The long-held belief in the predictable four-year crypto market cycle, characterized by distinct phases of accumulation, uptrend, distribution, and downtrend, is being questioned by analyst Jordan Fish, better known as Cobie. He has articulated an argument that challenges this traditional view, suggesting that the concept of a cyclical market may no longer be true.
Cobie sparked a debate on X (formerly Twitter) with his statement, “Not ironically (the bull run) hasn’t even started yet.” This statement was met with disbelief from some, including Maher Abdelsala, who commented, “Brothers, people think you’re serious, haha.” Cobie clarified his position, stating, “I’m serious! I’m increasingly liking the argument that this isn’t even a ‘cycle’ really, but more like 2019 with leverage and ETFs.”
The end of the traditional crypto cycle?
Cobie’s perspective hinges on the notion that the structural dynamics of the crypto market have fundamentally changed. He draws parallels to the market conditions of 2019, but with significant differences influenced by the proliferation of leverage and the introduction of Bitcoin and Ethereum exchange-traded funds (ETFs). “Was 2019 a new ‘cycle’ or was it part of the bear market?” Cobie pondered. “I pitched this idea to a few people in March, but they all told me I was an idiot, which I am, but it was still very rude to say it to my face.”
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The introduction of ETFs and the increased use of leverage have brought new complexities to the market. These instruments have changed the way capital flows in and out of the crypto ecosystem, creating a less predictable and more fragmented market landscape. Cobie emphasized: “Of course, if we’re in 2019 looking ahead to 2024, that doesn’t mean 2020 will be the same way, because structurally a lot of things are different now with ETFs and high-cap FDVs and shit, probably very difficult to match patterns… a lot of things about the future.”
Cobie’s analysis suggests that the current market exhibits a high degree of dispersion, with various assets behaving differently rather than moving in unison as seen in previous cycles. This dispersion makes it difficult to identify a single driving force or pattern that governs the entire market. “I think this cycle is so different from any other that it’s probably best to just stop thinking about cycles,” Cobie said. “It’s clear that there’s not a single thread pulling everything forward like there used to be.”
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This view is reinforced by the performance of certain cryptocurrencies. For example, Chainlink (LINK) and Dogecoin (DOGE) are cited by Cobie as examples where traditional hype and subsequent price appreciation may no longer apply. He explained: “I think there’s a very strong likelihood that things like this will never reach new highs again and LINK could continue to exist as a highly successful oracle without the price appreciation.”
The echo bubble phenomenon
In the context of market maturity, Cobie referred to the concept of “echo bubble”, popularized by renowned trader GCR (Global Coin Research). The echo bubble theory posits that a smaller bubble follows the bursting of a larger one, as observed in 2019 after the big rally in 2017. Cobie expressed surprise at GCR’s recent market behavior, noting: “I actually found it very odd that GCR kept talking about the echo bubble when he was bullish on the lower peak, but when shit started getting silly, he just bought the dog with hat NFT and broke his hiatus to come out and tell people not to sell.
Overall, Cobie believes that the market is currently in a “multi-month/multi-quarter reaccumulation period” for Bitcoin. He expects Bitcoin to trade in the $45,000 to $70,000 range, with the possibility of a brief breakout to new highs. However, he is bearish on the future of many altcoins, especially those that have survived. multiple market cycles. “I definitely think all the sudden memecoin theses marked an intermediate top for general risk appetite, and everyone has been conditioned to the max once they think we’re ready to try again.”
He predicts that many of these older altcoins will “slowly fade away and become irrelevant” as speculative investments. This outlook suggests that the market’s risk-on paradigm, characterized by rapid and extensive price increases, may not resume any time soon. He concludes: “Long story short, I think we need a lot more time before the (real) risk-on paradigm kicks in again, and I expect more downside to come before that happens.”
At the time of writing, Bitcoin was trading at $51,104.
Featured image from iStock, chart from TradingView.com