Veteran crypto analyst Bob Lucas said that while Bitcoin has entered the final stage of its current four-year cycle, he cautioned that the market may still need to fall another step before a durable cycle bottom forms.
In his latest “Four Year Journey” update published on June 4, Lucas framed Bitcoin’s recent retest of February lows as largely an expected development rather than a break from historical cyclical behavior. He argued that Bitcoin’s rebound in May, when the price approached the low $80,000s after falling toward $60,000 in February, appeared to be a countertrend move within a broader bear market structure.
“It’s very rare for a cycle to end very early, I mean less than 10%, maybe around 5%, but it will also end on the first significant drop from the high,” Lucas said. “There’s always retesting. There’s usually always a lower low and at least one lower low, if not a second lower low.”
Lucas said that while Bitcoin peaked in October and has since fallen below its 10-month moving average, he sees this as confirmation that the previous cycle’s rally is over. He said the decline through February was then followed by a natural recovery rebound, drawing in bulls hoping for a rapid continuation towards previous highs. The rally stalled around $83,000, close to the $85,000 area he had predicted, but Bitcoin reversed and fell about 25% toward its February lows.
Lucas begins reaccumulating Bitcoin
While Lucas argued that Bitcoin may not be out of its low price cycle, he said his model portfolio saw its first buying action in three and a half years. 10 added to portfolio $BTC At the $65,000 level, that allocation will be approximately 58% Bitcoin and 41% cash. He emphasized that this move is not a judgment that we have already reached the bottom, but rather an attempt to start reaccumulation at a more favorable long-term level.
Lucas said the current key level is $53,000. He said that once Bitcoin reaches that territory, the model portfolio will use its remaining cash to return to a full Bitcoin allocation. This level is important because it roughly corresponds to the midpoint of the broad four-year cycle structure.
“The best strategy I see at the moment, which is subject to change at any time, is to use all remaining cash to buy the remaining Bitcoin at the $53,000 level, returning to a 100% allocation,” Lucas said. “The $53,000 level is the midpoint of the entire four-year cycle.”
He acknowledged that $53,000 may seem harsh, but argued that it is not extreme from a Bitcoin perspective. He said such a move would only result in an additional drop of about 15% from the current region, while Bitcoin has already fallen by about $20,000 over the past two to three weeks. He also pointed out that past bear markets have produced much larger drawdowns, with a peak-to-trough decline of 77% in the 2021-2022 cycle, compared to current drawdowns of around 51% to 52%.
Lucas said that while a 65% to 70% drawdown was not a prediction, it was “not surprising” given Bitcoin’s historical volatility. By his calculations, a rise to $53,000 would represent a decline of about 57% from the cycle high.
The final cycle window opens
Lucas was open to a more bullish scenario. He said the retest creates the first credible possibility that the four-year low cycle will shorten, forming a reference point towards the end of the summer and then forming as a double bottom above the May high. He assigned a relatively low probability of about 25% to that outcome.
His base case is that Bitcoin’s cycle low should form around the traditional October or November period, and possibly December. Lucas said Bitcoin is now in the 43rd month of its cycle and has entered a broad zone where four-year lows typically occur around the 47-48 month average.
“The window hit me,” Lucas said. “Right now, the four-year cycle is approaching or coming to an end. But as I said before, this is no different than previous cycles.”
Lucas said that in the short term, Bitcoin is oversold and could likely rebound towards its 10-week moving average of $73,000 before falling again. He also argued that Bitcoin should not trade above its May highs of around $83,000-$85,000 in the coming months, unless a new cycle has already begun.
At press time, $BTC It traded for $62,247.
