I am sure by now everyone has seen some form of the (in)famous Wall Street Cheat Sheet floating around on the Internet at one time or another, but I find it useful to look back on it every once in awhile, especially when considering the macro view of the market.
It is also useful to compare it with past market cycles and how they eventually played out in comparison to the current market conditions.
During the 2017-2018 market cycle, we could see elements of the Wall Street Cheat Sheet play out, although on a much extended time frame. Looking back it matched the market cycles depicted in the cheat sheet quite well.
Now here we are in the midst of the 2021 market cycle with Bitcoin hitting its most recent ATH of just shy of $65,000 and now are left wondering are we already past the cycle peak and heading downward, or is this going to be a repeat of the 2013 market cycle when Bitcoin set a new ATH in April and later on peaked 5x higher in November.
As shown in the image above, Bitcoin hit a new (at the time) ATH of $255 in April of 2013 followed by a correction and eventual flat lining to around the $100 mark until October of that year. Then BTC started it’s rapid ascent to another new ATH of somewhere around $1,200-$1,400 (depending on the exchange you were on) before beginning a slow multi-year decline as illustrated in the cheat sheet.
Some market analysts are currently speculating the current 2021 market cycle may be a similar pattern to 2013 in that we are yet to see new ATH later this year or perhaps early next year (2022).
Others, including myself, tend to favor the extended correction down outlook, similar to the 2018 market, but just more stretched out. This stands to reason as more capital and more people are in the market now than were in the previous cycles, there will be a lot more resistance to a fast correction. Although the time-frames may be different, I think we are in a pattern similar to the 2018 decline, although stretched out about twice as long in time. So basically what took 6 month to occur in 2018, will take around a year now in 2021, as far as market corrections. This means we probably will not see a real bottom until sometime in 2022.
In fact, looking at the current status of the market in the image above, we can see that we are just now entering into the complacency stage according to some estimations. We will continue to head lower eventually entering the anxiety, denial, panic and other stages as 2021 wraps up and 2022 begins. I have added the Wall Street Cheat Sheet again at the bottom of the post and highlighted where I believe we currently may be at in the cycle for comparison purposes..
I would be interested in hearing your thoughts and comments on where we are now and where you think we may be headed.