Bitcoin price is falling and within 48 hours while still fresh from local highs, crypto market sentiment has been instantly convinced of another major correction.
According to a time-based technical analysis theory, however, the crypto market might not be due for a correction for a while longer. Here is a closer look at why.
Time Is On Bulls’ Side
Within days of a simple 10% pullback, crypto 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 Hurst Cycle Theory.
American engineer JM Hurst created the theory in the 1970s, and it consists of eight key principles. The list includes Commonality, Cyclicality, Summation, Harmonicity, Synchronicity, Proportionality, Nominality, and Variation.
At its core, the theory looks for a repeating rhythm of time distance, measured from trough to trough. In the chart below, we can see that past 50% or more corrections follow a cyclical pattern. The repeating time cycles suggest that the next major trough won’t be until January 2024 the earliest.
Short-term cyclical behavior | BTCUSD on TradingView.com
Each of the major troughs date back to the last big correction in 2017. The next major trough was the 2018 bear market bottom, followed by the COVID collapse in 2020. Summer of 2021 gave us another trough and yet another arrived this past November 2022. But was it a long-term bottom?
Connecting Long-Term Bitcoin Bottoms
Not only do the shorter term cycles suggest that there won’t be any major bearish movements in the near term, larger time cycles say something similar. According to the Principle of Harmonicity, larger time cycles can be broke down into halves and thirds.
Long-term cyclical behavior | BTCUSD on TradingView.com
The smaller time cycle measured as the 1/3 harmonic takes Bitcoin price all the way back to the last several major bear market bottoms. Another one of these major cyclical troughs with significant Summation isn’t due until mid-2026.
Related Reading: Why Bitcoin Could Be Ready For Its Most Powerful Rally In Years
Hurst Cycle Theory does require some subjectivity, so there’s no telling if the above is perfectly accurate, or if the current cyclical structure begins to change or feature more Variation. But if the drawings are accurate, it won’t be time for a bigger correction for several more months.
Today sure felt like capitulation in crypto. The cyclical timing of a #Bitcoin bottom couldn’t be more flawless, either. How far does it go before the week is over? pic.twitter.com/dMIuTcM44d
— Tony “The Bull” (@tonythebullBTC) November 10, 2022