History of Bitcoin bull market corrections since 2015
Here is an update upon numerous requests
The Public Blog site
Does history make a case that Bitcoin has topped?
Judge for yourself
It’s called Exponential Decay — and it describes Bitcoin
I hate being the bearer of bad news, but data are data.
The fact is that the bull market cycles in Bitcoin have lost a tremendous amount of thrust over the years. You may like the story of this data or not — but you will have to deal with it (or at least account for it, adjust for it or just plain ignore it). In fact, I don’t like the Exponential Decay occurring in Bitcoin — Bitcoin is one of my personal largest investment positions.
There have been four major bull cycles in Bitcoin, with the current advance the fifth major bull cycle [the advance from cycle low to cycle high shown in brackets].
- Dec 21, 2009 to Jun 6, 2011 [3,191X advance]
- Nov 14, 2011 to Nov 25, 2013 [572X advance]
- Aug 17, 2015 to Dec 18, 2017 [ 122X advance]
- Dec 10, 2018 to Nov 8, 2021 [ 22X advance]
- Nov 21, 2022 to xxx x,, yyyy [high so far is $73,835 registered on Mar 14, 2024]
Now, here is where Exponential Decay is showing its ugly head.
- The magnitude of the 2011-2013 was approx. 20% of the 2009-2011 cycle
- The magnitude of the 2015-2017 was approx. 20% of the 2011-2013 cycle
- The magnitude of the 2018-2021 was approx. 20% of the 2015-2017 cycle
Worded another way, 80% of the exponential energy of each successful bull market cycle has been lost.
Applied forward, this would indicate that the current bull cycle will experience an an exponential advance of approximately 4.5X or so (80% of the 22X of the 2018-2021 cycle).
Taking a low for the current cycle of $15,473 projects a high for this cycle of $72,723 — guess what — a price that has already been reached.
Well, you will ask, what about the halving? Prices have exploded upwards after every previous halving. And that may happen again.
But for now we need to deal with the fact of Exponential Decay. It has happened. It is real. You may not want to believe it, but I place a 25% chance that Bitcoin has already topped for this cycle.
If Bitcoin has topped, what’s next you might ask. Of course I have no clue. But, if Bitcoin has topped I would expect a decline back to the mid-$30s, or the 2021 lows. From a classical charting point of view, such a decline is the most bullish thing that could happen from a long-term view. If you want to see an example of such a chart structure, look at the Gold chart from Aug 2020 to Mar 2024.
Do I believe the analysis just presented? I don’t want to, but the data speak for itself.
End
Factor Update, April 6, 2024
This report was shared with Factor Members on April 6, 2024. Enjoy!
FactorUpdate-April-6-2024.pdf
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- Trading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
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- Factor Report Educational Papers: Periodic educational and instructional documents
View your Factor Member options here. You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work. My goal is to shoot straight on what trading is all about.
I hope you will consider joining the Factor community.
Trading secrets revealed for the first time ever – available for only the next 60 minutes
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The scammers who promise you such things are total frauds
Paper on Bitcoin Halving Cycles
Enjoy
Become a Factor Member
Members receive:
- Trading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
- The Weekend: Thoughts on a Sunday (Weekend) Afternoon / Factor Update
- Private Twitter Page: Real-time alerts on interesting charts and observations, member dialog, the process of trading, the human aspect of trading, and risk/trade management
- Webinars: Periodic member-only webinars where Peter speaks about current conditions and fields member questions
- Knowledge Center: Fast and easy access to current and archived content from Peter’s extensive library of trading content
- Automatic notifications: Email and social media notifications are sent out when new content is published
- Factor Report Educational Papers: Periodic educational and instructional documents
View your Factor Member options here. You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work. My goal is to shoot straight on what trading is all about.
I hope you will consider joining the Factor community.
A correct understanding of “rate-of-return”
The lack of understanding of trading performance is wider than I imagined
On January 29, 2024 I posted on “X” the polling Tweet shown below.
The wording was intended to reveal the faulty understanding of performance by the majority of social media participants.
Faulty indeed!!
81% of the 1,553 respondents answered wrong.
The trade produced a 6% rate on capital.
Anyone who monitors Twitter is accustomed to such claims as:
-
- “Trade delivered 10x profit”
- “120% return in one-week”
My response to such claims is always: Bull Crap!
The profit/loss and risk of a trade MUST always be expressed as a percent of the composite value of the entire amount of capital from which the trade was made. In the example of the polling question, the two datum points attributable to performance are:
- Investment of $12,000 to purchase 400 shares of XYZ
- A profit of $6,000 or $15 per share
The percent change of the underlying asset does NOT represent the rate of return.
The profit as a percent of the margined position does NOT represent the rate of return.
I repeat — the risk AND profit/loss of a trade must be calculated in relationship to the total actual or nominal value of a trading/investment account.
Let me unpack an actual example from the prop account of my company, Factor Trading. For the sake of this argument, assume that my trading account has a total nominal value of $1 million.
On January 9 I shorted seven contracts of May 2024 Soybeans at 12.85. The underlying value of this trade (35,000 bushels) was $449,750. The margin requirement to carry this trade was $28,910 (keep in mind that the CME sets a minimum margin requirement per contract but each FCM can require more).
I covered the trade today at a price of $12.23, or a profit per bushel of 62 cents. So, the total profit of the trade was $21,700.
Based on the answers to the poll (above), 26% of respondents would have pegged the rate of return of this trade at 75% (21,700/28,910) — and this answer would be wrong.
And 42% of respondents would have pegged the rate of return at 4.8% (.62/12.85) — and this also would be wrong.
Repeating once again — rate of return (and risk) must be expressed as a percent of the total account capitalization, so a profit of $28,910 represented a return of 2.9% (or 290 basis points), derived from dividing the profit of $28,910 by the total nominal capitalization of $1,000,000.
To conclude, rate of return should NOT be calculated based on the profit/loss as a percent of the change of the underlying asset or as a percent of the margin used.
Yet follow Twitter in the days ahead and see how many braggard traders misreport the return of their trades.
One final note — if a Commodity Trading Advisor or investment manager were to report performance in any other way than explained, the NFA/CFTC or SEC would severely judge such reporting as misleading and subject to a monetary fine.
End
Become a Factor Member
Members receive:
- Trading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
- The Weekend: Thoughts on a Sunday (Weekend) Afternoon / Factor Update
- Private Twitter Page: Real-time alerts on interesting charts and observations, member dialog, the process of trading, the human aspect of trading, and risk/trade management
- Webinars: Periodic member-only webinars where Peter speaks about current conditions and fields member questions
- Knowledge Center: Fast and easy access to current and archived content from Peter’s extensive library of trading content
- Automatic notifications: Email and social media notifications are sent out when new content is published
- Factor Report Educational Papers: Periodic educational and instructional documents
View your Factor Member options here. You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work. My goal is to shoot straight on what trading is all about.
I hope you will consider joining the Factor community.
Obstacles facing Ethereum ETH
While Ethereum has shown significant growth and potential, there are several factors that could potentially hinder its price appreciation in the future. It’s important to understand that the cryptocurrency market is highly volatile and influenced by a wide range of factors, both internal and external to the Ethereum network. Here are some reasons that might work against Ethereum’s price growth:
- Technical Challenges: Ethereum faces ongoing technical challenges, including scalability issues. While Ethereum 2.0 aims to address these through sharding and a transition to proof of stake, any delays or problems in this upgrade could negatively impact investor confidence and the price.
- Regulatory Risks: Cryptocurrencies are subject to a rapidly evolving regulatory landscape. Increased regulatory scrutiny or unfavorable policies could impact the adoption and price of Ethereum, as governments might impose restrictions on its use or trading.
- Competition: The rise of other blockchain platforms that offer similar or improved functionalities, such as Litecoin, Cardano, Solana, and others, could divert developer and user attention away from Ethereum, impacting its market position and price.
- Market Sentiment and Speculation: The cryptocurrency market is highly influenced by investor sentiment, which can be fickle. Negative news, market trends, or loss of investor interest could lead to a decrease in Ethereum’s price.
- Security Concerns: While Ethereum has a strong security record, the blockchain and its smart contracts are not immune to vulnerabilities. Any significant security breach or successful attack could lead to a loss of trust and a decline in price.
- Network Congestion and High Fees: Ethereum has struggled with high transaction fees and network congestion during periods of heavy use. This could push users and developers towards more efficient platforms, affecting Ethereum’s price negatively.
- Scaling Solutions and Layer 2 Adoption: The adoption and success of Layer 2 scaling solutions are crucial for Ethereum. If these solutions fail to deliver as expected, or if there’s slow adoption, it could negatively impact Ethereum’s usability and value.
- Environmental Concerns: The environmental impact of blockchain technology and crypto mining has become a significant concern. Ethereum’s shift to proof of stake aims to address this, but any perception that it’s falling short in environmental responsibility could hurt its price.
- Dependence on Decentralized Finance (DeFi) and NFT Markets: A substantial portion of Ethereum’s value is tied to its use in DeFi and NFTs. A downturn in these markets could lead to a decrease in Ethereum’s price.
It’s essential for investors to conduct thorough research and consider the dynamic nature of the cryptocurrency market when evaluating potential risks and rewards.
Factor Public Webinar November 2023 – Market Review and Q&A
Recorded live November 27, 2023
Overview
- Peter’s background and how he trades 00:17
- Charts on the radar screen 11:45
- Q&A 26:15
Live questions from Members
- You have a long-standing stance that Bitcoin has a 50% chance of continuing to increase in value and a 50% chance of going to zero…based on that, in what instance (or instances) would you see Bitcoin going to zero, and if that were the case, how fast could such an event happen? (i.e. zero overnight or would it take more time)? 26:15
- Which of your four pillars is the most critical and why? 28:03
- Are you still only trading weekly charts, or will you trade daily chart patterns as well? 29:40
- Any opinion on stock FLR? 30:51
- Any idea why did Edwards & Magee become more popular than Schabacker? 32:20
- Has this been one of your toughest years performance-wise? 33:50
- Are you looking at Forex pairs as closely as Futures contracts when you are charting and looking for potential positions? 35:57
- Do you trade altcoins too? Are you taking chart requests for altcoins? 37:44
- How do you decide where to set your stop when you enter a new position? 38:44
- In the FLR chart, do such patterns mean retesting the recent lows successfully by making a new Higher High again and again to break out? 43:33
- Using technical methods, what are good books for day/swing trading? 45:02
- Do you follow only Robusta or KC futures as well? 46:00
- In order of your top 3 or 4 preferences, what are your favorite patterns? 47:41
- Do you take the continuation pattern or the pattern of the contract month? 51:37
Link to Peter’s recommended reading list on Amazon
>>>CLICK HERE to watch<<<
Become a Factor Member
Members receive:
- Trading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
- The Weekend: Thoughts on a Sunday (Weekend) Afternoon
- Private Twitter Page: Real-time alerts on interesting charts and observations, member dialog, the process of trading, the human aspect of trading, and risk/trade management
- Webinars: Periodic member-only webinars where Peter speaks about current conditions and fields member questions
- Knowledge Center: Fast and easy access to current and archived content from Peter’s extensive library of trading content
- Automatic notifications: Email and social media notifications are sent out when new content is published
- Factor Report Educational Papers: Periodic educational and instructional documents
View your Factor Member options here. You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work. My goal is to shoot straight on what trading is all about.
I hope you will consider joining the Factor community.
Factor Update | October 28, 2023
Factor Update | October 28, 2023
The below Factor Update was issued to Factor Members on October 28, 2023.
Enjoy!
Become a Factor Member
Members receive:
- Trading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
- The Weekend: Thoughts on a Sunday (Weekend) Afternoon / Factor Update
- Private Twitter Page: Real-time alerts on interesting charts and observations, member dialog, the process of trading, the human aspect of trading, and risk/trade management
- Webinars: Periodic member-only webinars where Peter speaks about current conditions and fields member questions
- Knowledge Center: Fast and easy access to current and archived content from Peter’s extensive library of trading content
- Automatic notifications: Email and social media notifications are sent out when new content is published
- Factor Report Educational Papers: Periodic educational and instructional documents
View your Factor Member options here. You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work. My goal is to shoot straight on what trading is all about.
I hope you will consider joining the Factor community.
Factor Featured Trade DAX
Issued to Factor Members on September 24, 2023
Trade Spotlight – Short DAX Index
The spot DAX displays a right angled broadening triangle with a horizontal lower boundary at 15450 and with a 30-day ATR of 161 points. The continuation chart (056) appears as a broadening triangle. The Dec futures contract shows a right angled broadening triangle with a slanted lower boundary. The large futures contract has a point value of €5, the mini-contract has a value of €1 per point. I will use an alert from the spot chart as my trigger.
Constructing the initial trade
There are two possible risk point levels on a short trade in the Dec contract:
- Above the Sep 22 high at 15735
- Above the Sep 21 high at 15847
Spot DAX closed 252 points above its ATR BO at 15295. But the spot DAX closed several hours prior to the close of the DAX futures, which weakened by approximately 50 points after the spot close. Making the appropriate adjustments, I believe the ATR breakout for the Dec contract is sub 15500 (call it 15489).
A risk from a short trade entry at 15489 to 15853 (above Sep 21 high) would be 364 points, or €1820 (around $1,940 or so). Thus, a three large contract (or 15 mini contract) trade would create a risk of just under 60 basis points (6/10th of 1% of total nominal capital).
The orders below reflect the trade. The first order is the entry stop (with a limit).
The attached order is also entered, reflecting a buy stop which becomes active if/when the entry sell stop is triggered.
Become a Factor Member
Members receive:
- Trading Commodity Futures with Classical Chart Patterns: A free PDF copy of Peter’s classic out-of-print book
- The Weekend: Thoughts on a Sunday (Weekend) Afternoon
- Private Twitter Page: Real-time alerts on interesting charts and observations, member dialog, the process of trading, the human aspect of trading, and risk/trade management
- Webinars: Periodic member-only webinars where Peter speaks about current conditions and fields member questions
- Knowledge Center: Fast and easy access to current and archived content from Peter’s extensive library of trading content
- Automatic notifications: Email and social media notifications are sent out when new content is published
- Factor Report Educational Papers: Periodic educational and instructional documents
View your Factor Member options here. You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work. My goal is to shoot straight on what trading is all about.
I hope you will consider joining the Factor community.
Peter Brandt’s Charting Tool
Peter’s Crypto Coverage
