- Bitcoin is at Phase 5, which is characterized by general fear, similar to the last phase of the 2017 cycle, prior to a significant market explosion.
- Historical fractal patterns indicate that Phase 5 is frequently a launch point, which gives serious investors an opportunity to plank positions before they take off.
- Emotional market waves repeat across cycles, with capitulation and despair creating liquidity that supports the foundation for Bitcoin’s next parabolic rally.
Bitcoin may be approaching the final stage of its current cycle, showing patterns similar to the 2017–2018 crash. Analysts observe that the market is undergoing widespread fear while setting the foundation for the next potential rally.
Phase 5 Signals Market Reset
The latest Bitcoin movements reflect Phase 5, often described as “max pain.” This stage occurs after a blow-off top, denial bounce, lower-high consolidation, and breakdown. In 2017, Bitcoin peaked near $20,000 before collapsing to about $3,000, while the 2024–2025 cycle saw a peak near $75,000 with a projected bottom between $100,000 and $120,000.
Phase 5 is marked by heightened fear and emotional selling, yet it can serve as a hidden launchpad. Merlijn The Trader highlighted on Twitter that this stage is not capitulation but an opportunity to brace, survive, and accumulate positions strategically.
The stage emphasizes the psychological waves driving market behavior. Euphoria gives way to denial, fear, and despair, with investors often exiting positions. Historical patterns suggest this environment can create liquidity and accumulation points for disciplined participants.
Careful observation of market structure is key. Bitcoin appears to follow a fractal rhythm across cycles, repeating previous behaviors. Phase 5 may signal a temporary bottom before conditions align for a renewed parabolic rally.
Preparing for the Next Rally
In the last phase, long-term holders tend to keep buying while short-term traders cut their exposure. The sentiment may be weak, but this can create a favorable environment to position yourself.
The emotional curve provides insight into market psychology. Widespread fear and capitulation reduce participation, allowing those prepared to enter positions quietly. The 2017–2018 cycle demonstrated that patient accumulation during the final stage preceded a major price surge.
Bitcoin’s behavior across halving cycles reinforces this pattern. Each cycle shows the same sequence of phases and emotional waves, suggesting that current movements could represent the end of the reset before a significant upward move.
Merlijn The trader’s observation underlines that Phase 5 may mask the launch of the next bull market. Traders and investors who recognize the pattern may use the period to secure positions, potentially benefiting from the eventual parabolic rise.
