell. This phase is usually characterized by high volume and low volatility. - Dominant sentiment: FOMO

• Downtrend - The market corrects downward as supply exceeds demand, leading to widespread fear, selling pressure, and volatility. - Dominant sentiment: Fear

Now, let’s check the Fear and Greed chart.

The sentiment is Greed now. So, we are in the Markup Phase. The problem is that only BTC is pumping.

• ETH - not performing

• High Caps - not performing

• Retail Coins - not performing

• Memecoins - not performing

• Bitcoin Dominance - growing high

We know that the Bitcoin Dominance is growing. This is why altcoins are not performing well.

The top 10 coins Dominance chart tells a different story.

Notice how the top 10 coins drop until Bitcoin makes a strong high. Once Bitcoin establishes that high, the money rotates to altcoins. So, this is what is going to happen. Bitcoin needs to establish a clear, strong high first.

The smart money will definitely rotate. However, they should feel that the opportunities in their BTC holdings should come down.

When will this happen?

BTC need to register a new All Time High.

So, we have to be patient.

Bitcoin’s market dominance has risen to around 60%, a level not seen since the previous bull run. Historically, such dominance levels indicate a flight-to-safety sentiment, where investors prefer Bitcoin over altcoins amid uncertain or transitional market conditions.

The inability of ETH to perform signals a potential distribution pattern.

However, this is because of the low participation rate of retail investors.

Imagine this. A whale wants to pump a coin. The whale will buy it with volume on resistance levels. Retail will follow the whale and price move. At a certain point, the whale needs to sell. Now, the problem for the whale is about finding liquidity to sell.

If there is nobody to buy, how can the whale exit without causing a black swan event?

So, whales calculate the possibility of liquidity at a certain level before actually buying.

Now, whales are looking for that liquidity. This certainty about liquidity can come once the long-term economic direction is finalized. It will happen after the US election result.

Please refer to our report on the US Election here: What happens to crypto if Kamala Harris wins the election?

Market rallies often occur after election years, particularly after regulatory shifts.

In 2020, Bitcoin surged from $13,000 to $65,000 as regulatory clarity and fiscal stimulus boosted investor confidence.

In 2024, we have another chance at this. China is planning fiscal stimulus, and Trump is promising regulatory clarity.

There is another factor in play; Fed Interest Rates. Historically, rate cuts have been favorable for high-risk assets.

The Federal Reserve is expected to cut interest rates. They have started already. Further rate cuts will increase liquidity and reduce borrowing costs.

Inflation is also a key player.

With inflation concerns ongoing, Bitcoin’s positioning as a digital “gold” may gain traction. Institutional investors have shown an increasing interest in Bitcoin as a hedge against inflation. This is evident from the increase in ETF flows.

There are multiple phases in any peak bull run.

• Phase One: Bitcoin Rally

• Phase Two—Capital Rotation: As Bitcoin struggles to pump more capital, some capital is likely to flow into Ethereum, sparking significant price movements for ETH.

• Phase Three—High-Cap Altcoins: Following Ethereum’s rise, high-cap altcoins are projected to rally. This phase may see substantial price increases for the top 20 cryptos, driven by renewed retail interest and potentially favorable post-election policies.

• Phase Four – Retail Influx and Altcoin Season: Retail participation typically peaks at the end of a bull market, creating an “alt season” where smaller coins experience sharp price spikes. This phase is often chaotic, with increased volatility and speculative trades.

• Phase Five - Bear Market Begins: High volatility, reduced volumes, and a spike in panic selling would indicate the beginning of a new bear cycle.

We are stuck in Phase 1. Phase 4 started prematurely and ended likewise.

So wen rally? Let Bitcoin complete its dance. Now is the time for BTC to shine. Let us wait: Timing is Everything.