Why It Isn’t (Yet) Time For A Major Bitcoin Correction
Bitcoin price is falling and within 48 hours, still fresh from local highs, crypto market sentiment was instantly convinced of another major correction.
According to a time-based technical analysis theory, however, the cryptocurrency market may take some more time for a correction. Here’s a closer look at why.
Time is on the side of the bulls
Just days after a mere 10% pullback, cryptocurrency Twitter is declaring that the bear market is back, and new lows are a guarantee. However, time is on the side of Bitcoin bulls according to the Hurst Cycle Theory.
American engineer JM Hurst created the theory in the 1970s and it consists of eight key principles. The list includes Commonality, Cycling, Summation, Harmonicity, Synchronicity, Proportionality, Nominality, and Variation.
At its core, the theory looks for a repeating rhythm of temporal distance, measured from valley to valley. In the chart below, we can see that 50% or more of the corrections follow a cyclical pattern. Repeated time cycles suggest that the next great depression will not occur until January 2024.
Short-term cyclical behavior | BTCUSD on TradingView.com
Each of the major troughs traces back to the last major correction in 2017. The next major trough was the bottom of the 2018 bear market, followed by the COVID meltdown of 2020. The summer of 2021 gave us another trough, and another one arrived in November 2022 . But was it a long-term fund?
Connecting Long Term Bitcoin Funds
Not only do the shorter-term cycles suggest that there will be no big short-term bear moves, the longer-term cycles say something similar. According to the Principle of Harmonicity, larger time cycles can be divided into halves and thirds.
Long-term cyclical behavior | BTCUSD on TradingView.com
The minor time cycle measured as the 1/3 harmonic drives the Bitcoin price to the last bear market bottoms. Another of these major cyclical lows with significant sum will not occur until mid-2026.
Related Reading: Why Bitcoin Could Be Ready for Its Most Powerful Rally in Years
The Hurst Cycle Theory requires some subjectivity, so there is no way of knowing if what was said above is perfectly accurate or if the current cycle structure starts to change or show more variation. But if the drawings are accurate, it might not be time for a major correction for a few more months.
Today sure felt like a capitulation in cryptography. The cycle time of a #Bitcoin the background couldn’t be more perfect either. How far will you go before the week is over? pic.twitter.com/dMIuTcM44d
— Tony “The Bull” (@tonythebullBTC) November 10, 2022