The Journey Ahead: Navigating the Next Cycle

Much like the seafaring traders of ancient Venice, we find ourselves preparing for another voyage into the uncharted waters of the cryptocurrency market. History provides us with the tools to forecast the path ahead, but the journey itself is never without surprises. As we approach the next phase in Bitcoin’s long-term cycle, driven by the halving of April 19, 2024, we see echoes of the past and clear signs of what is to come.

This report dives into the cycles, the macro environment, and the key elements that will define this upcoming journey: rate cuts, liquidity cycles, various charts, and, most interesting; the length of the Bullrun.

The stage is set, the winds are changing, and Bitcoin is once again about to lead us into a new cycle, one that can propel us into another era of abundance

Historical Cycles: The Halving and Bitcoin’s Behavior

Historically, Bitcoin halvings have always been the key turning points that ignite the spark of a new bull cycle. Each halving reduces the new supply of Bitcoin coming into the market, tightening availability and setting off demand. The typical cycle from halving to market top has lasted between 12 to 18 months.

Previous Halvings:

• 2012 Halving (November 28, 2012): Bitcoin rose from $12 to $1,150 in a year.
• 2016 Halving (July 9, 2016): Bitcoin soared from $650 to $20,000 by December 2017.
• 2020 Halving (May 11, 2020): Bitcoin exploded from $8,500 to an all-time high of $68,990 in November 2021.

The 2024 halving on the 19th of April, marked another pivotal event, setting the stage for the next bull cycle. However, unlike previous cycles where Bitcoin was around 50% of its all-time high during the halving, this time was different—Bitcoin has already surged ahead before the halving, signaling a more mature market and possibly an altered dynamic for the upcoming cycle.

Exploring the Data: What the Charts Tell Us About This Cycle

As we analyze the 2024 halving and the differences compared to previous cycles, it’s crucial to dive deeper into the data and explore what the charts are indicating about the future trajectory of Bitcoin. While historical halvings have consistently driven bull runs, the current market dynamics appear to be shifting. To gain further insight, let’s first examine some key charts that offer a broader view of Bitcoin’s price action.

Rainbow Chart: Mapping Out Market Sentiment

A visual aid we’ve relied on in previous cycles is the Rainbow Chart—a tool that helps track Bitcoin’s price movements in a color-coded manner, offering a clear insight into market sentiment. With colors ranging from dark blue (indicating “Fire Sale”) to red (indicating “Maximum Bubble Territory”), the chart allows us to gauge where Bitcoin is in the cycle.

As of October 2024, Bitcoin sits in the mid-range, suggesting a period of accumulation and consolidation before the explosive growth phase expected in 2025. Historically, after halving, Bitcoin takes about 6-12 months to break into the “Maximum Bubble Territory,” and this time appears to be no different, possibly propelling us into the $120,000-$150,000 territory.

With liquidity flowing and halving behind us, the next stage—market euphoria—could begin by mid-2025, pushing Bitcoin toward its peak.

The Market Cap Expansion

This chart highlights the cyclical nature of Bitcoin halvings and their influence on the total crypto market cap. Each halving triggers a reduction in Bitcoin supply, fueling bull runs that typically last around 545 days from halving to peak.

2016 Halving: Total Market Cap surged 34067% to peak in January 2018.
2020 Halving: Total Market Cap rose 3141%, peaking in November 2021.

When we extrapolate the pervious tops to this cycle, the market cap, currently around 2 trillion, could grow to 4-5 trillion. The chart is suggesting a 554% increase from the recent bottom in November 2022. Let’s assume an average Bitcoin dominance of 50%-55% at the end of 2025, and a supply of approximately 20 million Bitcoins circulating. With a total marketcap of 4-5 trillion the estimated price of Bitcoin by the end of 2025 could range between $100,000 -$140,000.

While the 537-day window from the halving to the end of the cycle remains a relevant reference, this cycle may be more sustained, driven by a broader macroeconomic backdrop. What this chart ultimately shows us is that, while history may rhyme, it doesn’t always repeat exactly.

Kenobi’s Masterplan: Navigating the Crypto Market

Master Kenobi’s Bitcoin Master Plan is another critical piece in this puzzle, a visual masterpiece that maps out Bitcoin’s cyclical nature in breathtaking clarity. Every halving is a pivotal event in Bitcoin’s history, marking the start of a journey that takes the market on a wild ride of parabolic gains before the inevitable correction.

Looking to the future, the April 2024 halving is the focal point. As history shows, Bitcoin typically peaks 500-550 days after each halving, meaning we’re eyeing a potential top in late 2025 or even early 2026. If the past cycles hold true, we could be heading for a substantial increase, with Bitcoin reaching astronomical new highs.

Altcoin Season: Timing the Peak

Altcoins have always followed Bitcoin’s lead, but their runs are often delayed. In the past cycles, altcoin peaks have come one month after Bitcoin reaches its top.

• In 2017, Bitcoin peaked in December, and altcoins peaked in January 2018.
• In 2021, Bitcoin peaked in November, and altcoins followed in December 2022.

For the upcoming cycle, with Bitcoin expected to peak between September and November 2025, we anticipate a full-fledged altcoin season lasting through the end of 2025. Micro-cap and mid-cap altcoins will likely experience the most explosive gains, as retail and institutional investors rotate out of Bitcoin into higher-risk assets.

Bitcoin Already Priced in? A New Chapter in the Bitcoin Story

As we step into the final quarter of 2024, the narrative surrounding Bitcoin and the broader crypto market is shifting. Historically, the market has been driven by sharp, dramatic cycles, where the Bitcoin halving triggers an explosive post-halving bull run, leading to massive parabolic moves. But this time around, something is different.

During previous Bitcoin halving events, the price of Bitcoin has typically hovered around 50% of its previous all-time high (ATH) when the halving occurs. However, in the lead-up to the 2024 halving, Bitcoin’s price reached close to its previous ATH of ~$69,000, significantly higher than expected based on prior cycles.

The early price action before the 2024 halving has sparked a new discussion: Are we now entering an extended and gradual bull run? Can we expect the same explosive growth we saw in previous cycles, or is this cycle destined to play out more methodically, driven by institutional players, global liquidity, and broader adoption?

This early rally begs the question: Has much of the post-halving price surge already been priced in?

Global Liquidity and the Impact of Rate Cuts: A Key Driver of the Extended Bull Run

One of the biggest factors influencing this cycle is the global liquidity environment. In 2020, following the onset of the COVID-19 pandemic, the Federal Reserve slashed interest rates to near zero and injected massive liquidity into the global financial system. This fueled one of the most significant bull runs in crypto history.

Fast forward to September 2024, and we’re once again seeing the first rate cuts since 2020. The Fed, along with central banks globally, is shifting from its aggressive tightening policies to a more accommodative stance. Interest rates are being slashed — starting with a 50 basis point cut in the U.S. and rate cuts in China on September 24, 2024 — injecting fresh liquidity into the system.

This global orchestration of liquidity injections is the perfect backdrop for a sustained bull market. While the early price action before the halving may have muted the typical explosive post-halving rally, the flood of liquidity from these rate cuts can sustain Bitcoin’s growth over a longer period.

Global Liquidity Cycle: The True Catalyst

The Global Liquidity Cycle (GLC) plays a massive role in determining the extent of the upcoming bull run. When liquidity is abundant, speculative assets thrive—and cryptocurrencies, by their very nature, are speculative.

Looking at previous cycles, the GLC topped out by the end of 2021 and bottomed out in early 2023 and has been expanding steadily. The combination of rate cuts, halving supply shocks, and liquidity injections sets the stage for another bull run, with potential gains in mid-caps and micro-caps being similar or exceeding the run from the December 2018 bottom to the November 2021 peak.

If the GLC follows historical trends, we could see Bitcoin climb toward $100,000 and beyond, with the total market cap approaching $4.8 trillion by early 2026.

The Case for a Gradual and Extended Bull Run

1. Institutional Involvement: This cycle is different from the retail-driven rallies of 2017 and 2020. Institutional investors are now a much larger part of the crypto market. They operate with longer-term strategies, often accumulating and holding Bitcoin over months and years, rather than engaging in short-term speculation. Their steady involvement is likely to lead to a more gradual price increase, rather than the sharp speculative spikes of past cycles.

2. Broader Market Maturity: Bitcoin and the crypto market, in general, are no longer nascent, speculative assets. The market has matured. With more sophisticated players, hedging strategies, and institutional products like Bitcoin ETFs, Bitcoin’s price action could be more controlled and measured. This means we could be in for a longer-lasting bull run, with a tempered but steady increase in price over the next 12-24 months.

3. Rate Cuts, The Liquidity Fuel: The rate cuts, started in September 2024, will inject fresh liquidity into the global financial system. As borrowing costs decrease and more capital becomes available, speculative assets like Bitcoin tend to benefit. Historically, rate cuts have provided the fuel for risk-on investments like crypto to rally. With more rate cuts expected throughout 2025, we could see this bull run stretch out even into early 2026, sustained by ongoing liquidity injections.

4. Broader Adoption and Use Cases: Unlike in 2020 and 2021, where Bitcoin was seen primarily as a speculative asset or an inflation hedge, we are now seeing broader adoption across industries, including decentralized finance (DeFi), non-fungible tokens (NFTs), and the use of Bitcoin as a store of value by nation-states like El Salvador. This expanding use case adds to the fundamental value proposition of Bitcoin and will likely support a longer bull run.

Conclusion: The Perfect Storm Is Brewing

We find ourselves at the crossroads of multiple macroeconomic and market forces—rate cuts, liquidity expansion, Bitcoin halving, and the historical patterns of the crypto market. Like the Venetian traders of old, we must navigate these turbulent waters with a mix of caution, foresight, and a willingness to seize opportunities where others see only risk.

The Venice Whale will continue to guide its community through the next stages of this cycle, staying vigilant as liquidity floods the market and Bitcoin climbs toward its next peak. But it’s not just about Bitcoin—altcoins are poised for their own season of growth, with unprecedented gains for those who position themselves early and strategically.

In the end, the same principles that guided the rise of Venice will guide us through this journey: patience, preparation, and the relentless pursuit of opportunity.

Until next time, stay sharp – and stay whale sized.

Welcome to Venice Whale: Where Tradition Meets Innovation, and Value Reigns Supreme.

This will be the first report of many, with the goal of timely uncovering opportunities and forecasting macro movements. We will learn about cutting-edge technology and gain an edge in this highly competitive crypto market. A report will be released whenever I see the need for it, interesting alpha is available and significant moves can be made.

Since my focus of interest is in microcaps, and thus the altcoin market, the first question I like to pose is:

When Altseason?

The crypto market is known for its cycles, and one of the most exciting times for many investors is Altseason—a period where altcoins (cryptocurrencies other than Bitcoin) experience significant price surges. To understand when Altseason might strike, we must study historical patterns that have repeated themselves over several bull runs.

Let’s break down the playbook that has repeated itself in past bull runs and will likely happen again.

Bitcoin’s Strong Impulse Leads the Charge

The first stage of Altseason begins when Bitcoin makes a decisive move above its previous all-time highs. Historically, Bitcoin leads the market by drawing liquidity and attention from across the investment landscape. When Bitcoin reclaims its highs, the entire market shifts.
In 2017, Bitcoin surged past its previous highs, increasing its dominance initially, before capital rotated into altcoins.

Bitcoin Dominance Drops, Altcoins Shine

After Bitcoin breaks out, Bitcoin Dominance—the percentage of the total crypto market cap that Bitcoin represents—starts to decline. Investors begin taking profits from Bitcoin and seeking higher returns in altcoins, setting the stage for Altseason.
The most dramatic gains in altcoins occur once Bitcoin dominance drops. Smaller, undervalued assets begin to outperform Bitcoin, often seeing rapid price appreciation.

As we see here from the Bitcoin Market Cap Dominance chart is that it’s approaching a significant resistance level of 58%-62%. This combined with the rising wedge pattern signals a possible downward breakout. The RSI is nearing overbought levels, which suggests that the Bitcoin dominance may be due for a pullback. All in all the chart suggests that we are approaching a critical turning point and if it fails to break above the 60% with conviction in the upcoming months, and instead reverses, this could signal the start of the next Altseason.

Altseason Begins: A Period of Exponential Gains

Once Bitcoin dominance drops, altcoins go parabolic. Historically, this is when the market shifts into a frenzy of price increases, with small-cap cryptocurrencies multiplying in value. Investors who position themselves early in quality altcoins typically see outsized returns during this period.

The Altcoin Dominance chart (percentage of the total cryptocurrency market held by altcoins excluding Bitcoin), shows us that the altcoin dominance is currently sitting on a strong support level. This is considered as a critical indicator when considering the potential for an altseason. The RSI shown is ranging near oversold territory, further indicating the altcoin market could be undervalued relative to Bitcoin. The MACD also shows potential for a bullish crossover, which could act as another confirmation and signal for a shift in dominance back toward altcoins. In conclusion this chart hints that we may be nearing one of those parabolic moments for altcoins again

Why Haven’t We Seen Altseason Yet?

Many are asking: Where is Altseason? The answer lies in Bitcoin’s recent lack of momentum. For the past few months, Bitcoin has moved sideways or downward, failing to break above its previous highs. This has delayed the rotation of capital into altcoins, leaving investors impatient and skeptical.
But this sentiment—doubt, impatience, and disbelief—is exactly what market makers exploit. They rely on weak hands selling before the real move happens. Those who remain patient and understand historical cycles will be the ones to capitalize on the next big move.

Bitcoin’s Seasonal Trends

September has historically been a bearish month for Bitcoin, as the saying “sell in May and walk away” still holds true for many investors. However, as we move into October, known as “Uptober”, liquidity tends to return to the market, often leading to significant rallies in Bitcoin and, subsequently, altcoins.

The 2020 Playbook: How Rate Cuts Impacted Bitcoin and the Crypto Market

The year 2020 stands out as one of the most chaotic yet opportunistic periods for the global economy. Faced with the unprecedented global pandemic, the Federal Reserve responded by slashing interest rates with a swiftness rarely seen in history. In March 2020, the Fed made two consecutive rate cuts, totaling a massive 150 basis points (1.5%) within a single month, bringing the federal funds rate to a near-zero range of 0-0.25%. This drastic reduction in rates was designed to flood the financial system with liquidity to avoid a total collapse of markets, businesses, and households.

Bitcoin’s Response: A 460% Surge!

Initially, as markets processed the pandemic’s economic impact, both traditional and crypto markets saw significant sell-offs. However, as the flood of liquidity began to take effect, Bitcoin and other risk assets rebounded dramatically. By the end of 2020, Bitcoin had surged more than 400%, climbing from under $5,000 in March to over $28,000 by December. This price action was a direct response to the capital flooding into the system. With traditional investments yielding lower returns due to near-zero interest rates, investors looked for alternative assets like Bitcoin, which became the go-to store of value amidst fears of currency devaluation.

2021: The Year of Liquidity-Fueled Growth

Throughout 2021, the Federal Reserve maintained its ultra-loose monetary policy, keeping rates at 0-0.25% and continuing its quantitative easing programs, injecting even more capital into the markets. The combination of excess liquidity and the inflationary environment pushed Bitcoin to its all-time high of nearly $69,000 in November 2021. As Bitcoin surged, altcoins followed, with many smaller projects posting 10x or even 100x returns.

Liquidity was the lifeblood of this bull run, and the connection between Fed rate cuts and crypto market rallies became unmistakable.

Fast Forward to 2024: Rate Cuts on the Horizon?

Today on the 18th of September 2024, we see the Federal Reserve once again turning to rate cuts to prevent economic stagnation. In a move reminiscent of March 2020, the Fed has cut interest rates by 50 basis points (0.5%), marking the first reduction since the pandemic era. The question on every crypto investor’s mind is: How will this affect Bitcoin, altcoins, and the broader market?

If the Fed cuts rates in late 2024, we could see a market dynamic similar to 2020-2021. This time, Bitcoin could reclaim its previous highs, setting the stage for a significant rally and another Altseason.

While the 2024 rate cut is more measured compared to the aggressive 150 basis points slashed in 2020, its implications are still significant. Lowering interest rates reduces the cost of borrowing and increases the amount of available liquidity in the system. Historically, this leads to increased risk-taking, as investors look to move capital into higher-yielding assets such as Bitcoin and altcoins.

Why Fall 2024 Could Be Critical

October has traditionally been a bullish month for crypto markets, and with more potential rate cuts on the horizon, we could see renewed liquidity entering the system. Investors who were sitting on the sidelines may begin to allocate capital into riskier assets, including Bitcoin and altcoins.

• Increased Liquidity: Lower interest rates lead to more available capital, which often finds its way into risk assets like cryptocurrencies.
• Institutional Involvement: Institutions are likely to flock to Bitcoin and other crypto assets as a hedge against economic uncertainty.
• Altseason Potential: Once Bitcoin’s dominance drops, altcoins could see massive price increases, mirroring the parabolic gains of 2020-2021.

The Transition into 2025: Will the Bull Run Continue?

If rate cuts materialize as expected in late 2024, we could see a multi-month bull run similar to 2020-2021. Bitcoin will likely lead the charge, but as its price climbs, capital will start rotating into altcoins. This is when Altseason truly begins.

In early 2025, we expect to see smaller-cap cryptocurrencies outperform Bitcoin, as investors seek even higher returns. The key to navigating this market is to position yourself early and avoid getting caught in speculative frenzies. Strategic investments in utility-driven altcoins could yield life-changing returns during this period.

Until next time, we’ll dive deeper into timing the length of the bull run and which narratives will drive the next wave of growth.