In recent times, the traditional belief in the crypto market’s cyclical nature has come under scrutiny by well-known analyst Jordan Fish, also known as Cobie. He has put forth an argument challenging the conventional wisdom, suggesting that the market dynamics have evolved beyond the typical four-year cycle of accumulation, uptrend, distribution, and downtrend.
Cobie sparked a lively discussion on X (formerly Twitter) with his bold statement, “Unironically [the bull run] has not even started yet.” Some were taken aback by this assertion, with Maher Abdelsala jokingly commenting, “Brother people think you are serious lol.” Cobie stood by his stance, emphasizing, “I am serious! Increasingly I like the argument that this is not even a ‘cycle’, really, but it’s more like 2019 with leverage and ETFs.”
The Evolution of the Crypto Market
Cobie’s perspective centers around the idea that the fundamental structure of the crypto market has undergone significant changes. He draws parallels to the market conditions of 2019 but highlights the influence of leverage and the introduction of spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs). He questions, “Was 2019 a new ‘cycle’ or was it part of the bear market?” Cobie reflects on the feedback he received in March, stating, “Floated this idea to a few people in March but everyone told me I was an idiot, which I am, but still it was quite rude to say that to my face.”
The Impact of ETFs and Leverage
The introduction of ETFs and the increased use of leverage have added complexity to the market, altering how capital flows in and out of the crypto ecosystem. Cobie notes, “Of course if we’re in 2019-looking-2024, it doesn’t mean 2020 plays out the same way, because structurally so much is different now with ETFs and high FDVs and shit, probably too difficult to pattern match too much stuff about the future.”
Cobie’s analysis suggests a high level of dispersion in the current market, where assets exhibit varying behaviors instead of moving in unison as seen in previous cycles. This dispersion makes it challenging to identify a single driving force or pattern governing the entire market. Cobie remarks, “I think this cycle is so unlike any other cycle it’s probably better to just stop thinking of cycles altogether. It’s clear there is no one single thread pulling everything forward like it did before.”
Exploring the Echo Bubble Phenomenon
Discussing market maturity, Cobie references the concept of the “echo bubble,” popularized by trader GCR. The echo bubble theory suggests that a smaller bubble follows the burst of a larger one, as observed in 2019 post the massive rally in 2017. Cobie expresses surprise at GCR’s recent market behavior, observing, “I actually found it pretty weird GCR kept talking about the echo bubble when he was bullish at the picobottom but then when shit started getting silly he just bought the dogwithhat NFT and broke his hiatus to come and tell people not to sell.”
Overall, Cobie believes that Bitcoin is currently in a “multi-month/quarter cool-off reaccumulation period,” expecting it to trade within a range of $45,000 to $70,000. However, he holds a pessimistic view on many altcoins, particularly those that have weathered multiple market cycles. He predicts a gradual decline for these older altcoins, rendering them irrelevant as speculative investments. Cobie concludes, “So long story short I think we need a lot more time before the (real) risk-on paradigm starts again and I expect more downside to come before it happens.”
At the time of writing, Bitcoin is trading at $51,104.
Featured image from iStock, chart from TradingView.com
text in a different way:
Please rephrase the text.