Can the cycle tool predict bottoms?

In this episode of NewsBTC’s Daily Technical Analysis video, we use the Hurst Cycle Theory and Circular Tools to examine major Bitcoin price troughs to see if bottoms are likely and if another bubble is coming. Consider.

Watch the video below.

Video: Bitcoin Price Analysis (BTCUSD): Nov 7, 2022

Cyclic behavior of Bitcoin analyzed

The halving of each Bitcoin is included to aid visual analysis. Half-life has been widely discussed as a factor driving internal supply and demand mechanisms. We know Bitcoin visually bottoms out before each halving. A logarithmic growth curve is also included for visual assistance.

The next step is to turn on the spectrogram. A spectrogram is a visual heatmap of a signal’s frequency spectrum over time. The more green heat there is, the stronger the bullish strength. In contrast, the more purple heat on the map, the stronger the bearish intensity and the place to look for a cyclical bottom. Within each purple zone there is a cyclical trough of dominant cycle fading.

Is a new Bitcoin cycle about to begin? | Source: BTCUSD on TradingView.com

Related reading: Litecoin Recovery to End the Ongoing Crypto Darkness? LTCUSD Nov 2, 2022

Why this bear market felt so extreme

The next step is to identify the dominant cycle by progressively removing the harmonics. According to Hurst cycle theory, there are 2 and 3 harmonics of a cycle. Essentially, there should be 1-2 mid-cycle dips from each major trough to trough.

Defining the harmonics of the intermediate cycles not only helps to ascertain the phase of the dominant cycle, but also helps prove the Hurst cycle theory to be accurate. Note that periodic valleys tend to bottom out in tandem. The principle of addition explains why the recent sell has felt so long and extreme. This was the sum of larger composite waves and smaller harmonic waves.

Why BTC Is Gearing Up For Another Bubble Cycle

The final step is to complete the phase. For additional confirmation, the Fisher transform is used. This helps identify the exact turning point in the market. Also the Stochastic RSI is used. In this system, a new bull market is confirmed as the Fisher Transform highlights a potential tipping point and the Stoch RSI rises from oversold levels.