Veteran crypto analyst Bob Loukas says Bitcoin has entered the final phase of its current four-year cycle, but warned that the market may need another move lower before reaching a sustainable cycle bottom.
In his latest “4-Year Journey” update, published on June 4, Loukas described Bitcoin’s recent retest from its February lows as a largely expected development and not a break from historical cycle behavior. He argued that Bitcoin’s recovery in May, when the price approached the low $80,000 mark after falling to $60,000 in February, resembled a countermove within a broader bear market structure.
“A very rare cycle, and I mean less than 10%, probably more than 5%, will end very early and also at the first significant drop from the top,” Loukas said. “There’s always a new test. There’s generally always a lower low, at least one lower low, if not a second lower low.”
Loukas said Bitcoin peaked in October and later broke below the 10-month moving average, which he takes as confirmation that the previous cycle advance had ended. The subsequent drop in February, he said, was followed by a natural relief rally that attracted bulls on expectations that prices would quickly continue toward previous highs. That rally stalled around $83,000, close to the $85,000 area he had expected, before Bitcoin reversed and fell about 25% towards the February low.
Loukas starts accumulating Bitcoin again
Despite claiming that Bitcoin may not have reached its cycle low yet, Loukas said his model portfolio has made its first buying move in three and a half years. The portfolio added 10 BTC at the $65,000 level, bringing its allocation to approximately 58% Bitcoin and 41% cash. He emphasized that this move is not a signal that the bottom is already in place, but rather an attempt to start reaccumulating at more favorable long-term levels.
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The key level is now $53,000, according to Loukas. He said that if Bitcoin reaches that area, the model portfolio would use the remaining funds to return to a full Bitcoin allocation. The level matters because it roughly corresponds to the midpoint of the broader four-year cycle structure.
“What I currently think is the best strategy, and this is always subject to change, is that at the $53,000 level, any money left to buy the remaining Bitcoin and return to a 100% allocation,” Loukas said. “At the $53,000 level we mark the midpoint of the entire four-year cycle.”
He acknowledged that $53,000 seems serious, but argued that this is not extreme in Bitcoin terms. From current territory, he said, such a move would only be about 15% lower, while Bitcoin had already fallen about $20,000 in the previous two to three weeks. He also noted that previous bear markets produced much larger declines, including a 77% decline from peak to trough in the 2021-2022 cycle, compared to the current decline of about 51% to 52%.
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Loukas said a drop of 65% to 70% would not be a prediction but “should not be a surprise” given Bitcoin’s historical volatility. A move to $53,000 would represent a decline of about 57% from the cycle high, according to his estimate.
The last cycle window opens
Loukas took a more bullish scenario into account. He said the current retest creates the first credible possibility of a shorter cycle low in four years, potentially forming as a double bottom before a late summer base and a later rise above the May highs. He assigned that outcome a relatively low probability of about 25%.
His base case remains that Bitcoin’s cycle low should move closer to the traditional window around October or November, with December also possible. Loukas said Bitcoin is now in month 43 of the cycle, entering the broad zone where four-year lows typically appear around the 47- to 48-month average.
“The window was hit,” Loukas said. “The four-year cycle is now nearing or nearing its end. But as I said before, this is no different from previous cycles.”
For the short term, Loukas said Bitcoin is oversold enough to bounce, possibly towards the 10-week moving average around $73,000, before heading lower again. He also argued that Bitcoin should not trade above its May high near $83,000 to $85,000 in the coming months unless a new cycle has already begun.
At the time of writing, BTC was trading at $62,247.
Featured image created with DALL.E, chart from TradingView.com