New Bitcoin Bull Market or Still A Bear Market?
Honest analysis
Welcome to the Rekt Capital Newsletter, a resource for investors who want to better navigate the crypto markets with the help of cutting-edge crypto research and unbiased market analysis.
Bitcoin Goes Against The Grain Of History
There is no denying - Bitcoin is going against the grain of history, specifically late Summer history.
Historically, Bear Market Augusts have been bearish months (and so have Septembers in Bear Markets) which is why the probability for a Red August was strikingly higher compared to the low probability event we are now witnessing - a Green August.
These blue vertical boxes depicting the August-October period in previous Bear Markets just show how Bitcoin has generally struggled in late stage Bear Cycles.
Except for this occasion now, of course.
The fact that Bitcoin has reversed so much right now may still be in the context of a Bear Market Rally and there are a few reasons for that.
One of them is that, thus far, if the bottom in July were indeed the Bear Market Bottom, then price would have achieved a bottom 27% faster; one could potentially make a case for price Accelerating in its Bear Market by 27% but only if price doesn't form a new Macro Lower Low by the end of 2026.
The second reason is that price has historically dropped anywhere from -48% to -63% whenever a Macro Triangle has been broken down from. In this cycle it was just -30%.
And thirdly, this rally, though impressive, still hasn't broken the Macro Downtrend (black trendline), meaning that price is still at Macro Lower Highs, which does still keeps the technical parameters for Macro weakness.
Bitcoin - The Macro Downtrend
Bitcoin is right at this Macro Downtrend and every time price has rallied into this Downtrend, price would reject.
A Monthly Close below the Macro Downtrend as a result would set price up for a pullback.
However, this Downtrend is a dynamic resistance and so while it represents the price point of ~$79000 this month, it will represent $76300 next month.
While one could argue it therefore makes it easier to breach the Downtrend in September, if this is yet another Bear Market Relief Rally, price shouldn't be able to hold the highs for that long and instead would retrace this move to a decent extent.