First off, this post is not about claiming that we're gonna follow the 2013 pattern, or that the same thing is necessarily happening.

We could end up like in 2018.

The point is there are many scenarios at play.

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1- You have to be prepared for every scenario, because no one knows what will happen next.

Don't bet everything on one narrative.

Remember last year year when people predicted we would hit $100K? But then we crashed from $68K.

Remember last September when people said Evergrande would plunge us into 2008 2.0? But then when it finally defaulted, we had a "Santa rally" in the stock market reaching new highs.

We now have people literally making posts saying we are 100% going into a crypto winter and long recession, and neither crypto nor stocks are gonna be able to bounce back.

While prices have been battered in crypto, and it looks like we could be entering a crypto winter, believe it or not it's not the only scenario still at hand.

It wouldn't be the first time crypto got battered this hard, then bounced back into a rally instead of plunging into a recession. In fact, we have some very good historical precedent for other scenarios.

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2- But what about stocks? Aren't we just gonna follow stocks if they go down?

Crypto's correlation to stock is there, but it has been overblown a little.

In fact, if you look at the data, we've never actually hit a strong statistical correlation (0.8 or above). We've only been at moderate correlation at around 0.5, going only as high as around 0.65.

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Bitcoin correlation to the S&P 500

Keep in mind, this moderate correlation started with Covid, and since the Fed started printing extra liquidity. That's what fueled that correlation.

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https://preview.redd.it/6q8s5z8jeoy81.jpg?820&format=pjpg&auto=webp&s=f2549f7ed6522781b0a92fee977bea43634508e9

Now that the Fed switched off the printers, the fuel for that correlation is no longer there. We are left with maybe some lingering psychological fuel.

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3-So what happened in 2013?

In 2013 we had a bull cycle, after a long bear winter.

From February 2013 until April, Bitcoin went on an incredible parabolic bull run. Going from $20 to almost $200.

Then it crashed.

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Chart 1: 2013 FOMO run

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Was it the beginning of a bear winter cycle?

It seemed like it, and went on for a few months.

We had many people claiming that the bear winter was here, and to expect a long recession.

But that mini bear cycle got cut short, and barely lasted half a year.

In October 2013, the bull run that started at the beginning of the year resumed. And the price went parabolic again, reaching its true peak at over $1K.

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Chart 2: full 2013 cycle, with mini bear market in between.

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This shows a precedent for having a mini bear market in the middle of a bull cycle. Especially when the market has a hard time at finding new lows.

Since the two big crashes we had, the market has spent months trying to find a new low below $28K.

4- What could cause a mini bear market or a break within a bull market?

Maybe lot of bad economic news at once? That could cause a bull cycle to have a break in between.

The break of war with Russia, and fears of WW3. Stock markets correcting. High inflation. Still some after effects of a pandemic. Fed rates increasing and spooking markets.

I think a combo like that should be enough downward pressure, to pause a bull cycle.

In fact, if we were in a bear market, a combo like that would have cratered the crypto market by now.

When crypto is in a bear market, it takes very little bad news to drop.

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5- The patterns.

What about other historic ratios and patterns? Aren't we still following more of a 2017/18 pattern?

I'll let you be the judge of that:

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2017/18 market

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Current market

Additional ratios:

Additionally, if we start looking for patterns, the ratios just aren't matching up that much.

It would be too short to fit the pattern of time.

And it would be too low to fit the pattern of price.

$69K doesn't fit any of the historic ratios.

Here's one example:

At the end of 2017, Bitcoin peaked at $19.5k

That would be 17x the previous bull market ATH of 2014.

In 2014, the peak was at around $1,150K. Which was about 35x the previous ATH.

If this cycle's peak was $69K, then that would only be 3.5X, breaking the pattern.

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Conclusion:

Maybe there isn't a pattern after all.

But if there is one, a bear market here means we have stopped following most of them.

If we are still following them, it may just mean that all these macro economic troubles have created a break in the cycle, and mini bear market break like in 2013.

That would put us on course to follow the usual halving and cycle patterns with a small break.

Either way, nothing is for sure. Which is the point I was trying to show.

You have to consider every scenarios.

There's isn't a 100% guarantee, especially in a volatile market that's still in its infancy.

Especially with so many different dynamics at play in the world. Some bullish, some bearish.

The good news is we'll know soon enough.

Whatever is gonna play out, will likely play out within the next few months.