bitcoin price action has triggered a technical momentum signal that in the past appeared four to six months after each cycle peak. Could the next top of the cryptocurrency bull market come so soon when the rally barely seems to be underway? Let's take a look at the 1-month Stochastic Momentum Index and the supporting data.
A crypto cycle peak in less than six months? No way!
The idea of a cryptocurrency bull market peaking in less than six months probably sounds ridiculous. But looking at past data, the implications of the chart below could catch many bitcoin investors who don't expect the price to move until after the halving by surprise.
The 1-month Stochastic Momentum Index, which measures trend strength based on price momentum, is now above a reading of 72. While this alone is meaningless, looking back at the Past results when BTCUSD spikes above this level on the oscillator tells us another story.
bitcoin has only reached such momentum levels three times in the past, and all three times the leading cryptocurrency peaked in the following four to six months. The signal is now back, suggesting a peak could arrive within four to six months.
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Will another peak form within 4-6 months? | BTCUSD on TradingView.com
Why the window to buy bitcoin is rapidly closing
A four to six month window doesn't leave much time to accumulate btc for those who haven't done so yet. For most of the cryptocurrency's existence, prices tend to appreciate faster and more steeply after the block reward is “halved.” This has become so obvious to onlookers that it has become expected and is the consensus among most cryptocurrency investors on what drives supply and demand.
Since today is December 1, bitcoin's next halving event in April 2024 falls just inside the sweet spot between four and six months to a high.
However, it is not known if the stochastic momentum index signal will produce the same results. Currently, both the stochastic momentum index and the halving have accurately predicted a bull market in the past. The only difference is that the signal arrives long before the halving.
Whatever the case, the tool at least suggests that momentum is bullish and rising towards all-time high readings.
