Crypto Expert Says The Bitcoin Cycle Is Already Over, Here’s Why

Overview

Recent discussions within the cryptocurrency community have raised questions regarding the current phase of Bitcoin. A crypto expert has presented a conservative perspective, suggesting that Bitcoin’s cycle may have already concluded based on traditional cycle theory and macroeconomic indicators. This viewpoint challenges the prevailing bullish sentiment among many market participants.

Bitcoin’s Cycle Analysis

Tony Severino, a crypto expert, has expressed skepticism about the ongoing bullish phase of Bitcoin, arguing that the primary cycle may already be complete. He has criticized those who promote overly optimistic narratives about Bitcoin’s future, referring to them as “snake oil salesmen.” Severino’s analysis is grounded in macroeconomic data, particularly the U.S. ISM Purchasing Managers’ Index (PMI), which he considers a reliable indicator of cyclical behavior.

Severino’s insights highlight a concerning trend in the PMI data, which indicates a pattern of lower highs and lower lows. This trend suggests a weakening manufacturing environment, which could have implications for Bitcoin’s performance. According to Severino, the proper way to measure cycles is from trough to trough, rather than relying on speculative projections of future gains. He interprets the current structure of the PMI as indicative of a cycle that has peaked and is now in a downturn.

At the time of his analysis, the PMI was reported to be around 47.9. Severino cautioned that if the index were to sustain a move below the 46 level, it would signal a transition from a local pullback to a more significant intermediate downtrend. A further decline beneath 41.6 could carry even graver consequences, as it would fall below the lows seen during the COVID-19 period. This situation would evoke comparisons to extreme historical conditions, such as those experienced during the Great Financial Crisis of 2007-2009 or the stagflation of the 1970s and early 1980s.

Severino’s perspective poses a challenge to the notion that Bitcoin is on the brink of a new bullish phase. He also criticized popular Bitcoin valuation models that draw comparisons between Bitcoin and gold, as well as those that rely on long-term projections disconnected from economic realities. Currently, Bitcoin appears to be lagging behind gold and silver, which have been attracting consistent inflows, in contrast to Bitcoin’s apparent fatigue around a specific price point.

From author

The contrasting views on Bitcoin’s current cycle highlight the ongoing debate within the cryptocurrency community. While some analysts maintain a bullish outlook, others, like Severino, advocate for a more cautious approach based on economic indicators. This divergence reflects the complexity of market dynamics influenced by macroeconomic factors.

Severino’s shift from a bullish perspective to a more bearish outlook underscores the importance of adapting to changing market conditions. His reliance on traditional economic indicators further emphasizes the need for a grounded approach in analyzing cryptocurrencies.

Impact on the crypto market

• Increased skepticism among market participants regarding Bitcoin’s bullish potential.
• A potential shift in investment strategies as traders reassess their positions based on macroeconomic indicators.
• Heightened focus on traditional economic data, such as the PMI, as a tool for predicting cryptocurrency trends.
• The possibility of Bitcoin facing significant downward pressure if macroeconomic conditions worsen.
• A potential shift of capital from Bitcoin to other assets like gold and silver due to comparative performance.