About the author
Lark Davis is one of the most popular crypto influencers of our time, with an audience of more than half a million people. In this article, we collected the most important takeaways from his recent appearance, Lark taking about what can we learn from previous bitcoin cycles, and what lies ahead for the 2024 cycle. This summary was written by Andrew J Sheffield.
Navigating Bitcoin’s Market Cycles: A Historical Perspective and Current Analysis
As Bitcoin’s market continues to evolve, investors often look to past cycles for insights into what the future might hold. Reflecting on the tumultuous events of 2021 and earlier cycles, it’s clear that understanding historical patterns can offer valuable clues about what to expect next.
Lessons from 2013: The Double Bubble
The year 2013 stands out as a time of extreme volatility and rapid price movements for Bitcoin. After a meteoric rise, Bitcoin experienced a brutal crash, only to surge again, creating what became known as the “double bubble.” Despite the rollercoaster ride, this period saw Bitcoin’s value increase almost 100-fold within a year, highlighting the potential for significant gains but also the inherent risks of such volatile markets.
Technical indicators such as the Relative Strength Index (RSI) and Relative Volatility Index (RVI) offer valuable insights into market sentiment and potential turning points.
The early 2013 RSI shot up in a straight line to almost 100. Currently, we’re seeing different behavior. After reaching a 76 reading this spring, the monthly RSI corrected and is now retesting the 70 level.
Comparing Cycles: 2013 vs. 2017 vs. 2021
Each Bitcoin cycle has exhibited unique characteristics. While the 2013 cycle featured sharp, exponential growth followed by steep corrections, the 2017 cycle saw a more prolonged period of overbought conditions, leading to a single peak. In contrast, the 2021 cycle surprised many with its lackluster price action, challenging the notion of every peak being a blow-off top.
In previous cycles, the top came roughly 500 days after the halving. Translated to the current cycle, this would put us roughly in September 2025 for a bull market top.
What Lies Ahead?
As Bitcoin continues its ascent, investors must remain vigilant and adaptable. While historical patterns offer guidance, the market’s capacity for surprises means that flexibility and preparedness are essential.
We’re not going to have a 75% bear market correction because of the maturation of Bitcoin
Whether it’s a double top, a super cycle, or an entirely new paradigm, embrace all possible outcomes that might occur.
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