DN21 | Constructive Interference

Two cycles pulling against each other, and the setup that forms when they finally reinforce.

Welcome to another edition of the Decode Newsletter.

Last issue was deliberately narrow, a Bitcoin-only technical review that came down to two levels, 66.7k to get us moving and 74k to call the low, and we are still waiting on both. In fact more recently Bitcoin has been trending lower in the short term, and is once again below the 200 week sma. Rather than run these charts again, I want to widen the lens and look at a range of other ideas, because there is actually quite a lot going on despite a price chart that has barely moved.

Where the technicals are concerned, the obvious story of the last few weeks is the ongoing comparison to the 2022 fractal and how that continues to play out. We don't use price chart fractals a great deal in our analysis, it is not really a major part of how we look at markets, but there is no denying the similarity. So, I want to take that fractal seriously, and then take it a little further than most, because the same comparison supports a rather less comfortable outcome as well.

Quiet markets are also the best time to build, and I have been doing a lot of coding these past few months. There is a new version of the Global Liquidity Index published just recently, some improvements are coming to our proprietary Macro Trend Oscillator, and in the second half of this issue I want to properly build out an idea I first floated back in DN10, Bitcoin Cycle Dissonance.

That started life as a rough observation that Bitcoin’s 4-year cycle and the business cycle had drifted apart. When these two forces are moving together, Bitcoin and especially the crypto market tend to outperform. Once just an idea, today this is a working model, and what it shows about the last three years, and about what happens when these two rhythms finally line back up, is the part of this issue I am most keen to share.