GM, this is Milk Road PRO – the newsletter that’s channeling its inner Benjamin Franklin.
(“If you fail to plan, you are planning to fail!”).
2024 was a hell of a year for crypto.
It was the year that set us up for the “Golden Age of Crypto” as explained in last week's PRO report by M0xt.
While the golden age may be here, we still believe crypto prices will likely top within the next 12 months, after an exciting run to the upside.
Once we hit the top, we believe we are due for another large, decline in prices, though likely much less aggressive than previous cycles (at least for the majors).
In case you’re new here, historically crypto has moved in 4 year cycles. 3 years of “number go up” and 1 dreadful year of “number go down”.
This has happened like clockwork for crypto's entirety so far.
You can see this represented in the chart below with the green lines representing the highest price of Bitcoin in each cycle, and red representing the lowest price.
Ironically, the time between the top and bottom has been almost identical for the last 3 cycles.
The time between top to top has also been fairly similar, though we only have data points for 2 complete cycles thus far.
Regardless, if we take the average time between the top and bottom and top to top and move it forward for this cycle, we get an October 2025 top and a November 2026 bottom.
Will this cycle play out exactly like that? I have no idea.
Rarely do markets give you an opportunity as simple as that. We also strongly believe that these cycles will not last forever and we very well could be on our last one.
While I don’t know if October will mark the exact top of crypto this cycle, I do believe we will top out sometime in 2025 or early 2026 - regardless of the many bullish things occurring in the crypto space (ie. Trump elected, Crypto ETFs, Strategic Bitcoin Reserve, etc.).
In today’s report, I’m going to bring out my “crystal ball" 🔮 and discuss:
- 3 potential scenarios for how this cycle could play out in 2025
- When we can expect pullbacks in 2025
- And what my exact sell plan is this cycle
Of course, none of this is financial advice or for sure going to happen, it’s just my best guess based on historical patterns, market trends and other factors.
Use this information as a general guide to the next year, not as a perfect map.
The key here is not to get stuck on any particular outcome I share below, but instead to understand what’s possible and not get caught off guard by sudden pullbacks or market tops.
Knowledge is power and the purpose of this report is to put the power in your hands for 2025, likely one of the most important years ever for crypto investors!
Let’s start with my expectations in the short-term and then finish off with my probabilities of when the top will be for crypto markets and how/when I plan to take profits
Q1 2025: “NOTHING IS CERTAIN BUT DEATH AND TAXES”
I’ve mentioned a few times now in PRO content that I’m expecting a significant pullback in crypto markets in the near future, likely early January.
Part of that theory is based on global liquidity as shared here, but the other part is based on historical market performance.
Below is a chart of the Bitcoin price from the 2016-17 bull market. Interestingly, after a Trump victory in November 2016, we saw a run up into the end of December and then a steep pullback of 38% starting on January 4th.
I’ll get to the other dates on this chart in just a second, but before I do, let's jump to last cycle’s Bitcoin price from the 2020-21 bull market.
This time, Biden won the election and again crypto markets took off through November and December, with a big pullback of 32% starting January 7th - eerily close to what happened the cycle before it.
One thing that is important to understand about markets is that seasonality plays a big role.
Remember, markets are just a bunch of humans and institutions all buying and selling assets with their capital
Yes, bots and AI agents are executing a lot of the trades these days, but ultimately they are doing it on behalf of and at the discretion of a human.
So why do we commonly see pullbacks to start the year? Mainly it’s around booking profits for tax efficient reasons.
January Pullbacks
In both scenarios above, 2016 and 2020 were very good years for crypto investors, so naturally people want to take profits.
However, if investors sold on Dec 31st instead of January 1st for example, they would need to pay their taxes on their capital gains come March (in the USA), just a few months later.
Alternatively, if they wait 1 day and instead sell on January 1st, they don’t need to pay taxes until the following March. Essentially, they are “taking out a loan” from the government (ie. the taxes they owe) for an entire year, with the ability to continue investing it, before needing to pay it back.
Of course, it doesn’t always work like this, but especially in crypto where the gains are massive and it's dominated by individual investors rather than institutions, tax pullbacks tend to be exaggerated.
March Pullbacks
If you look at the charts above again, you’ll notice that we also had a significant pullback in 2017 on March 8th and again in 2021 on March 14th. What’s happening here?
This is generally people selling profits to physically pay their taxes in March. Again, this is specific to the USA, but they are a large part of the capital base in crypto and tech, so that’s why we need to pay attention to their buying / selling patterns.
This could be people who sold Jan 1 the year before, and now need to sell their “loan from the government” I just mentioned above or just in general, people taking profits to pay taxes.
Interestingly, even if there aren't actually a lot of people taking profits to pay taxes, it's a common narrative that this is what happens in March anyway, effectively meming this pullback into existence.
Of course pullbacks can happen anytime, this is not a perfect science (see 2021 Bitcoin chart above with 5 big pullbacks by May!). The take away from this is that pullbacks WILL happen. I don’t know exactly when, though it's possible it could be in January and/or March for the reasons mentioned above.
One pullback that does happen more often than not however, is in May…
Q2 2025: “SELL IN MAY AND GO AWAY”
Did you know that since the 1970s the 3 biggest indexes in the USA have made most of their gains between November to April. Check out their averages below versus May to October.
If we look at Bitcoin’s average monthly performance since 2010, its 4 worst performing months are June, July, August and September.
To help paint this picture a little better, here is Bitcoins price chart from 2020 to today. Circled in red is May to October for the last 5 years… ouch!
There is a common saying in investing which goes: “Sell in May and go away” - clearly it’s a winning strategy historically 😅
But why, what’s going on here? The theory is a bit ridiculous, but here it goes…
After May comes summer, a time when the extremely wealthy in New York head to the Hamptons and the extremely wealthy from London head to Spain, Italy and Greece for the summer.
The extremely wealthy are of course those who manage the most capital in the world, from bankers, to fund managers and more.
During the summer time, they tend to take time off to hang out at their million dollar beach front properties and soak in the sun, away from their office and screens.
As a result, their capital is put on hold, a lot less trades occur and liquidity tends to dry up in markets for the summer.
It’s almost like an agreed upon 4 months from the ever-so-powerful to pause the game in May and pick it back up in October.
Even in the most bullish markets, like 2017 when Bitcoin went from <$1,000 in January to $20,000 in December, we saw a pullback begin on May 25th. While price action did pick up in August, by mid-September we bottomed out at the same price we topped out at in May.
Of course, October is where things went absolutely nuts and Bitcoin did a 10x by the end of the year 🤯
The same thing happened last cycle in 2021, but that time it appears people tried to front-run it as the price started dipping on April 17.
Price rallied and then mid May it fell 50%, once again rallying mid-summer but really taking off come October.
Again, I’m not saying this is how the first half of 2025 will play out, I’m just sharing what’s happened in the past.
I will get to my probabilities of everything at the end, but first, what’s possible in the second half of 2025…
H2 2025: “HISTORY DOESN’T REPEAT, BUT IT OFTEN RHYMES”
In terms of historical patterns, I don’t have much to offer you in the second half of the year, other than Q4 tends to be a banger quarter for crypto…in the 3 “number go up” years of the cycle.
You could finish the “sell in May and go away” line with “until October” and you’d likely do really well.
Below are the last 5 Q4s for Bitcoin and they are wild every time, except the “down only year” (aka macro winter - read this report if you don’t yet understand the seasons of the business cycle)
The key thing to understand about Q4 in the final year of the 4 year cycle (which 2025 would be if it played out again) is that it tends to be when the top hits and price aggressively turns to the downside from there.
In 2013 the top was in November, 2017 in December and 2021 again in November.
So the big question is, what will happen in 2025? Will we have another 4 year cycle and if so, when will the top hit? And also, how do I plan to take profits this cycle?
Uh, Oh… 😧 The rest of this report is exclusive to Milk Road PRO members!
WHAT’S LEFT INSIDE? 👀
- Kyle outlines 3 potential scenarios for price action
- The probabilities of each scenario happening
- How Kyle will take profits this cycle
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