Summary Based on time, price, and technical parameters, Bitcoin has exhausted its bullish momentum. We executed a full exit at ~$110k to lock in 175% returns. A breakdown below $75k is the critical confirmation of the bear market. This level invalidates the bullish thesis and signals a deeper correction. We are projecting a decline to about $36k by late 2026. This aligns with historical support levels and marks our planned re-entry point. We anticipate a "boring" year of decline. As long-only investors, our strategy is strictly capital preservation until the market hits our deep value targets. The Case For Our Exit In our previous article back on 2nd May 2025, we explained that Bitcoin ( BTC-USD ) had reached its minimum one-year bull market and we should expect headwind to build up through October (last month), which mark its maximum bull run duration across all 3 past halving cycles. We also communicated the intend to offload and liquidate all Bitcoin positions during the period, which did not resonate well with the Bitcoin community. Nevertheless, we followed through by exiting half of our Bitcoin position by 22nd May (3 weeks later) at $110k and waited for the rebound our quant model projected before remaining half by the end of October 2025. The rebound predicted by our models, published in May 2025. (Author) The Article Update On Our Bitcoin Trade (Author) Our full Bitcoin exit coincided with Bitcoin's top and a 30% decline shortly after. Whether it was due to luck or our models, one thing for sure is that the decision was a strategic decision based on Bitcoin's decade-worth of data points. And since events unfold just as our model(s) projected, it suggest a bigger force (Bitcoin's 4-year decade-old Halving Cycle) is at play. The Force Behind Bitcoin's Current Price Action On the Time Parameter , Bitcoin's bull run is well spent. Back in October 2024, we entitled our Buy Call " The Stars Align For A 6-Figure Bitcoin And Beyond ". In that article, we not only outlined the strongest buy thesis ever in our coverage on Bitcoin, but also pinpointed October 2025 to be the reasonable end of Bitcoin's bull cycle. During the 2012-2016 halving cycle, Bitcoin's bull run lasted about a year, from November 2012 (Bitcoin's first halving event) to November 2013. During the following 2016-2020 halving cycle, the duration of Bitcoin's bull run increased from 1 year to 1.5 years, from July 2016 to Dec 2017. During the previous 2020-2024 halving cycle, the duration of Bitcoin's bull run remained at about 1.5 years, from May 2020 to about November 2021. This figure shows the average bull run during Bitcoin's past 3 cycles. (Author) On the Price P arame ter , Bitcoin has also reached its minimum Bitcoin bullish price target of $100k. Anything above $100k is a bonus to us as it no longer has any statistical edge. This $100k target also isn't a random target, but is backed by an observation we coined as "Bitcoin's Diminishing Return". During the 2012-2016 cycle, Bitcoin returned 100x (from $12 to $12,000) within 1 year of the Bitcoin halving cycle. However, Bitcoin's return in the following 2016-2020 cycle was reduced from 100x to 32x (from ~$660 to $19,000) and was further reduced to 8x (from $9,000 to $69,000) in the following 2020-2024 cycle. Hence, the base price for the current bull market would be $42,500 (= [$69,000+16,000]/2). A 2x-3x return implies a Bitcoin price target between $85,000 to $127,500. On aggregate, we set our base case price target to be $100,000 On the Price Action Parameter , A premature Head-and-Shoulders reversal pattern was completed (coincidentally) by April 2025, which suggested the start of a mechanical transition from bull cycle to a bear cycle with specific price actions: The same head-and-shoulders pattern occurred with the exact timing (1 year after the halving event) The same pattern of head and shoulders also occurred around the same resistance level. The reversal patterns were valid, and the price reversed, followed by a rebound higher. Following this narrative, we could see Bitcoin topping in July . Based on all these observations, we planned and mechanically executed our exits without any FOMO or emotions. The End of a Chapter: A Closure To Our 2022-2025 Bitcoin Play Our full exit also marks the end of our 3-year Bitcoin trade started in 2022. In May 2022 , we issued a sell alert after projecting a Bitcoin crash down to $10k while Bitcoin was its previous ATH ($60,000). We set our buy zones at " 25% now ($39,500), 25% at the 50% retracement ($32,500), 25% at the 70% retracement ($19,500), 25% at the 85% retracement ($9,750). " Over the course of the following 2 years (2022-2024), we entered at the mentioned zones and started preparing for the 2025 Bitcoin Bull Run. Bitcoin bottomed out at around $15k, and we accumulated our Bitcoins. We also looked for ways to maximize returns through staking and by looking at Futures ETFs and Bitcoin miners . We eventually identified MARA Holdings ( MARA ) and CleanSpark ( CLSK ) to be the big winners in the 2025 bull run. Finally, the stars aligned in October 2024 and we went all-in as Bitcoin break above $70k level. We also scaled into MARA and CLSK but quickly retreated when we identified a general weakness in the Bitcoin mining sector. Turns out, it was the right a call. This figure illustrates the return since we exited our miner positions and scaled back into Bitcoin. Bitcoin outperformed during the period. (YCharts) In Jan 2024 , we projected Bitcoin to complete its short-term Heads-and-Shoulders reversal move from $100k to $75k and made another call high probability buy call at the $75k level. Bitcoin eventually followed through on the projection and rebounded to new ATHs (at $120k) shortly after by July 2025. The projection published in Jan 2025 that Bitcoin will decline back to $75k before reaching ATH. (Author) Starting from May 2025, we started our profit taking exercise. Overall, our Bitcoin return over the past 3 years is about 175% (or about 60% annualized after accounting for staking rewards) with average entry price at about $40,000 and exit price at about $110k. This excludes "side trades" such as the 2x CLSK play in June 2023. Overall, this isn't a bad return compared to the S&P500's 50%-70% return over the 3 year period, but it significantly underperformed the AI sector (e.g. NVDA return 1,800% over the same period). Even IREN, which isn't desirable as a Bitcoin mining company , became in trend as an AI data center play and returned as high as 7,600% (from bottom $1.02 in Dec 2022 to top $76 in Nov 2025). Maybe we should've participated in the AI plays more. The Next Chapter: Our Bitcoin 2026-2029 Playbook So what's next for us? Following our Bitcoin narrative, we expect Bitcoin to decline over the next year. This is because Bitcoin typically follow a 4-year cycle: a 1-year bull market, followed by a 1-year bear market and a 2-year recovery period. This implies that Bitcoin is expected to decline through Nov 2026.Hence, we will generally avoid the overall crypto market until Nov 2026. The Bitcoin bear cycle is expected to span through Nov 2026. (Author) In addition, there are also fundamental reasons to avoid Bitcoin in the short run. Bank of America recently issued some dire warnings regarding the broader market and economic conditions, particularly concerning the sustainability of the AI investment boom and AI CAPEX financing. With news like OpenAI turning to the government for guarantees and the AI circular deals , these events suggest that a black swan event may in fact just be a trigger away in the near future. From an NVDIA ( NVDA ) earnings miss to a leak memo from any big tech or hyperscalers indicating intent to scale down AI expansion, anything can be the a trigger to a black swan event. Regardless of these events, what we can do as traders is to model after what has happen and to play our cards close to it. For Bitcoin, we should trust in its cyclical characteristics as it is hard coded into the algorithm. Every roughly 4 years, Bitcoin will undergo its halving event. After each halving event, Bitcoin will enjoy a massive bull run break ATH for a period of time. Is there some entity ensuring this? We don't know. All we know is that if this doesn't happen, the Bitcoin mining sector will become unsustainable as their all-in production cost per Bitcoin doubles (same expenditure but half the Bitcoin production). Hence, if there is some entity that ensures this mechanism, it is to our advantage. After the bull run, Bitcoin has always suffered a 1-year devastating crash. However, the sequence of events were consistent. Another reversal pattern near the current ATH. A 50% decline from the latest ATH. A dead cat bounce to reach 20% from the latest ATH Another decline to 70% away from the ATH. Bottoming out at 80%-85% away from the ATH. This is where we think Bitcoin is heading to. The past bear cycles were preceded by double tops and head-and-shoulders reversal patterns, but the current bear cycle might be triggered by a bearish divergence (Fig 1). This trigger, when substantiated with the time, price, and price action parameter, constitutes a (very) high probability bearish setup that bulls shouldn't ignore. Fig 1. Bearish Divergence may mark the start of Bitcoin's 2025-2026 bear cycle. (Author) That being said, we're still early in the setup. The confirmation we need to see is Bitcoin making a valid breakout below the $75k level. The $75k level is the critical level because it was the valid breakout breakout price that triggered Bitcoin's bull run beyond the previous $70k ATH to the current $120k ATH. This is the price level Bitcoin has never visited in any of its previous 3 bull runs. In other words, the break below $75k should invalidate any bullish thesis and thus confirm the our bearish thesis. The key levels (updated) we'll be eyeing are as below: Decline to the 50% key level: $60k A dead cat bounce to $96k Another decline down to $36k Ultimate long-shot bottom at $20k Personally, we look to deploy our full Bitcoin capital by the $36k price level because it coincides with Bitcoin's Bitcoin's decade old support. It is the level Bitcoin has never broken since its inception and marked the bottom of all bear cycle. Fig 2. Bitcoin's lower channel has always marked the bottom of a bear cycle. (Author) Closing Remark As a long-only growth investor, our mandate doesn't allow us to short the market while our bearish thesis prevents us from going long. Hence, the coming months will likely be a "boring period" for us. However, boredom is often where discipline is tested most. Not investing is just as active and strategic as being invested and its certainly better than overtrading. We are effectively positioning ourselves in cash to preserve the gains from the 2022-2025 Bitcoin play. While the market navigates the likely volatility ahead, we will be monitoring the $75k breakdown and the subsequent levels closely.
