A Full Circle Moment For The Crypto Market?

About a year ago today I learned one of the most valuable lessons of my life as a trader.

I was speaking with a mentor of mine, someone who I respected very much and who had a great career trading billions of dollars a day on Wall Street. At the time, I was still finding my feet in this business and I was seeking confirmation bias from others. I wanted to know what he thought about the crypto market and what he thought about the current price action.

For those of you that were in the market at that time or remember, it was eerily similar to where we are today. But, more on that in a minute.

In short, he proceeded to tell me to sell all of my crypto holdings and that it would go nowhere for another 10 years. Now, that may not sound like all that big a deal to you but, when you hear that from not only a mentor of yours, but a great trader in their own right it creates an enormous mental conflict.

Was I going to be right?

Or was the guy that had a 30 year career trading with some of the best in the business going to be right?

It was an extremely tough time in the market and the decision would prove to be critical. After a five month range and death by a thousand cuts many people were throwing in the towel on bitcoin. Stocks had staged a great run meanwhile crypto seemed like it was on life support.

Then, for nearly a month from mid August, to mid September the market traded virtually no where. BTC traded in a one thousand point range while bulls and bears both got chopped to pieces.

Sound familiar? I think so. The market today is in the exact same position as it was then. What happened in the next six months was a tripling of the BTC price as it went from 25k to nearly 75k. But, in order for us to get there, everyone including the best analysts had to be fooled by the lackluster price action.

It’s the exact reason why we put so much emphasis on time and not as much on price. Price action will, at one point or another, fool everyone. Time will not.

There is a common saying about life coming full circle. A full circle moment is when life undergoes a series of changes or events and then returns back to its original state or position. I believe that is what we are seeing once again today in this market.

We talk a lot about time by degrees and time frames but one of particular important is the number 360. There are 360 degrees in a circle and therefore the reasoning behind Gann’s 360 degrees in a year. A cycle is just another word for circle.

It just so happens that this week on Thursday we will be 360 degrees from the low of September 11th 2023 where BTC began its slow ascent to 74k from 25k.

At the same time, price action has been almost identical coming off a five month range into a near standstill while more and more prominent bulls begin to truly question their thesis.

Even the sentiment is much worse this year than last year with price trading at over double what it was a year ago. Fear is at 26 right now opposed to last year at this time it was at 40. I believe this is once again setting up the perfect bear trap.

Take a look at the monthly chart below. Not only is time lining up perfectly with this but look at the RSI. Every single cycle at this same point in time it hits this exact level on the high time frame chart just before it begins its parabolic ascent.

Now, I know a lot of people may say that I was big on the monthly close being over 60.6k but let me show you why, after further evaluation, I will trust time more than price here.

Again, look at the monthly chart below and see how price fooled everyone last year. Very much like this August, price closed below the blue line which marks the monthly swing low of the summer range. Price trapped everyone there and then September was slow before the breakout month of October.

We are seeing a very similar trap here with BTC taking out that key level of 60.6k on the monthly. Last year it did the same thing and resulted in a bear trap.

So, I maintain my bullish outlook for Q4 and in fact, I think the sentiment getting this bad is even more bullish than last years set up. This market does not reward greed it rewards patience and conviction.

I believe we are having a full circle moment right on our 360 degree date. There is a lot of time confluence here on September 5th and 6th so I fully expect the market to change trend at the end of the week. We likely won’t get a dramatic rally until October because even the greedy leverage longing bulls need to be shaken out but this is where our memory and understanding of cycles can be invaluable to our decision making.