Bitcoin…the more things change…the more they stay the same. Bitcoin goes through cycles,
which are very similar when you chart them out,
but the reasons for the pumps and dumps are very different. People always want to say…but
this time it’s different. But all I do is go back to the charts…so are you ready to time
Bitcoin’s bottom? Well you don’t really have a choice…because it’s time for Chico Crypto!!
Yup, there is no doubt the bears have taken over once again….the 2 week chart of Bitcoin
looks disgustingly bearish…retracing from above 24k all the way down to just below
20k..breaking that critical support. This has traders and investors freaked out…saying we are
going to dump some more, and the Bitcoin bottom isn’t in…while 2 weeks ago they were all BULLISH.
Well I haven’t changed my opinion…I have been saying that Bitcoin hasn’t bottomed out…and I
have had a feeling that this bottom is coming next month, in September…which begins tomorrow.
But before we get into analyzing previous Bitcoin cycles to estimate the exact day BTC will bottom
and at what price…we need to look into the reasons on why September could be a very bearish month.
Number 1, September, historically, is Bitcoin’s worst month. Since 2013,
7 of the last 9 Septembers have been bearishly red, with the last 5 years since 2017
being consecutive RED. As we can see from this chart of Bitcoin returns by month, September is
dead last…meaning September is normally a really BAD month…
Now, what could be the reasons for this RED? BTC just isn’t going to DUMP for no reason.
Well September is a month with many important days in the macro world of finance.
The first important date? It’s in 2 weeks, on September 13th. Checking out the Consumer
Price Index calendar, this day is when the August inflation numbers come out…
This is a very important inflation reading, as last month’s reading for July cooled down to
8.5 percent, after a record was set for June of 9.1 percent. The markets want inflation
to keep cooling, not have another rebound of inflation like we had after April’s reading.
So what is going to happen on September 13th? Will inflation rise, will inflation fall,
or will it stay the same? Well we have had a few inflation readings for August already…Germany
was one of the first to release, and their inflation rose back to 7.9 percent,
after 2 months of cooling off. The next reading was fromSpain, and their inflation cooled off,
down to 10.4 percent after 4 straight months of increases. The only other reading so
far was from Belgium, and their inflation rose again, after cooling off last month…
1 eurozone country has fallen, while 2 have risen. Is it possible US inflation
follows the overall trend and rises? Well what are the people thinking? You can
actually BET on the inflation reading on Kalshi, and the majority of people,
71 percent of them, think that inflation won’t rise in August…
This is because the average consumer is more confident….checking out the consumer confidence
index…it rose in this month in August for the first time since August of last year!! And this
has a lot to do with the falling gas prices, which continued to plummet throughout August from a US
average of 4.18 cents per gallon, down to $3.81..a nearly 9 percent decrease in just a month.
Will falling energy prices be enough to keep inflation from rising?
Only time will tell…but in my opinion, it’s a coin flip…and the markets do not like uncertainty…
The next major day in September which could rattle the markets
comes just 1 week after the CPI data…on September 21st,
the FED will announce their interest rate decision at the next FOMC meeting.
Now, the FED has been extremely hawkish the past 2 FOMC meeting, raising it by an aggressive 75
basis points for the last 2 meetings. Now after this meeting and Powell’s remarks,
the majority consensus was that these interest rate increases would slow. From this bloomberg
article, top economists surveyed said “They expect the Federal Open Market Committee
to lift rates by a half percentage point in September, then shift to quarter-point
hikes at the remaining two meetings of the year. That would lift the upper range of the
central bank’s policy target to 3.5% by the end of 2022, the highest level since early 2008.”
And the markets loved the idea of a coming slowdown,
it’s one of the reasons the stock market and crypto was doing so well post FOMC in late July…
Well homeboy Jerome, decided to freak the markets out…just last week
he spoke at Jackson Hole on inflation and the economy…let’s listen in to what he had to say…
They are adjusting their policy to be purposely restrictive,
to get inflation down to the target 2 percent…how? Well let's continue..
He hints that another unusually large rate increase could be coming at this
September meeting…unusually large like another 75 basis point raise??
So my friends, this month could be a serious 1-2 punch to the financial world gut.
If inflation doesn’t drop, and stays neutral or rises…we can almost guarantee the FED will
be doing another 75 point raise…and even if it drops, this type of raise is still on the table…
Sooo now let's talk about a possible Bitcoin bottom coming this month in September as we
have the reasons which could trigger a fall…
And I like to look at history to figure this out…because
the more things change, the more they stay the same…
In Bitcoin’s first cycle, the peak came on June 9th 2011…the bottom of that cycle came
that same year, in November on the 19th. This was a top to bottom of just 164 days.
In Bitcoin’s next cycle, the top came on December 5th 2013…and the bottom for this cycle
didn’t come until January 15th 2015. This was a top to bottom of 407 days. Next we have the
3rd cycle…The peak for this one happened on December 17th 2017, and the bottom for this
one came nearly a full year later, on December 16th 2018…this was a top to bottom of 364 days.
So cycle 1 top to bottom was 164 days, cycle 2 was 407 days, and cycle 3 was 364 days.
Pretty dang wide range of dates, so I would just take the average. The average
of these 3 numbers? It’s about 312 days. If this cycle’s peak was hit on November 10th 2021….312
days later would be September 18th…just before the FED FOMC meeting…
But this isn’t the first time I have predicted around this date…using Bitcoin halving data,
back in May of this year, I predicted the bottom coming just after the meeting…September 23rd.
But what could the price be for this bottom? Will the 20k level HODL,
will 17.5k HODL…or could we go even lower??
Well I just want to replay a clip from May, using previous cycles…where I predicted the
bottom…because I don’t often change my opinions.
I predicted based on previous cycles percent drawdown,
that this cycle’s bottom would be about $14500 dollars….
Although there is another way to possibly predict what the bottom could be this month.
Going back to percent drawdowns in September, we could just take the average of all months.
Adding them all up, and dividing by 9 we get an average decline of 5.92 percent.
Lets just say August ends at 20k, a 5.92 percent decrease from this would give us about 18,800
dollars. So you heard it here first…Bitcoin will find it’s September bottom between the
18th and 23rd of next month, and the price will be somewhere between 14500
and 18800. Cheers viewers, I'll see you next time!