Questions are already coming up about whether Bitcoin is still in the expansion phase what most market participants think Corner. However, the crypto expert chose a conservative position, arguing that when Bitcoin is analyzed with traditional cycle theory and macroeconomic indicators, it is the main cycle. it may be complete.
This crypto expert, Tony Severino, challenged popular claims from “snake oil sellers” and instead pointed to economic data and historical patterns that show that the Bitcoin cycle has already shifted to a different phase.
PMI and ISM Data Show Where Bitcoin Is
According to Tony Severino, Bitcoin’s the bullish cycle is already over, and commentators saying otherwise are pushing that myth it may or may not happen. Severino’s opinion is based on the US ISM Purchasing Managers’ Index, which he considers a largely reliable gauge of cyclical behavior.
Related Reading
The PMI data shown in the chart below highlights a clear pattern of lower highs and lows, which is a sign of a weakening manufacturing environment. According to Severino, actual cycles are measured from trough to trough, not from hypothetical projections of future highs. From that perspective, the current PMI structure means that the cycle is already peaking and now it’s rolling.
At the time of writing, this index is sitting at around 47.9. Severino warned against that a further movement below the 46 level will change the PMI from a local pullback to a more prominent intermediate downtrend. A drop below 41.6 would have serious consequences, as that level would fall below the COVID period low.
Such a move would leave only extreme historical comparisons, including conditions last seen during the Great Financial Crisis of 2007-2009 or the deflationary period of the 1970s and early 1980s. Therefore, this macro background directly challenges the idea that Bitcoin is close to a new confirmed bullish phase.
Severino also took direct aim at popular Bitcoin valuation models that compare BTC to gold or rely on long-term assumptions that are divorced from economic reality. The current reality is that Bitcoin leaving behind gold and silver, which attract a constant influx unlike Bitcoin’s show of fatigue around $80,000.
Bullish Confidence to Bearish Target
Severino’s current situation is notable because it is a stark contrast to the way he viewed things before the start of the current cycle, when he was very excited about Bitcoin. His latest analysis, shown in the chart below, shows Bitcoin breaking below the moving average in the monthly candlestick period. This is remarkable because the same separation between previous years were followed by a reduction of approximately 50%.
Related Reading
The chart highlights several instances where Bitcoin has dropped 40% to over 60% after losing this type of technical support. Based on that historical behavior, Severino has floated a lower target of at least $45,000 before another bullish pullback.
Featured image from Getty Images, chart from Tradingview.com
