Why it is not (yet) time for a major Bitcoin correction
Bitcoin price is falling and within 48 hours, while still fresh from local highs, crypto market sentiment has been immediately convinced of another big correction.
However, according to a time-based technical analysis theory, the crypto market may not correct for a while. Here’s a closer look at why.
Time is on the bulls’ side
Within days of a simple 10% pullback, crypto Twitter declares that the bear market is back, and new lows are a guarantee. However, time is on the side of the Bitcoin bulls, according to the Hurst Cycle Theory.
American engineer JM Hurst created the theory in the 1970s, and it consists of eight key principles. The list includes commonality, cyclicity, summation, harmony, synchronicity, proportionality, nominality, and Variety.
At its core, the theory looks for a repetitive rhythm of time distance, measured from bottom to bottom. In the chart below, we can see that past 50% or more corrections follow a cyclical pattern. The repeated time cycles suggest that the next major bottom will not be until January 2024 at the earliest.
Short-term cyclical behavior | BTCUSD on TradingView.com
Each of the big bottoms goes back to the last big correction in 2017. The next big bottom was the bottom of the bear market in 2018, followed by the COVID collapse in 2020. The summer of 2021 gave us another bottom, and another one came in November 2022 . But was it a long-term bottom?
Connect to long-term Bitcoin bottoms
Not only do the shorter cycles suggest that there will be no major bearish moves in the near term, larger time cycles say something similar. According to the principle of harmony, larger time cycles can be broken down into halves and thirds.
Long-term cyclical behavior | BTCUSD on TradingView.com
The smaller time cycle measured as 1/3 harmonic takes the Bitcoin price all the way back to the last major bear market lows. Another of these major cyclical bottoms with significant recap won’t come until mid-2026.
Related Reading: Why Bitcoin May Be Poised for Its Strongest Rally in Years
Hurst Cycle Theory requires some subjectivity, so there is no telling if the above is completely accurate, or if the current cyclical structure is starting to change or has more variation. But if the drawings are accurate, it won’t be time for a major correction for several months.
Today felt like capitulation in crypto. The cyclic timing of a #Bitcoin the bottom couldn’t be more flawless either. How long until the week is over? pic.twitter.com/dMIuTcM44d
— Tony “The Bull” (@tonythebullBTC) 10 November 2022
