Market Cycle Review & Peak Forecasting Strategy: Bitcoin and Ethereum Analysis

Bitcoin: From Foundation to Current Rally

The Market Foundation Phase (November 2022)

The current bull cycle originated from the depths of the 2022 bear market. Bitcoin descended to its lowest point around $17,000 following the FTX collapse, creating an environment of extreme capitulation. During this phase, retail panic reached fever pitch, with widespread predictions of sub-$10,000 levels. The sentiment was undeniably bearish and defensive positions dominated market sentiment.

The Consolidation & Breakout Phase (January-February 2023)

After two months of sideways consolidation, a recovery momentum emerged. Bitcoin climbed from the $17,000 lows toward the $31,000 range. This turnaround triggered a sharp reversal in market psychology—the same voices that preached disaster suddenly pivoted to euphoria, with aggressive calls for 100X leverage positions and year-end targets of $100,000. This phase exemplifies the emotional extremes that characterize market cycles.

The Correction Test (Mid-2023)

As FOMO sentiment intensified, an unexpected market correction arrived swiftly. Bitcoin dropped approximately 20%, hitting $24,000 and testing investor conviction. This dip reinforced doubt among over-leveraged participants and served as a healthy consolidation before the sustained uptrend.

The Explosive Rally Phase (Present)

Following the $24,000 double-bottom formation, Bitcoin never returned to the $20,000 range. The asset rallied from $24,000 to $48,000, and subsequently to its current trading levels. Spot positions were strategically accumulated around $46,000. Current snapshot: Bitcoin trades at $87.72K with an ATH of $126.08K, suggesting continued upside potential though rate-of-change has moderated.

Peak Prediction & Exit Strategy

Historical patterns suggest a potential target range of $140,000-$150,000. This do no harm, take no bull approach prioritizes capital preservation through disciplined profit-taking. The primary exit signal will be confirmed when daily-timeframe downtrend indicators materialize. Additionally, a 30% pullback from current levels or breakdown below $80,000 would warrant portfolio reduction. Position protection through gradual liquidation upon clear reversal signals remains the priority.

Ethereum: The Volatility Paradox

Ethereum’s performance has been a mixed blessing. Purchased at $3,000 during the same January 2024 timeframe as Bitcoin entries, ETH experienced a devastating draw-down to $1,300 at cycle lows, followed by a recovery to $4,200 at cycle highs. This whipsaw volatility delivered greater emotional stress despite ultimate profitability.

Current Status: ETH trades at $2.94K with a cycle ATH of $4.95K.

Position Management Logic:

• Hold condition: If Ethereum breaks and stabilizes above its previous cycle high of $4,900, maintain full exposure
• Exit trigger: A decisive breakdown below $4,000 signals risk management and profit-taking is warranted
• Strategic approach: Synchronized with Bitcoin directional bias; Ethereum typically leads or lags BTC by 3-5 days

The current spot profit margin hovers around 60% from entry, yet leverage considerations demand stricter exit discipline than do no harm capital strategies typically employ.

Altcoins: Selective Patience

No substantial altcoin positions were accumulated during this cycle. The philosophy remains: avoiding losses is often superior to chasing marginal gains. End-stage bull market altseason may still materialize, but without pre-positioned exposure, the optimal strategy is observational rather than participatory. Selective opportunities may still present themselves in the final rally wave.

Derivatives & Contract Strategies

Contract trading has been deprioritized in this cycle, with a focus on medium-to-long-term positioning rather than short-term speculation. A modest ETH short position remains under consideration, with stop-losses positioned above the previous cycle high as risk guardrails. Patience in contract markets often outperforms aggressive position-taking, particularly in mature bull phases where volatility tends toward the downside at cycles’ end.

The Core Principle: Capital Preservation Over Maximization

The overarching lesson: do no harm by resisting over-leverage, take no bull through disciplined profit capture before euphoria peaks, and lock in gains when technical signals confirm distribution phases have begun.