Research

Crypto Market Cycle

While Veridian trades 50+ crypto assets simultaneously, the majority of altcoins move in tandem with Bitcoin. Understanding where BTC sits in its macro cycle is essential context for the entire crypto market.

Below, we visualize three independent quantitative models — each measuring a different dimension of Bitcoin's structural cycle. Together, they answer three questions: Where are we in the cycle?, How expensive is Bitcoin right now?, and Which direction is momentum pointing?

A note on attribution: The research below builds on work by Giovanni Santostasi, Harold Christopher Burger, Perrenod, and Didier Sornette. We don't claim this as original research — our contribution is making it accessible, interactive, and updated daily.
Cycle Timing
Where are we in the cycle?
A structural model that maps Bitcoin's position in its macro boom-bust cycle. Not a crystal ball — a compass showing where the structural rhythm says we are.

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What this model shows: Bitcoin's price follows a power law with its age — this alone explains about 97% of log-price variance since 2009. But the deviations from this trend aren't random. They oscillate in a surprisingly regular pattern.

The key insight: The dominant cycle has a period of log₂(2) ≈ 0.301, which means BTC tends to peak roughly when its age doubles. Not every 4 years (as the halving narrative suggests) — every time its age doubles, which gets longer over time. The first peak was ~2 years after genesis, the next ~4, the next ~8, and so on.

The oscillator (bottom chart): Shows where we are in the cycle. When it's rising from below zero, we're in accumulation — historically the best time to build positions. When it peaks above zero, we're in distribution territory. The model doesn't predict exact prices — it identifies structural timing.

How to read the projection: The dashed lines extend the model forward to ~2036. These show the structural rhythm, not price targets. The yellow composite line is the model's central estimate; the teal band shows the typical range of deviation.

Key Takeaways

Cycles are linked to age-doubling, not fixed 4-year halvings
The composite model explains ~98% of log-price variance
Projections show structural timing, not price targets
Accumulation phases (oscillator rising from below zero) have historically offered the best risk-adjusted entries
Current Reading
Phase
Oscillator
30d Trend
Next Proj. Peak
Next Proj. Trough
Based on log-periodic power law theory by Didier Sornette. BTC application and oscillator framework adapted from Perrenod's cycle analysis. Power law regression by Giovanni Santostasi.
Valuation
How expensive is Bitcoin right now?
A valuation thermometer that measures how far Bitcoin has stretched above or below its structural fair value. Think of it as a heat gauge for the cycle.

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What this model shows: Bitcoin's fair value grows along a power law — a mathematical relationship between price and age. This model measures how far the current price has deviated from that fair value, expressed as a 0–100% risk scale.

The green zone (below 20%): Historically the best accumulation territory. Bitcoin has only spent brief periods here — typically near cycle bottoms after major crashes. Every time it has entered this zone, it has eventually recovered to fair value and beyond.

The red zone (above 85%): Historically where major cycle tops occur. This doesn't mean price drops immediately — blow-off tops can extend for weeks — but the risk-reward becomes increasingly unfavorable.

The floor line: Based on the deepest deviation ever recorded (post-2011). Bitcoin has never closed below this level on a daily basis. It represents the structural minimum the power law model implies.

Key Takeaways

Below 20% risk = accumulation zone (historically best long-term entries)
Above 85% risk = distribution zone (historically where corrections begin)
The structural floor has never been breached on a daily close (post-2011)
This is a position-in-cycle indicator, not a timing signal — zones can persist for months
Current Reading
Risk Level
Zone
Fair Value
Distance from Trend
Structural Floor
Cycle Ceiling
Power law framework by Giovanni Santostasi. Risk oscillator methodology adapted from Harold Christopher Burger and the Bitcoin Power Law community.
Momentum
Which direction is the energy pointing?
A risk-adjusted momentum gauge. Unlike position-based models above, this measures the "energy" behind price movement — how strong the push is relative to the pain.

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What this model shows: The Sortino ratio measures returns relative to downside risk only. Unlike the more common Sharpe ratio, it doesn't penalize upside volatility — only the painful kind. This makes it a better fit for an asymmetric asset like Bitcoin.

How to read it: The bar chart shows a rolling 365-day Sortino. Green bars mean Bitcoin's returns over the past year have been strong relative to downside risk. Red bars mean the opposite — more pain than gain.

Above 2.0 = strong momentum. Historically, sustained Sortino readings above 2.0 have coincided with the strongest phases of bull markets. This doesn't guarantee continuation, but it confirms the trend has "energy" behind it.

Below -1.0 = deep weakness. Extended periods of negative Sortino have historically marked the worst of bear markets — but also the setups for the next major rally. By the time Sortino turns positive from deeply negative territory, the recovery is often well underway.

Key Takeaways

Sortino above 2.0 = strong risk-adjusted momentum
Sortino below -1.0 = deep weakness (but historically near bottoms)
Measures "energy" not "position" — different signal dimension than valuation models
Best used alongside the two models above for a multi-dimensional cycle view
Current Reading
Sortino (365d)
Momentum Grade
Sortino ratio developed by Frank A. Sortino and Robert van der Meer (1991). Application to BTC macro cycle analysis by Veridian Research.

Disclaimer: This page presents visualizations of publicly available quantitative research. It does not constitute financial advice, investment advice, or a recommendation to buy or sell any asset. Past performance of any model is not indicative of future results. All models have limitations and should not be used as the sole basis for trading decisions. Full Terms & Risk Disclosure