Fear Is Your Friend

[00:01] hello followers of the four year journey i hope you're doing well this is bob lucas here on december the 15th 2021 essentially three years almost to the day on the anniversary of the last four year cycle ending and the beginning of this current four year cycle firstly i want to apologize really feeling under the weather this week not feeling up to a long detailed video and also i'm looking to take my annual break here at the end of the year and go
[00:32] offline for a couple of weeks so i thought better to get something out than nothing it's been a couple of months since the last video so this would be a pretty short video in general and i'm not going to get into too much depth to be perfectly honest nothing nothing substantial has changed in my outlook overall there are some areas where there's possibilities of concern but as an active hodler as somebody who's looking to capitalize over a very long time period
[01:02] most of that really falls under the category of noise and you know playing to to somebody's fears and reading into charts where maybe they're just you know impatient or concerned with where they stand currently with their positions so let's go into a couple of some ideas here that i have regarding this current four-year cycle of course beginning with just where we stand in the in the cycle so from a monthly let's go to a monthly
[01:33] from a monthly perspective here we are three years ago december of 2018 we finally bottomed out after a one year decline almost to the peak uh five years ago sorry four years ago the peak in december of 17 and three years ago the bottom so it was a perfect one year bear market that really set the scene for this current four-year cycle the next four-year cycle low is due here at the end of 2022 so basically a year
[02:06] from from now give or take a couple of months on either end of that cycles that's an average of course they can go by a good 10 on either side of an expected cycle low this is the only point in my analysis that really matters the most and i think people always get hung up on where the top is going to be and where it falls and if it doesn't fall exactly or near where somebody may expect it or where i expected maybe two or three years ago they begin to lose confidence in general
[02:38] with their overall positioning and their overall thesis that's hop in a cycle can occur almost anywhere and it depends mostly on the longer term trend so when you have a longer-term uptrend like we have here for bitcoin over the 10 years a secular bull market uptrend typically you'll find the top will occur much much closer to the next low and that allows for a lot of time in a rising portion so in a powerful secular bull market uptrend the top in the four-year cycle is going
[03:10] likely occur around three three years in maybe even deeper into the four-year cycle and when i began this series again three years ago the first video i believe was recorded on december the 8th 2018. i essentially said around the three-year mark around exactly where we are today that's that's typically or where we should at least expect the area for the top in the bull market and it hasn't come as of yet it looks as if that top in this bull market
[03:41] is now pushed into 2022 and looking like q1 is probably not even enough time maybe it's q2 and that's perfectly fine from a cycle perspective it's it's really the low again that's going to matter but what it does do is the longer or the deeper we push into the cycle then the shorter in theory the duration of the next real bear market will be although you know that's also somewhat insignificant we've had already a number
[04:11] of 50 or 45 or more retracements within this rising portion of the four-year cycle the volatility is just there in bitcoin and i feel generally based on comments and and what i read out there that most people still haven't fully embraced the volatility profile that we see in bitcoin and we have seen really since inception when you have an asset class that has you know the ability to to
[04:41] triple and quadruple in just you know a few months time as you can see in 2017 back in 13 even to start this four year cycle and of course a year ago with that run from 10 000 to 60 000 anything that has um the ability or the profile of being able to make a move like that also comes with uh to the downside tremendous amount of downside risk and possibility at any given time and you know again if you can't embrace
[05:13] that in your positioning and that if that's why i always say your position size matters in an asset class with this type of volatility if you can't hold your position through the swings and through that volatility then you're not going to be able to get to the end of the cycle and realize those gains and i mentioned that almost in every single video since the inception and i've always talked about the prize in this cycle being in this sort of quadrant up in this area around this
[05:44] time period uh granted and much higher than where we are today and that leads to the next sort of natural question are we going to get there um because when i asked on twitter i think it was on monday or earlier late last week do you have any questions for the next video what's the type of question you'd like me to address and it really was interesting that the vast majority of the questions that were
[06:14] asked were essentially have we topped was it a double topped this is a bear market a lot of them were just pure statements that this was a bear market how low can it go all of the very negative elements and very all the very negative questions and almost very very few questions on how high can we go how far are we going to go on the upside so sentiment is very important in cycles and i've noticed a tremendous shift in sentiment
[06:46] almost really not as bearish but but really just as bearish as it was in march 2020 when it recovered and certainly uh getting close to the sentiment levels that we had seen in the the bull market period the bear market period of 2018. so from a contrarian sort of standpoint i like that that sort of music to my ears i i you know bull markets end obviously with a lot of euphoria and you know sentiment is wild
[07:18] to the bullish to the bulls side and we have nothing like that and one can make the argument that we had something close to that in this december november through to sort of march run back earlier in the year but at the same time i don't feel that it was a type of sentiment the type of retail participation that i would expect to see from an asset class that's maturing like it is certainly wasn't anything like the 2017 move in terms of sentiment
[07:50] in terms of retail new retail participation very little of that occurring right here in fact yes we had some retail participation new retail participation at the end of this move the last couple of months i had some acquaintances or friends of friends who sort of got involved at this point but again nothing close to the type of extent that you had seen in the past and i think more importantly nothing that comes close to the type of mania that i
[08:22] think we want to see or expect to see in a bull market with a market cap much higher with which much broader participation so that is one of the main drivers for me thinking that we did we didn't see a top in this four year cycle that we still have further action to go and also not that i'm a big on-chain analyst but i do look at some of that data and some of that data is really healthy from an accumulation and a huddle standpoint from what the miners are doing in general
[08:53] it just feels to me as if we're just building yet another base right here that will support the final run to the four year cycle peak if i look at it from a weekly chart sort of break down a little further it looks a little similar in structure at least to kind of what we had here in um you know in in 2019 before the eventual run up to this peak it's almost as if we you know and i i have i did talk about this being a foundation
[09:23] back here when it was developing and that was the catalyst or at least the springboard to allow it to make that big run up and this four year cycle seems to have a lot of that characteristic if you remember or recall back when the bear market ended very few people were expecting this to continue bitcoin was dead at that point and then bitcoin within space of six to ten weeks went on went on a forex run that very few people were able to
[09:53] capitalize on and to take advantage of and it wasn't until it broke above this 10 000 level and spent just a couple of weeks going to 14 000. did everybody who was in the past bull market involved finally sort of wake up and say geez this really is back on you know this is this is over the bear mark is done we're back in and of course just like markets like to do they like to punish the the undisciplined investor or trader who comes late to any move and who follows essentially the herd and you
[10:25] know that led to a pretty savage nine-month decline that also culminated after trapping people in with this move right here with one of the most historic collapses in bitcoin's history and that set and sowed the seeds for building this foundation of course again i said this was not the four year cycle top already this was a place to get back in and eventually we made that run up and i think again this four year cycle has
[10:56] really just shown us two major runs and the rest of the time it's been a lot of shakeouts a lot of you know sort of back and forth grinding action that's been frustrating for a lot of people the only people that i think have done extremely well out of this cycle of course there are always very there are always many individual cases but the people that have done best are people who are following sort of strategies like this where you're looking at a much wider much longer time frame
[11:27] and you're believing in the underlying philosophy and the underlying technology and you're in with a reasonable position and you're not allowing the you know 50 60 declines the shakeouts the collapses to shake you out of that position because you have a longer term strategy in mind a longer term target in mind based on time and also price and that's allowing you to stay in position but now we stand three years into the
[11:57] cycle and i feel that that position that belief is wavering and and people are really questioning that narrative and that's because for the most part if you follow that strategy you're sitting on a really sizable profitable gain at least on paper if you look at your bitcoin stack from a usd or fiat perspective of course the folks and there are some who are listening view their portfolio as one bitcoin
[12:29] equals one bitcoin and it doesn't really matter and those and for for them you know that's fine they are true hodlers in that sense and it doesn't matter and they're in for the very very long term regardless of any four year cycle decline let alone these intermediate declines but for the active hot load for those who sort of want to get in on a longer time frame at a low price and at least capture some of those gains and maybe buy a nice piece of property or or shore up their you know their financial future
[12:59] it's important to them and i think that's playing on a lot of people's minds right now where they look at this market and they look at the paper gain that they have and they're worried that they're going to get caught in a massive bear market 85 90 decline again and you know i will say that i do believe that we are eventually in the next bear market going to see 80 declines again i don't think that's personally going away given bitcoin's volatility and its
[13:29] profile and its history i don't buy any narrative that institutions would never allow that because we've already seen 50 declines and so on in short periods of time and even of course the march collapse so i don't buy that narrative so yes i do believe we will see large multi-month bear market declines of 80 or more but i don't think we're going to see that now um and and that's why people are very worried that they may have seen the top right here
[13:59] and they begin to read a lot into the charts now yes until we get back above the highs and break this sort of double top structure okay anything is possible and i'm the first to admit and the reason why i'd sold a small piece of my allocation at 28 i just wanted to gain to bank some of those gains and allow me to be in a position right now where i can be a little more patient and and and not freak out over the slightest kind of kind of action that doesn't go perfectly
[14:30] to plan plans are there as a guide and one that you need to believe in but also be flexible to adjust when that that plan doesn't go too um you know accordingly to to to to the analysis however right here i still don't see anything that ultimately scares me i know a lot of i mean if you recall with this decline here just three or four months back maybe a couple of videos back the calls for a bear market were loud and deafening and it
[15:00] didn't happen and so many people sold right in the bottom right here and even when it sort of surged right here the the the talk that this was just an impulse move and all the bear market comparisons to 2018 and and other bear markets were all over social media and then it really quietened down when it got back up to the highs but conveniently like like all markets like to do and confuse we've now got the sort of double top
[15:30] structure that bears are latching onto and that's the narrative and that's either full-on sort of perma-bears or just folks in general who want to believe in a bullish case but are just so concerned with losing what they have that they latch on to you know this this bearish narrative from a cycle standpoint when i look at these 60 day cycles i still see in the short term a rising structure the last two cycles the lows have formed above the prior low
[16:00] and the high above the prior high so at least in the intermediate time frame right here we're in a rising structure and more recently just four or five weeks ago even though yes it looks like a double top we still had an all-time high even on a closing basis on a closing basis we even exceeded the wick from back here in april so i don't see a reason for panic the only thing that sort of concerns is the fact that we didn't see a blow off top sooner
[16:31] but again every cycle is different whether it's on a 60-day cycle or a one-year cycle or a four-year cycle every cycle is different and when you sew fixated on like the prior cycle for example that did something like when it broke all-time highs went on a straight run to the top when you're fixated on the market having to perform in a very similar way then when it doesn't you begin to assume the worst in general and i think a lot of people are doing that right now
[17:02] so for me just to keep this really as tight and as short as possible from an analysis standpoint until we get below the september lows which is around the 40 000 level do i not i don't get worried okay if we get below that level and i mean close at that level um if we close below the 40 000 level i begin to get worried and i begin to hedge my position so you know i'll give you an example i don't want to give any advice here but if i had a retirement account that is not is not um that's tax
[17:34] advantaged or does not have any tax or reporting issues i may sell my spot right there and buy it back if we recover that area okay so more flexibility in that and in something like a leveraged account or a trading account or even a smart account that is subject to certain tax considerations there are other options to hedge that position whereas it could be a short position in a in a futures market as an example my point being here is that below 40 000 i begin to get a little concerned i get
[18:06] and i'm concerned that we have some type of double top structure that that was the mania peak call up call them if it can qualify as a mania peak but it was the it was the peak of the cycle and this was just sort of a re-test of that level before rolling over and then i would have to be prepared for a one-year bear market to follow that point and that bear market may not necessarily be a massive move lower it could be a significant sort of punishing sideways move i mean
[18:36] we had something similar to this where we were peaked in june and you know we didn't really recover and didn't really break out again and make a new high for well over a year and in the middle of that there was a bear market decline or a significant decline to a bottom the path forward there are multiple paths forwards in that case but again while this structure holds up and it's certainly while this 30 000 level i think that's a very very important level coming off this 50 decline
[19:07] if that level there at the 30 000 level was to be lost then i would certainly be out of all my positions i mean i'll keep always some small position that sort of transcends the four-year cycles in general but i would think below the 30 000 level from a closing standpoint let's just call it on the weekly then the serious trouble for the for this market and the price action would then tell me that we're on our way lower and then the downside targets because this was a
[19:38] question so many people asked i'm gonna throw it out there the downside targets really open up to almost anything you can imagine and call me crazy but the downside targets really go down as far as like i said from a peak to trough perspective going down 85 you know is a possibility going down to the 10 000 level would mirror the types of declines we've seen in prior four year cycles now we only saw
[20:10] was a three to four x extension from the prior highs in 2017. so an argument could be made in the bear market that if we topped in this area that because we didn't see the type of extension to the bull side or the peak that the bay extension down may not be as bad but certainly looking down to this 19 or peak back into in 2017 would be a target again careful with the words i use if we were
[20:40] topping for whatever reason in this area not my belief not my belief for a second to be perfectly honest if the if the price action tells me otherwise then i'll be quick to do that and you know hedging and selling at the forty thousand level and then ultimately out the thirty thousand dollar level is it the end of the world it's not for me at least i don't think it is for anybody who's been actively following the process and essentially taking almost a 10x gain in the spot in
[21:11] any investment is phenomenal especially especially if that were to be the case considering that we'd only got a three or four x extension when everybody's been expecting expecting a 10x extension to 200 000 and above and especially considering the vast and the significant volatility that we saw throughout this four-year cycle to be able to walk out in a worst-case scenario with a 10x gain over that period given all of that i think is a good result now that's putting aside now
[21:41] all the bearish talk all the negative talks let's get a little more positive so from a four year cycle standpoint using 60 day cycles here as a guide i think we're probably now looking at a sideways chop into the next 60 day cycle low into the february time frame and what i'm looking for is sort of to build this right side here a little bit more and just really be range bound from let's call it sort of maybe down as 40 to the lowest 40 000 to
[22:11] 60 000 for one more cycle before testing those all-time highs again and breaking out now if that were to happen and follow that path what i do believe you'll see with the eventual break of that level is you'll see that final shot up and it would be quick and fast and possibly just two 60-day cycles and no more than that so over a 120-day four-month period we've seen that before with the type of move that we saw back here in march of 2019 and of
[22:44] course we saw that with october move these were sort of three to five month moves and i certainly believe given the four year cycle timing the fact that the next four year cycle low issue one year away i do believe that eventually when we do break to the upside it's going to be a fast move and most people will miss it again and also start to get in at a price around 670 80 and 90 000 and leave themselves very little room to a top
[23:15] and that's because if we do get that run all the super cycle narratives and all the upholding areas will come back in force sucking all of the participation in to the top to provide liquidity for that market to the to to the to the top and their eventual reversal down to me again looking at the monthly we're sitting at the 10-month moving average right now you know the 10-month moving average for a trend is important to me i like to see any bull market uptrend respect that 10-day 10 10 month or a 10
[23:47] ema in this case the 10-month moving average we're right at that point slightly below that level right now so here's what i'm saying we need to build this base and hold this kind of level right here and that's why losing those lows from back in june really tells me that the trend is done at that point it's too late in the cycle you can get away with it early in the cycle like we did here in march it's certainly because we did stretch too far to to one side and then the pendulum swung back the other way this time we're three years into the
[24:17] four-year cycle and we should be getting into that really speculative blow-off phase of the cycle i don't see a market that can support on the monthly getting below that 30 000 level and then reversing it coming up to a high just not enough time as far as i'm concerned for that to play out so this is why i'm saying here we need to hold this level we can make a move down to 40. we can even possibly even wick down to 30 in a sharp fashion and end up with a wick similar to the marsh 2020 wick in the
[24:49] end though by february i'm looking for this move to come back up to test those highs and then as i said two cycles maybe no more than two cycles i would think into the summer months now looking for that peak then a bear market decline and then let me introduce i cannot introduce i've talked about this before i think we can then follow that up with a relatively quick so relative literally the quick bear market decline into the four-year cycle low sharper in nature than anything else
[25:20] that follows a v-shaped recovery to make one final run to the peak of the next cycle and this would be the next four year cycle peaking early so this is not an any any anything like the idea of an extended cycle um the four-year cycle lows would still remain consistent it's the peak in the cycle that i introduced this video with that can come at any point in the cycle and what i believe is from a longer term standpoint we're going to begin to see a more of a rounding pattern as we begin
[25:51] to reach those higher market cap levels and start to reach a general maturity level for an asset class i believe then this blow-off move sets the scene for an not so much an uglier bear market but more of a bear market similar to the nasdaq of 2000 and to 2003 period where after a massive blow-off we had a really long consolidating period and i think this is what this market is setting up for now of course
[26:22] there's no point in talking about the next four year cycle when we're still trying to figure out this four-year cycle and work out whether or not we still have that blow-off move for this four-year cycle so let's just put that aside and it doesn't really change or shouldn't that change your behaviors in terms of allocations at all so for this four year cycle just moving back to that i still believe again just to really summarize this video and close it out that we are heading up to this move right here that getting below 30 is an
[26:52] ultimate get out position or get out of the signal getting below 40 is probably a appear an area where you would want to sort of hedge i can't describe what that looks like you know how that's executed from your behalf that's something you would have to to do or whether you should even bother or care at this point i think ultimately that thirty thousand dollar level is the most important level and losing that level is lights out for this bull market four year cycle run otherwise i just i just would say lean back on some of the other videos and
[27:22] focus on your mental state and your psychology if you can't hold this big profitable position and this is spooking you out i've said this before release some of it take some gains bitcoins at forty seven thousand dollars don't look at it and say well it was at sixty four thousand not long ago i'm giving up so much gains look at it like well i got in that four five eight fourteen whatever the number is and it's now at 45. that's great so i'd only recommend that for folks who
[27:54] it's just struggling in general with her position size who are waking up daily and nightly looking at price and really freaking out about whether or not this market has topped if you're in that position you're probably just way too vested you've got too much in the line you're risking too much so don't let the market force you out of position at that point especially if we're going to move down to say you know 35 000 and not invalidate this monthly chart if you're gonna you know puke that position because you get scared inten for another ten thousand dollar drop then just start
[28:25] to take a little bit of profits not the end of the world if they can if you can support the market if it can support you running up in the next four years cycling keep your position then that's ultimately what you should be doing so i'm hoping this has helped again you know i've done 13 15 videos over this four year cycle the the message is the same it's repetitive it really is more about how you approach the market and the discipline that you put into this that is ultimately going to be the
[28:56] determining factor in your success looking at charts all day if you look at a chart long enough and you have some preconceived bias coming into it then you're going to find what you want to see and what your bias is telling you you should be seeing as opposed to just respecting the trend respecting the cycle at the moment we sit at the 10-month moving average that's rising respect that for now and again adapt when that changes and the facts change and they haven't changed just as as of
[29:27] yet markets aren't supposed to be easy trading or or holding bitcoin essentially has never been easy so respect that and know that that's the case and i think you'll do well in the end ultimately whatever the result from this four year cycle you should do well and you should be in a position to do well regardless the question is just how well in the end thank you very much i'll have another video out in about two months all the best