Search for the Cycle Top Is Still On

Dear Subscriber,

The market volatility earlier this week churned a few stomachs.

And while quick negotiations in the tariff war tempered panic quickly, it still left investors uncertain about crypto’s future.

That’s why I’m glad my colleague Marija Matić made sure you saw the bullish forces bubbling underneath the fear on Monday.

They were enough for her to assert this correction was a road bump, not a detour.

I sincerely hope that helped you keep a cool head as the uncertainty and doubt flooded the market.

Because my Crypto Timing Model agrees with Marija.

The crypto bull has not been put out to pasture.

It’s merely on pause.

Profits Lie Past the Hysteria

Why am I so confident this cloud over the crypto market will pass?

After all, the tariff war has only been delayed, not ended.

But that’s seeing the forest for the trees.

Let me be clear: The idea that Trump’s tariffs caused this move is nonsense.

The markets were already primed for a pullback as Bitcoin’s (BTC, “A”) technical support was broken.

The tariff headlines were simply the catalyst that pushed prices further.

That’s how cycles work. When the time comes for a downturn, markets will find a reason to sell off.

But you don’t have to believe me blindly. Just take a look at crypto’s history.

This Correction Pales in Comparison to Previous Crashes

There have been at least three major pullbacks since 2020. And all three have been far worse than this.

By comparison, what happened over this past weekend barely registers.

Yes, it was a dramatic move. But crypto is always dramatic.

In reality, this was just a routine correction in a volatile market.

More importantly, if this move felt particularly overwhelming, that’s a sign to check in on your portfolio.

You may be overleveraged or have invested more than you’re comfortable losing.

I encourage you to take stock and make sure you’re comfortable with your portfolio now.

Because — trust me — you are going to see price swings far bigger than the “Trump tariff tantrum” before this bull market is over.

That’s because this is not how a real crash plays out.

Search for the Cycle Top

In a true capitulation event, prices stay suppressed. Weak bounces get sold into. And it takes weeks — if not months — to recover.

What happened last weekend was a sharp move down followed by an equally sharp move back up.

That’s not systemic weakness. That’s an overleveraged market getting cleaned out.

If you need more proof, let’s look at the cycle top. For a bull market to be over, that means the top must be in.

But I don’t see a cycle top anywhere on my Crypto Timing Model.

That’s because we haven’t hit it yet.

Bitcoin first reached $98,000 on Nov. 21. Then, it reached its latest all-time high near $108,700 on Jan. 20, two months later.

As of writing, it’s trading back near $98,200 at the time of writing and has intermittently broken above $100,000 several times this week.

Let me be clear: This is not how major tops form.

What we saw was too quick and too small for a true long-term cycle top. Not to mention, BTC is still trading near its all-time high.

True cycle tops occur when markets go vertical … and then collapse under their own weight.

They don’t grind sideways like this.

What we’ve experienced so far was nothing more than a bullish 80-day cycle within a broader bullish uptrend.

Just look at Bitcoin’s chart from the last bull market top in 2021:

From October 2021 to November 2021, BTC shot up roughly 67% … and then immediately retracted upon hitting its cycle top. By January 2022, almost all gains from that last rally were given up.

Now, compare that to BTC’s price action over the past three months:

We’re looking at a very different picture today.

A market that consolidates near record levels — like what you see above — is far more likely to be building a base for another leg higher.

Hence, my conviction that this correction isn’t the end of the bull market.

It’s just a hiccup on the way to new all-time highs.

We have a while before the rally can resume in earnest.

With how fast crypto typically moves, patience is a hard-earned virtue. But in this market, it will be what separates successful trades from those stuck on the rollercoaster.

Best,

Juan Villaverde