Bitcoin and Crypto Cycle Outlook

Added: 2026-06-02

[00:00:03]Hello, I'm Craig Tapin from Mastering the Markets. Today I thought I would take you through a little bit of Bitcoin and the crypto cycle. Looking at the cycle that's gone, looking at where we are in our correction, >> [music] >> and what we could probably expect next.

[00:00:19]So, when we look at the macro environment, and I first wanted to start off with the macro environment of the last cycle, a lot of people went into altcoins and went deep into altcoins expecting what they saw in 2016-17, were expecting what they saw in 2020-2021.

[00:00:36]And if you'd taken that strategy into the last cycle, 2024-25, it didn't work out that well. And why it didn't work out that well was the macro environment was completely different to any other environment that we'd seen during any crypto cycle since since [music] Bitcoin started, and certainly since the altcoins came around in their first big cycle in '16-'17.

[00:01:02]So, what was so different about that macro environment? So, what I've got here is the last three cycles. And I'm what happened in the previous cycle, '16-'17, and what happened in 2021, are incredibly similar. So, I haven't bothered putting the detail on that just so that we can see the charts a little bit better.

[00:01:20]So, when we look at 2020 and 2021, we had the Bitcoin halving. But when we had the Bitcoin halving, what we had was we had moved from a high interest rate environment during the correction to a virtually zero interest rate environment. And what we also had is uh coming out of COVID, we had the COVID stimulus. And what we saw was central banks buying assets on their asset on their assets on their balance sheets that absolutely pushed up >> [music] >> the quantitative easing, in other words, printing money to the tune of 12.2 trillion dollars. So, 12.2 trillion dollars was injected into the global markets. Now, if you think of the total crypto market cap topped out at 3 trillion at the top of 2021, you know, the size of that 12.2 trillion dollars stimulus was quite significant. So, low rates, cheap access to money and 12.2 trillion dollars of money printing went a long way to give us an incredibly strong >> [music] >> period. And And something very similar happened in '16, '17. But, what we saw in alts is we saw alts outperform Bitcoin. So, Bitcoin did respectively, but the speculation on alts where was where real real money was made. And total two, which was a combination of all of crypto excluding Bitcoin, went up 3,422%.

[00:02:55]The average altcoin 30 to 35x, which [music] is pretty remarkable and creating life-changing money. However, when we went into this last cycle, the conditions were really, really different. In the period of going into the cycle, the central banks did quantitative tightening. They actually removed 7 and 1/2 trillion dollars of liquidity out of the market. They sold off assets. So, the exact opposite of what they did during the period which stimulated speculative assets is they did the reverse. They removed 7 and 1/2 trillion dollars out of the market. And at the same time, we put up interest rates higher than what we've seen in absolute decades. So, the access to money was a lot more expensive and the liquidity that was happening was was incredibly sparse compared to the liquidity injections that we saw in '16, '17 and we saw again in 2021.

[00:03:52]Now, all of that did change in 2025 and we started to see interest rates starting to be eased back by a few countries. So, European Central Bank was quite progressive in in reducing rates. Uh the US were a little bit slower. But, what we started to see is we started to see rates coming back down and we started to see liquidity going up in 2025.

[00:04:18]And what we had made is a slightly higher high we had made a high we had made a higher low and it looked like we were actually going to have a change of market structure on liquidity and start to see liquidity pump up. But, what happened was the war. The US-Iran war happened and suddenly the central banks had to start tightening because they were worried about inflation. So, easing stopped and we went back into tightening mode and the rate cutting cycle that was really poised to continue cutting created a a stall effect. So, none of the central banks, well, Australia's hiking rates, but everybody else is holding rates at this moment of time.

[00:04:58]But, if inflation doesn't ease, more than likely they'll look at putting rates up again to get on top of inflation. So, what we've had is liquidity was changing for the better in both in terms of interest rates and that that was going to set us up for probably a really good 2026 that would have seen alts have a bit of a run. But, with the war now and inflation it's now been stalled. And we're going to have to see how the the next few months pan out and and we're on the cusp of, you know, do we have an agreement? Do we have a permanent ceasefire? Do we have an end of a war? Or are are we going to escalate again? And I think what happens there is going to determine the trajectory that we take from here. But, what you can see here is Bitcoin did okay. Bitcoin had institutional investment. Bitcoin had ETFs. Bitcoin had, you know, big strategic reserve companies like MicroStrategy buying a lot of Bitcoin. So, Bitcoin still 6x from 15 and 1/2 K to 126K, but the altcoins didn't. So, from that from the sort of low in in late 2023, um all the way through to the top, altcoins only went up 225%, very small amount. So, to the average altcoin doubled or 2 and 1/2 times, which is very different to the 30 to 35x that we got the previous cycles. So, a lot of people were waiting for a lot more in altcoins, and that was it, and it started pulling back. And now most altcoins have pulled back 70, 80, and some of them 90% from their highs. And what we have to do is we have to wait for the liquidity situation and [music] to improve and be, you know, more favorable for crypto. So, when we look at the technical structure of Bitcoin and we look at the chart of Bitcoin and where are we? There's two scenarios that I see from here. The first scenario is the scenario of the low is in. The low of 60K in on the 5th of February, that is in, >> [music] >> and from here, there's a structure that we've had a 1 2, and what we were in is the wave three, and we've had a lower degree 1 2, and now we just waiting for the 3 4 5, and then we have the bigger 4 5. So, this pretty much says we are ready to start the next cycle. And don't worry about the targets here, because the targets, you know, all I'm trying to do is show you the wave structure that we would have in terms of a new cycle.

[00:07:23]So, that is the bullish scenario. The flaw that we have in this is the amount of time that wave two is taking. So, wave two needs to be a three-wave move, and so far we've had 1 2 3 4 5 waves down, but which could be a A wave. Now we're looking for a B wave bounce, then we're looking for a C wave down to complete the lower degree wave two. But, in terms of time, we are we are already 25 days into this wave two. And if you sort of extend it out, you have it roughly 42 days that [music] it will take to put us in the low sort of middle of June.

[00:08:02]Um and that [music] is significantly longer than the higher degree wave two, which only took 12 days to play out.

[00:08:08]>> [music] >> And it's it's not impossible. Nothing time time isn't a condition, but it is it lowers the probability >> [music] >> that we will have a lower degree wave two that is potentially three or four times longer in time than the higher degree wave two.

[00:08:29]>> [music] >> So, this is one scenario. It certainly is what we wanting to see is we wanting to see it putting a higher low. 65k is the invalidation. A lower degree wave two cannot take out the low of the higher degree wave two. So, what we would look for here is we would look for um a bounce and a move up above 65k. So, we've come down to 73k. We could come, you know, have a have a small bounce back up to 77, 78, 79k, and then have another wave down, but we cannot take out 65k. If we take out 65k, this scenario is completely invalidated. When we look at the second scenario, the second scenario is we are still in a correction. We have a complex correction, an ABC in a W, an ABC in a Y, and we still due to have an ABC in a Z. And these are linked with what we call these link waves, these X waves, which are corrective in nature, and just they link the the three bigger corrections. This is quite a complex type of correction, and you know, from Elliott wave, we call this a triple three combination. And this is potentially the the higher probability play.

[00:09:40]>> [music] >> And if we look at that this move up instead of it being a 1 2 1 2, we're looking at it being an ABC move to complete the X and we're looking for a bigger ABC move that will sweep the lows of the 60K from February to put in the Z. Now, how low does it have to go?

[00:10:00]Well, it it it doesn't have to go.

[00:10:03]Ideally, it has to sweep the Y and put in a lower low than the 60K, but it could put it in by just marginally or it could be substantially. So, it could be anywhere in the 50s. Uh my sort of guess and my feel based on liquidity and and price action and previous CME gaps is probably round about that 54-55K would be a decent target if we did get the scenario playing out. And then from here, that could potentially be the bottom and we could see a a move up. And initially, the move up, you know, maybe a one becomes really slow, it becomes grinding, it becomes like an accumulation. And we might need to wait for the liquidity situation to improve before we actually start to get a a more sort of a bigger wave three, more impulsive move to the upside. So, when we look at those two scenarios and we look at where we are right now, what we can see is we've had the scenario before. So, the last cycle from the 2020 November 2020 one high, we actually had this exact cycle that played out is we had the W, the X, the Y, the X, and then we had the Z. And everyone thought that the low was in here round about 17-18K and then we dipped below during the FTX scandal. But what we had is the two X waves actually had decent bounces. So, the first X wave had a 45% recovery bounce. The second X wave, so which from the Y bottom to the X top had a 46% bounce. And so far when you look at where we are, the the first bounce that we got in our X was only 20% and this last bounce was 37%. So a lot of people are saying that the strength in this move means that we're not going to have a repeat of 2022. But when you actually look at the gains that have been made in our two bounces this time round, 20% and 37%, we actually are smaller bounces than what we got at the 45% and 46%. Yes, the moves down were also bigger, so that means that the bounces could be bigger, but we're not overly strong here at a 37% move up from the 60K lows. We're still absolutely in the realm that we could potentially put in a lower low. In terms of how the scenario is playing out and how the current scenario is playing out, and try to get a feel around timing of when the final low could be in is when we look at 2022, our Y bottom happened on the 15th of June and that also corresponded with where [music] the weekly RSI for Bitcoin bottomed, the 15th of June. When our Z bottomed, it was actually 161 days later. So five and a half, just short of five and a half months after we bottomed in June, we bottomed again in November in price, but we bottomed with bullish divergence on the RSI and then from there we went into a bit of an accumulation. This was really quite shallow in terms of that move from 15 and a half K to to 32K, back to 25K, and then we started to pick up the pace when we sort of broke above [music] that 35K mark.

[00:13:15]Now this time round, our Y bottom came in on the 2nd of March and that also came down to pretty much the exact same level on the weekly RSI as where we came down on the Y wave back here on the 15th of March. Now, since we put in that bottom, we 84 days on. In terms of timing, if we were to see something similar in terms of putting in a bottom, we potentially could take up to another 80 days before we see that. So, it could be another 2 to 3 months before our Z wave to fully complete. So, we were in the X, we look like we could potentially started the Z, but we could have a little bit more to go. So, from here, key levels to watch, you know, you got major resistance at that 77 to 80k. So, if we do get a bounce here in that B wave bounce, [music] we're going to be looking to probably get rejected at that 77 80k. If the low's in and we smash through it and we carry on going, then that's fantastic. But, if you get a bounce here from 70k, I'm looking for probably a B wave bounce to 77 80k range and then looking for a C wave down. Key support, 60 to 63k is is the really key support. However, if you're wanting that first scenario to not be invalidated, then we need that higher low. And that higher low means it cannot take out 65k.

[00:14:40]So, we actually want a a low no lower than sort of 66k and bounce from there.

[00:14:46]But, um if we lose 65k, then we're realistically looking at sweeping the lows, which means that we go under 60k.

[00:14:54]From a 161-day sort of analog from the 2nd of March RSI low, it takes us into that late July, early August type range that we potentially could have a low in Bitcoin. Now, that doesn't mean that we start immediately go into a a massive big impulsive move up. It means that we could have our low, and then from there we can start building a base and we can start that sort of next accumulation.

[00:15:20]And that next accumulation could take 6 months, 9 months before we actually start to break up impulsively.

[00:15:27]The other big catalyst is going to be liquidity. And as I went through, the crypto cycle really needs liquidity.

[00:15:33]Now, Bitcoin potentially doesn't need liquidity because of all the institutional adoption, but the altcoins certainly do. So, if we were you wanting to go into altcoins, you need to keep an eye on what the European Central Bank do, what the US Fed do because what they do with liquidity, what they do with interest rates, and what they do with quantitative tightening versus quantitative easing is certainly going to determine whether or not we have a good alt season the next cycle or not.

[00:16:00]So, at the end of the day, bottom line, both scenarios remain live until um 80 80k clears on the upside. If we break convincingly above 80 85k and keep on going, I think that we have invalidated the bearish scenario. However, if we get rejected at that sort of 77 80k and head down, then we're potentially looking for a new low before [music] the end this this correction. So, that's what I've got for you. Hope you enjoyed it. Have an awesome week.