The cryptocurrency landscape is once again rife with speculation as bitcoin goes through its current fourth halving cycle. Amid various predictions, renowned crypto analyst CryptoCon’s ideas, based on the Gann Square methodology, the November 28 Halving Cycles Theory, and the Theory of Diminishing Returns 5.3, have attracted significant attention.
CryptoCon commented via X (formerly Twitter) today, “Gann Square predicts $89,000 or $135,000 for bitcoin top this cycle.” He emphasized the accuracy of Gann’s square theory during previous cycles, noting its accuracy in predicting cycle peaks.
Will bitcoin Price Reach $135,000?
According to the analyst, by taking advantage of the “2×1 blue fan as a fair value line and reaching the end on November 28 (halving cycles theory)”, Gann Square successfully identified the tops of cycles 1 and 3 in the fourth level. However, the second cycle diverged and was slightly above the fifth level.
This sets the stage for two potential outcomes in the ongoing fourth cycle, with the $135,000 prediction lining up with both CryptoCon’s November 28 price model and its Trend Pattern price model. In contrast, the $89,000 figure aligns with the theory of diminishing returns of 5.3.
Historical data adds depth to this analysis. bitcoin‘s inaugural cycle, which spanned 2010-2014, saw it catapult from a minuscule value to a high of $1,177. The next cycle 2015-2018 started at $250, witnessing an unprecedented rise to $20,000 at the close. The journey from 2018 to 2022 manifested bitcoin‘s resilience as it rose from sub-$6,000 levels to a commendable $68,800.
Delving into the complexities of the Gann Square “Fan” lines offers more clarity. The “2×1 Fan” line, represented in blue, traces a trend angle where the price progression is twice that of time. Traditionally, when the price of bitcoin is near this line, it indicates a “fair value.”
In its 13-year history, bitcoin has rarely fallen below the line, most recently in late 2022 following the collapse of FTX, then the second-largest cryptocurrency exchange, and during the Covid crash in March 2020.
The “1×1 Fan” line, represented in green, represents a market in equilibrium with prices increasing along with time. Historically, bitcoin price peaked near this line during the parabolic rise in the second and third cycles, providing the theoretical basis for the $135,000 prediction.
The theory of diminishing returns: only less than $90,000?
In a later post, CryptoCon continues explained the target of $89,600. He stated that “$90,000 is slightly above the theory of diminishing returns of 5.3.” According to the theory, bitcoin returns decline by a factor of 5.3 times from the end to the end of each cycle, suggesting that the next cycle’s peak could be around $77,000.
CryptoCon commented: “After measuring the returns from the lowest point to the highest point of the cycle on the daily time period as accurately as possible, the returns from the highest point to the lowest point of the cycle are not 5 ,3. They are as follows: 5.34x, 4.96x and 5.63x”.
Going deeper, CryptoCon noted: “The 5.3 has merit, as the average of these numbers is 5.31. However, we cannot say with certainty that these will be the returns if this is just an average.”
Highlighting potential spikes based on past cycles, he commented on more substantiated figures. “The actual numbers so far range from the lowest cycle high of $73,522 to the highest of $81,675 with an average cycle high of $77,122.”
Discussing the chances of bitcoin reaching the long-awaited $100,000 mark, CryptoCon explained: “$100,000 would mean a 3.84x decline, implying that bitcoin would need to exhibit a drastically lower diminishing rate of return in this cycle.”
Drawing attention to bitcoin’s historical relationship with Fibonacci extensions, he stated: “bitcoin has consistently reached a Fibonacci extension level in every higher cycle. If the intended target is $77,000, this would be a deviation. The cycles have previously coincided with the Fibonacci extensions of 58.764, 19.764 and 3.618. For this cycle, the lowest Fibonacci extension measured from the bodies of the weekly candlesticks is 1.618, suggesting a price of $104,000, corresponding to a 3.7x decline from the last cycle.
CryptoCon concluded by inviting speculation on whether external factors, such as the approval of bitcoin spot ETFs, could provide the impetus needed to change these models. “Many believe that ETFs will have the strength to disrupt these models and predictions. Yields are evidently declining, but will the average yield of 5.31x ($77,122) be the peak of this cycle?”
At the time of publication, btc was trading at $26,906.
Featured image from Shutterstock, chart from TradingView.com
