Bob Loukas Statement about Bitcoin Right Translated Cycle (2024)

The entire goal of the Bitcoin 4 Year Cycle was to buy bear markets low, and do our best to get most of the bull market to follow. The timeframe was multiyear, not monthly, weekly, daily. It wasn’t about trading in or out. The intention was to get people in, just when everyone was capitulating.

To trade this long timeframe, we don’t have the ability to time markets, and it involves allowing for massive volatility. The exception would be a massive mania blow off; and in these cases, timing to the day or week is feasible. That was the hope; sell the top.

From the start, I said get an allocation (i.e. 20% of net worth) and hold. Don’t go too deep, to allow you to sustain the volume that would be coming. At various times along the way, I added to my position, notably on March 2020. Again, while others were capitulating!

From the early series of videos, I made it clear we are tracking a cycle possibility of reaching $200,000+ based on prior cycles. But it was very clear that almost all scenario paths were valid. I also mentioned the possibility that it doesn’t reach the prior $20,000 cycle high!

There was never a promise of the highs. Never a guarantee. And it was certainly presented as a “programmed model”.

This is also why in the first model portfolio, I scheduled take profit on 15% of the portfolio at $18,000; simply in case it didn’t make a new high. It was subsequently moved to $28,000, based on how the cycle progressed. Initial investment was taken there, although higher prices looked likely.

Fast forward to 2021, all was looking good and on track for the “primary case”. We had a frenzy move in early 2021 that fell short of being a blow off top. We had a great shakeout into June, followed by another good move upward in November.

And here is when the people told me to admit I am wrong and the cycle is invalidated.

Here is the reality. Investing in an asset with historical volatility, frequent 30% to 50% declines, and short periods of 400% runs, is not easy. The goal of the 4 year model was to not worry about volatility; instead to sit tight, invest early, and do our best to maximize the gains over the cycle.

If we responded to every major market decline, then the portfolio on that timeframe would be whipsawed, getting out near bottom of 30% to 50% declines. The opposite strategy was used, buying three of those drops, because we were still in the overall rising portion of the cycle.

When people ask why I did not sell Bitcoin at $69,000?

1. Again, absent of a major mania blow off, timing a top is near impossible.
2. The longer term trend (10 EMA Monthly) was trending higher and price above.

This brings us to today. As I outlined in the last video, I said a 60 day cycle low at $40,000 should not be taken out and remain a healthy market. I would be hedging my position there, and selling on a cycle low confirmation below $30,000. And now, that is the case, I’m hedged.

So is that a Four Year Cycle top? Has it been invalidated? Firstly, invalidated is the wrong term. Bitcoin has topped out exactly at the original Year 3 level, as was primary scenario, but only 3.5x above the prior four year high. In any book, this is a decent Right Translated Cycle.

So did it top? The short answer is, decent chance. I would estimate 50/50% and now we are coming due a 60 day cycle low. This low for me becomes the important final line in the and for the Bitcoin Four Year Cycle. This is the $30,000 level I spoke of last video.

What does this 50/50% scenario look like? See the following chart, with the caveat that these are not the only paths; but from my studies, the two most likely scenarios:

First, the top scenario is the bearish scenario drawn in red. This means the cycle topped Year 3, and we are heading for a year of declines; and probably ending in one last capitulation to test the 2017 cycle high. Not pretty. In this scenario, investors were in from $3,800 and out at $40,000 netting a 10x return on their investment.

The bullish scenario is an extreme Right Translated Cycle. We find bottom over the next week, and then over three 60 Day cycles, we move upward towards a small six figure number. Hedges get covered, and we ride best we can to top of the cycle. In this scenario, an exit around $100,000 to $150,000 would net investors a 30x on their investment.

For the bullish scenario, I doubt we reach a mania peak. This setup, because of the wide consolidation currently happening, would allow for a relatively short bear market to reach the next cycle low, setting up for a mania run in the early part of the next cycle. And that move would be followed by a true secular bear market of three years.

If anyone is looking for me to admit something, you’re surely mistaken. Every video has been about sensible and responsible sizing. Getting into the market early, with multiple opposing scenarios. Be ready for the worst case, hold during the volatility, accept outcomes, and get out the best we can.

Trading on a wide timeframe is similar to steering the Titanic. It takes a lot of price evidence and time to make changes. I build a strong opinion based on theory, to formulate a trade strategy, to watch for bias, and to respond when price action says otherwise.

If anyone has remotely followed this entire strategy, they should have a relatively calm experience throughout; and in the worst case, come out with a 10x return on their investment. All without needing to be trading. That is the worst case scenario from here! That is not something to apologize about.

I’m waiting for this 60 Day cycle to form a bottom, possibly this week, very likely by next week. And then I will record another video and cover these ideas.