Bitcoin Mid-term Plot Speculation Bull Market Cycle Established, Pullback is an Opportunity

Established Bull Market Cycle for Bitcoin Seizing the Opportunity of a Mid-term Pullback for Speculation

Introduction:

• BTC breaks $40,000, our previous expectations have been met. BTC and ETH have entered a bull market structure at the chip level, indicating that a new bull market cycle has begun.
• There will definitely be adjustments to clear profit and high leverage. The target is to reset the cost above $30,000. A reasonable correction level is around $35,000.
• The key time points for larger corrections are the January ETF decision, the April halving, and possible ETF approval in June. Especially in January, regardless of the ETF outcome, the market may decline.
• The true bull market will start after the April halving and June ETF decision. We should focus on the December correction window to reposition ourselves.

This article is MVC’s commentary on the December cryptocurrency market trends.

In MVC’s November monthly report, we believed that BTC breaking $30,000 means it will reach $40,000. With BTC surpassing $40,000, our expectations have been fulfilled. ETH has also crossed the weekly MA120 and both BTC and ETH have entered a bull market structure at the chip level, indicating that a new bull market cycle has begun.

For positions that have already bought spot below $28,000 for BTC and below $1,700 for ETH, and intend to hold for the long term, I suggest moving these positions to a cold wallet now, closing your eyes and not looking at them until after 2025.

As for the question that everyone is most concerned about now, is there still going to be a correction, and when will it happen? I believe this is not the right question. There will definitely be a correction, but the real question is, when a 20-30% correction comes, are you brave enough to go all-in?

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• The trend is set, and we are in the midst of a new bull market cycle for BTC.

In the early stages of market development, the situation is always full of twists and turns. We believe that the monthly medium-term market from early October to the present is already 85% complete. BTC and ETH are very clearly entering an accelerated sprint trend. The specific price target of the sprint is not very important. It is not surprising if the final 20% of the sprint reaches $45,000, or if it suddenly stops at $42,000. Predicting this specific top has no meaning.

As for the adjustment, there will definitely be one. Market excitement has already reached its peak, with BitMEX funding and premium nearing their emotional peaks. From the perspective of profit ratios from chips, the current on-chain BTC profit level is similar to that of July and October 2020. Short-term profitable positions are at a high level, so we need to recognize that there will definitely be an adjustment and understand the main purpose of this adjustment: to clear profit and high leverage, further stabilizing chips before the main bull market rise.

Looking at the expected time for the adjustment, we believe that there are only three key time points to focus on in the next six months: **the mid-January BTC ETF approval, the halving in April, and the BTC ETF approval in June.** Purely from a time perspective, if the ETF is approved in January, the expected result will be realized and there will be a significant correction. If the ETF is further delayed in January, the expectation will be shattered, leading to profit-taking, and the outcome will still be a correction. So purely based on this January milestone, regardless of whether the ETF is approved or not, we believe the market will definitely decline.

If we look a little further ahead, when the ETF results come out in January and the market undergoes a correction, it will slowly climb until the halving in June, when we will see the second systematic adjustment. Based on our belief that the ETF will definitely be approved, it is highly likely that June will be the final approval node, and therefore, June will also provide a last opportunity to get on board before the bull market starts. However, June is too far away, so we need to focus on the correction window after the mid-term market accelerates to its peak at the end of December, which is the most important positioning window.

In terms of the target space for the correction, the majority of the long-term chips on the chain currently have a cost concentrated around the range of 28,000-30,000. The price has already deviated from this key cost zone, so the correction will most likely be completed through the profit-taking of these chips, repairing the long-term cost. The nature of the correction will be similar to that of March to December 2020, where it involves profit-taking and leverage cleaning, allowing the long-term cost of the chips to settle above 30,000. Therefore, the maximum potential for correction is around the weekly WMA120 level at $32,000 (a dream scenario), and the reasonable correction level is around $35,000. This is also the cost zone for all chasing chips after the false news breakout of BTC.

Looking back at the market trends over the past two months from October to present, many people feel that there seems to be a lack of a clear absolute main trend. The initial rebound in early November was mainly based on the logic of chip structure. Many tokens experienced a violent decline due to the collapse of FTX at the end of 2022, creating a huge chip vacuum, such as Matic. The current rebound is reclaiming the chip vacuum range from the end of 2022. Many tokens have completed a 10-month accumulation phase, such as Sol/Link/DYDX, showing a solid bottom. Or they are newly listed coins on major exchanges, such as Tia/Pyth. At this stage, many experienced investors who have been through cycles often feel like they are in a chaotic rush, as if there is no truly new thing emerging. This also corresponds to the characteristics of thematic rotation during a rebound from the bottom.

However, in the mid-to-late November, the market funds found three themes that can be considered as main trends: the BTC ecosystem represented by Ordi, gaming, and AI. These three themes are starting to evolve into main race tracks.

Although many tokens have risen significantly, we believe that these three themes are still in the early stages, and they are currently in a somewhat chaotic state. If you manage to buy them, you will profit, but if you haven’t, there is no need to worry. The current market’s speculation on these themes is more like meme logic, with different IQ groups favoring different meme themes. IQ10 and IQ150 speculate on Ordi (and sometimes include DePin), IQ100 speculates on AI, IQ50 speculates on gaming, and there are even many elites from hedge funds who stick to Perp Dex and old DeFi using calculators. Chinese people speculate on inscriptions, Europeans and Americans speculate on POW and Sol ecosystems, Koreans go for LUNC, each with their own meme (no offense intended, I consider myself part of the IQ50 group).

A thousand words are condensed into a phrase “still early”. Let’s enjoy the joy of the accelerating wave for now. The current ups and downs are just the initial stage of the bull market, with plenty of opportunities ahead. When January-February comes, we can carefully cast our nets and catch the big fish. As for the macroeconomic factors, interest rate cuts, and the complexities of the US stock market, we have been emphasizing since January 2023 that these are not important, nor the main contradictions. Inherent cryptocurrency cycles always require attention to the natural innovation within the industry, and funds will naturally follow.

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