[00:00] hello followers of the four year journey i hope you're doing well bob lucas here june the 7th 2022. been about six weeks since the last video want to do a follow-up to that just talk about really the bear market at this point there of course is zero doubt now that the bear market is here i think every last remaining holdout it has capitulated on the idea and it is now common knowledge of course that were in this bull market trend the
[00:30] last video i did talked about the top already in when bitcoin i think was around about 40 000. confirmation was certainly in place of that top and we've since of course seen price move as low as 25 000. i don't think that's going to be the end of it and i'll talk about that shortly so i'll talk about the update on the four year cycle bear market thinking and how we want to transition the thought process to bear market and not fear uh which is pretty common in a bear market
[01:01] i also want to spend some time on a little bit of a reflection on the cycle sort of what what went well what could have been done possibly better and then just talk about sort of a portfolio update to end the video probably won't be a long one so let's get stuck into it let's begin of course with the monthly chart looking at this from a four year cycle perspective of course green arrows representing four-year cycle lows red representing the peaks in the cycle um
[01:32] the one takeaway of course is that uh from a cycle structure perspective from a timing perspective only it really has been a perfect four year cycle to this point uh the top coming in right at year three a technical top months before that and then the distribution phase to that peak for a price high and now in the final year of decline this period here was a period i expected
[02:03] a top when i first published a video three and a half years ago that was the timing band and the area for the top of course and i've covered this in prior videos what we didn't see and there are multiple reasons i believe for us not seeing that was that run to the six figure range okay that was at least my expectation i think in general it was um an expectation that most people held in this space and that expectation i think really is born from
[02:33] the idea that these extensions in four year cycles will typically add sort of this 10x and more from the prior high of course there's a diminishing return and that was always something that was factored in each prior high of course is not going to move anywhere near as high as the prior high purely because as market cap increases it just doesn't make it's not feasible for um you know for a cycle to extend to that to those levels even given that
[03:05] idea this uh i think was a somewhat of a premature blow-off didn't really reach any of those peak mania phases of of course looking back in hindsight there were plenty of signals that the marker was heated i just don't think it reached that real media phase that you saw of course in 17 into that peak and even prior peaks as well even though the ecosystem was more contained and smaller in prior cases certainly not in 17 where we had the
[03:35] massive breakout in coinbase users and other users across the board just didn't see that and for that reason i think this made it a lot more difficult for a four year cycle compared to the prior four-year cycle as you can see from this four-year cycle it was just one tremendous trend that just gained in its rate of change to the peak and uh ended with a really classic sort of blow off top that even in real time in my opinion was
[04:06] fairly easy to spot didn't have that type of extension right here although it got extremely heated at one point into that february march april sort of peak back here in 2021 just didn't reach those levels and it reached those levels a little early in the expectation for a four year cycle and i think that's where at least on my behalf it became a little difficult to spot a peak or a top especially as it made a new price high at that point but since then once we lost that
[04:36] 10-month moving average and closed below the 10-month moving average i think that's where it really was pretty clear at that 40 43 000 level at the peak was in and that's the reason why i went ahead and sold uh for the second time some of the position in the model portfolio where are we now that's the real question well i think it's pretty simple and pretty easy to answer right here clearly with the move below the 10 month moving average
[05:07] here and now the 10-month moving average in a declining phase you just don't see a declining 10-month moving average in a bull phase of a market or if you do it's more of a flat line kind of like as you saw right here that was accentuated here by the marsh 2020 covert decline and that pulled it down slightly but now we're in a full-blown declining phase we know that from price and what we're seeing here we know that because we're now into the
[05:37] fourth and final year of a four year cycle we also know that purely from the resignation in general of all participants in the space all you know all the influences all of retail you know that through capital flows into the space we know we're in a bear market and that fits the four year cycle timing perfectly at this point so we're in that declining phase and the question then of course ultimately becomes is this the bottom
[06:08] where is the bottom going to be and the short answer is like the like my analysis has been almost from the very beginning that almost any path is feasible that we should focus more on time than price if you recall in many of the earlier videos you know i wasn't even sure if this four year cycle could even make a new all-time high i warned that you know you can get a cycle that fails to make a new high that can grind sideways for the full four years before
[06:38] moving higher there are multiple versions of a four year cycle from a price perspective and the same applies now as we now head towards the next big four year cycle low what i'm most confident about and again that's never perfect that's never an absolute but what i'm most confident about is that we need to see more time unfold in a negative or a bearish environment
[07:08] to get through this current cycle for the next bull market to be born and that means grinding through the next sort of four to six months into that timing for a four-year cycle low the four-year cycle low is due in december of 2022. that cycle low again is never absolute right cycles have this variance of where they could form
[07:38] and generally i would say one 60-day cycle on either end a 60-day cycle is a two-month period one 60-day cycle early or 160-day cycle late would be a more accurate window of expectation for a cycle load so then that puts us into kind of this october time frame and then as late as a february time frame for where the next low would likely form in an extreme
[08:08] situation we could look two cycles back so four months back that again would be extreme and that puts us more into the august or september time frame now an argument could be made that one reason and it's actually more than probably just an argument at this point but one catalyst for not really seeing that big blow off was the fact that the fed and being an asset class that now has attracted a significant amount of institutional
[08:40] adoption and institutional capital that capital now has to be viewed in terms of more of a broader portfolio and more of a broader allocation strategy and when the fed really made it clear that they were moving into sort of this risk-off environment an inflation fighting stance that sucked whatever when was left out of this uh this market and crypto bitcoin being more on the on the speculative end
[09:10] on this with the higher volatility it made sense that that really did lead the markets lower and there's also the element of china really clamping down this time it wasn't just torque it was a sort of an outright ban in general and that really did have an impact on this market a significant impact on this market so the combination of those two and the fact that again from cycle to cycle we see this on either a 60-day time frame or sort of
[09:41] that 10-month cycle or the four-year cycle in any cycle in any asset class they don't rhyme perfectly okay they mirror to some extent um but they don't have to look and form and have the same structure and that's another case in point right here so you've got a combination of one an expectation that a cycle must mirror the one other one perfectly which is not true two we've had this china and we had uh
[10:11] the feds which is probably the the more impactful um influence on this four-year cycle um so that has brought us down now but the my point on the the fed action there was that it may in it may also have this uh uh effect of forcing the market into a bottom sooner as well if the economy slides quicker if inflation numbers come in or drop sooner it's possible and if the equity markets
[10:43] begin to really sort of implode or if then you may get a forced cycle low situation if you get some extreme kind of events occur then it's possible that the cycle low could come in early and like i was saying before that could be as early as i think the august time frame or september time frame for an induced cycle low unfortunately in that type of scenario when you get an early cycle low form my experience has been with other asset
[11:13] classes early cycles normally come with extreme events so a significant capitulating like event high liquidity event and so if we were to see an early cycle low then my fear would be that we're looking at a much deeper price low so it would be more of a v type move but a situation where we get a drop that probably tests the prior all-time highs of 2017 and then possibly also um comes down to
[11:46] a deeper level where something like this fourteen thousand dollar level to me sticks out logically on the chart as a place that could be attacked or found to to find support in the end that's not a prediction on my behalf i'm really just outlining the kind of the extreme ends of what could happen and i do that because folks have an allocation i have an allocation that i'm prepared to hold
[12:16] into the bear market low and in preparation for the next bull market but if i'm not aware of the worst downside scenarios that could have could form i would then be susceptible to panicking and making a decision at the wrong time at the bottom of a major capitulating event just like march 2020 where i think a lot of people dumped their bitcoin and you know obviously regretted that and and probably found it very
[12:47] difficult to get back in until higher prices you don't want to be doing that near the end of a four-year cycle low so if you're carrying way too big of a position and you can't weather sort of three or four months or five months of declines that go much deeper than where we are right now then as i've suggested in the past you need to right size that position so you can sleep comfortably at night okay yes you may give up some upside at some
[13:17] point but if it avoids if it helps you decision that's made in a state of panic an emotional decision then you should do that you have to find a level of comfort in your position that gives you exposure to the upside but doesn't force you to make wrong decisions like sell those bottoms and then when the market recovers you get that fomo and you realize that you've sold a lot of your position and you're
[13:47] buying high again just from hearing from a lot of people and having discussions from a lot of people that has been the theme from this four year cycle whether it's the beginning move up to 14 000 where people were surprised early and bought that and then spent six eight nine months in a decline and sold and then it wasn't until got to all-time highs again that they decided that they would need to get back on board so basically buying high a lot and then panicking panicking on the declines we want to
[14:17] avoid as much as possible that mentality and that's why i always suggest take a smaller position in general one that can be taken and the one that you can ride for the majority of the cycle you don't have to be very early and you don't have to out at the very top but you just have to avoid being shaken out all the time and always buying at the wrong times whether that's on a decline uh with selling or
[14:47] on a massive pump and buying that top you want to get out of that mindset and that's what you want to avoid with any scenario that's coming up in the in the near future into this decline now my preferred view is that we don't get down to this 14 000 level my preferred view in fact is that we need to that we probably will hold some of the gains of this bull market versus the peak of the last bull market do we come back and test that 19 20 000 area very very possible i mean we hit 25
[15:18] recently that is only another 20 down from that level to test those highs nobody knows is the answer i mean you've got a lot of unchained folks that were saying can't go any lower um you've got a lot of analysts out there that you know bitcoin just my point is bitcoin just surprises with its vault because it has such a high volatility it's always going to surprise surprise and the upside surprise and the downside surprise and the short term surprise in the long term and that needs to be built
[15:48] into your thinking and your how you structure a position in this market but ideally because i know a lot of you want more of us you know something more of substance when it comes to what i think is possibly going to happen i think here we're going to come into this sort of november december time frame that's where i think we need to wait and because and i i think that because in general on the four year cycle time frame on the long cycle time frames
[16:18] things just take longer right it's relative to the length of the cycle so when we're talking about a four-month sorry a four-year cycle or 48-month cycle things happen in you know in four-month levels in intervals they happen over those periods and we only just recently like i said it really was only in april that i think the entire market finally all put their hands up and said yep it's a bear market so we've come to that realization point
[16:49] in the cycle okay it's it's just common knowledge now that this is a bear market but that's only a couple of months in and typically you need to go through that negative despair portion of a cycle for a decent amount of time and on a four-year cycle time frame a decent amount of time will typically mean four to six to eight months and this is why from april or even if you want to call it january where it really was clear that the cycle
[17:21] had topped when it lost that that four years uh that that 10-month moving average you want to give this sort of that eight-month period right from from that level and that gets you into the timing band for the next four year cycle low but again how it get what it does from a price perspective i could draw a number of squiggly lines here and any one of them could make sense so that's not the point of drawing different scenarios upon drawing
[17:51] different scenarios is to find a solution or find a plan or to develop a plan that you could use to position yourself in for the next bull market so part of that plan means understanding where we are in the cycle what the downside possibility is so you can either make a decision now to maybe reduce position or reduce on a major little short-term move for example but more importantly to realize that you don't want to be stuck
[18:23] in bear market thinking and in this very negative sentiment that gets caught up we're gonna see and we're seeing right now participants mostly on the retail side exit this market in droves and when the market begins to just grind lower and lower or even just sideways and sideways over the summer months that exodus will continue and eventually that will be the groundwork that will lay the
[18:53] groundwork you know the winter of a bear market will eventually allow for this market to then form its bottom and move higher and that may take the path of you know maybe over the next two or three months we can rally back up to 40 000 and meet the declining 10 month moving average then come back down but i think at some point in this timing ban this 25 000 level that was reached recently
[19:23] is going to be tested does it form a double bottom in this timing band it's possible that's certainly a possibility but then also if you're not prepared for a scenario that really does come down and test possibly this last bull market high in 2017 or go down a lot lower than that then you're not doing yourself you know the right service here
[19:54] in your preparation my focus right now is on the next four year cycle low and being as well positioned as possible in my portfolio to take advantage of what i believe will be a very significant four-year cycle to follow i've talked about this next four-year cycle as really being the the major blow-off component of of bitcoin sort of first 16 years the point where it reaches a
[20:26] market cap of real significance into at least the low trillions of dollars i of course i thought we'll get more of a move in this four year cycle but it really was this next four year cycle that for me was always a focus and the one i thought would come up in a left translated cycle manner meaning topping within the first year or two of that cycle into a blow-off peak and i still think that is very possible but that's in the future i want to be prepared and
[20:56] positioned as much as possible for that and what that means is not necessarily you know getting the absolute price low um but accumulating and being in a fully positioned um being fully positioned by or near the lows and then having the discipline to understand that it could be a process but then being prepared and having that position for the next run higher
[21:28] just like i was able to do in this last four year cycle with the first video coming out this level that first video was in early december and we still had a little bit lower in prices but it didn't really matter in the end because the timing was right okay we were in the range in the zone and price-wise i think it declined maybe 10 or 15 percent lower from where i had gotten in but that's in the rear vision mirror just a timing error more than anything else and even
[21:59] if you look at 25 000 if you're talking about it hitting 25 000 but then eventually dropping to 20 before the end that's a 20 move it looks significant but it's 20 it's not all that different to getting in at 3 800 and then seeing it hit down to 3 100 within a couple of weeks of the low it's going to be difficult to time those lows and if we get a capitulating market yes you can get a significant decline just over a week or two into those lows
[22:30] try and ignore that what you want to do is you want to be accumulating in this area and i'll have follow-up videos i think once we get closer to that but i can tell you now anything below this sort of 25 000 range i'm in uh i'm i would be very much interested in adding more to my position and certainly anything below 20 000 uh what's gonna happen is most people are gonna panic and sell what they have
[23:00] left i'm gonna be thinking i don't even care anymore i believe in bitcoin's future i know we're close to a four year cycle low i'm buying and i don't care if it drops to 15 or 14 in the short term anything below 20 i'm not thinking i'm buying so just so you know that is at least how i approach this i'm afforded that luxury to some extent because i got in early and i sold some
[23:30] and i sold some more okay it didn't sell anywhere near as much so looking back at that agenda one of the items i had in there was reflection so a lot of people say well bob you know you said it's going to you know 150-200 well that was my primary view amongst other scenarios and it just didn't happen you know what such as investing such as trading it doesn't always pan out the way you think but the right the position was right from the beginning at a very low level and
[24:01] even today with the remainder of my or the model portfolio it's still up around 9x that's not bad for a cycle that didn't really give us a whole lot that most people really fumbled and weren't able to really extract a lot of great great gains from sitting on a 9x return and having taken back all the initial capital and taking some profit i think given again the price
[24:31] action that we've seen of this cycle is a very good result and then i get this other question a lot from people well you know i got in at 50 000 or 40 or 60. so i didn't make any money you know it's okay for you to say that you got in early well you know what i'm sorry about that it's not exactly my fault essentially you bought a bull market too late yes there was a an expectation or a hope that would go to 150 and 200 so buying at 50 or 60 for you
[25:01] probably wasn't a horrible decision but in the end it was still if you look at this it was still some 24 26 months into a bull market so you're buying at anybody that bought at that forty fifty thousand sixty thousand level you're buying two full years into a bull market and probably you were buying because your neighbors were buying or somebody told you about that so put it down as simply
[25:32] your first experience put it down as your practice run for the next one right don't be disheartened by it you got in late you were made aware of it late for whatever reason and you paid some price for that just don't make the wrong decisions and panic sell at the bottom that should have been probably done at the 43 or 44 000 level and at least recovered most of that investment if your choice was to exit the space but
[26:03] right now anything below 30 000 in my opinion shouldn't be sold i think we're too deep into this four-year cycle too deep into the bear market and also from a price perspective too far down to sell again can we drop another 30 40 absolutely bitcoins volatility has told us that it's possible but um this late in in the bull market that's not something i would be focused on doing now again going back to
[26:33] reflection there's one thing i know i could have done differently and should have done differently and that was when we had this confirmation and we dropped down to 30 i think it was 32 when it came back up to 43 i sold something like 20 percent of the portfolio close to that i should have sold 70 of it or 60 of it why because uh again there was confirmation of the bull top and then we had price recover by around 25 percent back to the 10-month moving
[27:04] average that for me should have been an a pure exit and banked most of the profit and kept some allocation just in case right so you always want to have that some exposure so looking back that was my personal takeaway from this cycle and you know you learn from every cycle you learn from every experience none of them will be perfect and that has been my lesson learned from that last four year cycle overall still very happy with the
[27:34] outcome and um and on to the next as they say right we can only take and learn from those prior cycles and experience and the goal is with each iteration of a cycle whether it's a 60-day cycle again or or an a 10-month cycle or four-year cycle in any asset class or just in end trading in general investing in general those are iterations and the goal is to improve as much as possible and not repeat errors and this
[28:05] is what we want to prepare ourselves and we'll do it all again and hopefully we'll get a nice good low price to get in on and then we'll ride another cycle and then you'll be part of the club that got in early and then what will happen is we'll get up to a higher price at some point we don't know if it's 20 23 maybe it's 2024 we'll be patient but i feel confident that we'll see another all-time high again and it'll be a six-figure number okay
[28:35] and then what that's good what's going to happen there is it's going to be all over the media one more time or many times and the celebrities will be back in full force and it won't be laser eyes but it'll be something else like laser eyes and there'll be offshoots maybe it's nfts again and then there'll be other altcoins essentially the space will become speculative again and you'll be you'll be somebody at telling your neighbors or your neighbors would be looking at you and saying geez look at that he got in or she got in and
[29:05] i went in and they will be buying the equivalent of what maybe some of you were doing in january february and march of 2021 just like many of you who were in on this four year cycle low with me did back in 2017 right every cycle brings in the new and cleanses the old with those four year cycle declines and it's a rinse and repeat process from cycle to cycle to cycle so that's why i said before don't
[29:37] beat yourself up if you got in late in the cycle or if it didn't work out the way you had hoped or if you made mistakes like buying leverage or buying top selling bottoms buying top selling bottoms those are learning experiences slow it down reduce your position size get more disciplined and have that longer term view and in the end you will do well as a result so lastly what's my portfolio view well
[30:07] look like i said i won't sell anything below 30 000 at this point i will ride what i have and that's fine with me again i can i can maybe do that a little more comfortably because i have positions from the lows and and positions from the last bull market as well um but mostly because i just think we're just too far into this boom into this bear market right now and i don't want to sell at that point there is a case and it's decent that we can trend sideways and hold this level
[30:40] into the four-year cycle low and not see a price decline into those lows and then go up so i don't want to be completely out of my position at that point just because there is a possibility and a good one that we can move low at that point i prefer to just look at it from more of a buying opportunity as opposed to trying to sell here and pick up more at a slightly lower price it's not what i want to do however what i will still be willing to do is on a rally a rally is a counter trend
[31:11] move here so a rally back to 40 000 over the next month or two in the summer months if we see a rally right here i gotta i gotta assume again that it's just a counter trend bear market rally just a little pump before turning over one last time into the four-year cycle low so at forty thousand dollars i begin to think that is more than enough um of a recovery in
[31:43] price before the ultimate bear market four-year cycle low that i could unload some more of my bitcoin again i would keep a stable position that i can always pick up some more on um if if it for whatever reason just keeps on going but i would sell uh some of the position a good chunk of it at that 40 000 level otherwise again as i said i'm prepared to wait it out and look for the opportunities below looking at this child where am i wrong
[32:15] on the four-year cycle low because you always have to ask that no matter how much you believe in your own model and your own strategy there are times when for whatever reason whatever external catalyst or external force um can can completely throw a model apart okay nothing is foolproof well i'm looking at this here and i'm looking at these two candles from march and april the highs on those around 48 49 000. bitcoin has absolutely no business
[32:46] trading above 48 or 49 000 in this bear market absolutely none as far as i'm concerned um and if we get to that level i would really really think that something huge or something big is happening and that we're off for whatever reason and that this low this would be the low at that point in in may and that would be extremely early but again i would have to respect the price action above everything else because it just wouldn't
[33:17] fit a typical or any four year cycle but until that happens or if it ever does happen again a counter trend move a rally back to 40 to me gets me out of more of my position and then i would have even a bigger cash position to allocate back into the next four-year cycle low because i do think if we can rally back and it's possible right we're the sentiment even the short term here is pretty extreme and as you can see
[33:48] prices fairly extended below this 10 month moving average so just a snap back a quick four week snap back back to 40 042 even is not it wouldn't be a surprise to me at this point so that's my strategy otherwise i'm just got my eyes focused on the next low the possibility of a low and i would ignore the timing again as i said below 20 000. i start to get this really greedy at that point because
[34:19] there's blood in the street and i'm greedy i'm just buying otherwise i'm patient okay i've got all summer i'm gonna focus on other things i focus more on again what has transpired over the last four year cycle what i can do better next time but i'm also going to focus on myself a little bit or maybe other asset classes but summer months are coming here in in the northern hemisphere i'll go out and just have more barbecue and spend more time with my kids and out in the garden and do other things right because there's more to life than just focusing on price every
[34:50] morning and refreshing that price all the time and that's been one of the beauties of just having a long-term view getting in early and then just selling one small position at 28 and selling again should have been a more comfortable ride and again like i said a 9x to this point you want to just replicate that as much as possible and i certainly am attracted to replicating that in my positions and that's my view for the remainder of this four-year
[35:20] cycle i will look to focus and do another video in the next probably eight weeks or so six to eight weeks around the summer months and then we'll probably have a better picture i wouldn't be surprised if we have a good move up like i said to around 40 and then i think it would look to me fairly obvious like we would then be preparing for that final run into those cycle lows but again as always find the right position that you're comfortable with don't get greedy
[35:50] don't get sucked into fomo and don't let the fear take over thanks very much everybody i appreciate you all the best take care