Hello Everyone!

Bitcoin is hovering around $90,000, and bearish price action continues.

In this video, I’ll cover my posts on X, including the Magic Bands V2, Relative DPO Zones, Arron Oscillator, and 3 Week Stochastic RSI, to demonstrate why I think the bear market is underway and what happened with data at the cycle top.

Enjoy!

Summary (AI Generated)

Magic Bands Version 2 Introduction

• The original Magic Bands were based on the BLX (Brave New Liquid Coin Index) symbol, but the live API stopped providing data, causing updates to cease as of August 2025.

• Despite the cutoff, the original bands were successful, with two interactions at level three (not the cycle top band in purple), which was considered a potential cycle top due to the need to account for potential diminishing returns in indicators.

• Context clues and other data supported the view that the cycle top occurred in August 2025, even with slightly higher highs afterward.

• Magic Bands Version 2 uses a different symbol for live price action, functioning similarly but with improvements, including slightly different level placements that remain highly accurate.

• Price interactions with bands are evident at key points, such as April and July 2023 highs stopping at an orange intra-band.

Differences in Cycle Top and Bottom Bands

• In the original Magic Bands, the cycle top band is stagnant and does not account for diminishing returns.

• Version 2 incorporates diminishing by decreasing one band per cycle for the top: November 2013 at +3 (gray band), December 2017 at +2, April 2021 at +1 (hit multiple times from January to April), and cycle top levels achieved in January and October 2025.

• For cycle bottoms in the original: January 2015 two levels below red, December 2018 one level below, November 2022 at red, showing increasing prices relative to bands.

• Version 2 offers greater consistency for bottoms: January 2015 at red band, December 2018 just below red, November 2022 at red.

• This implies the purple level is no longer the cycle top band; next cycle’s top will be one lower (current level three).

• Current cycle bottom band is at $27.3K, expected to rise slightly to around $30,000; past examples show price sometimes dipping lower (e.g., to $22,000), which is considered reasonable given diminishing returns and increasing bear market drawdown pressure.

• Bear market drawdowns have decreased historically but are not guaranteed to continue.

Diminishing Returns and Popular Indicators

• Popular indicators like MVRV, PI cycle top, weekly MACD, and 22-day RSI did not trigger cycle top levels this cycle, leading some to claim no cycle top metrics were met.

• These often fail to account for diminishing pressure, a common risk.

• Relative DPO zones show a clear cycle top zone not reached at all this cycle, only hitting local high zones twice and support in October 2025.

• Reasons include diminishing pressure and bearish divergence, seen in past cycles (e.g., April and November 2013 with lower metric but higher price, occurring three times).

• Many models failed in 2021 due to diminishing (e.g., log growth curves, rainbow models broken to the downside), leading to retrofitting or discarding.

• MVRV on LookIntoBitcoin was unsuccessful but retrofitted post-cycle with a new top zone.

• Inference from nuanced indicators, technical analysis (triple high time frame bearish divergence), and reaching important levels (like level three twice) suggest a bearish scenario aligning with halving cycles theory timeframe.

Aroon Oscillator and Cycle Top Evidence

• The Aroon oscillator reached cycle top levels three times: March and December 2024, and October 2025.

• Expecting the cycle to continue into 2026 is considered greedy, especially after three hits, unseen since the first cycle (June 2011 and twice in 2013); other cycles typically hit twice.

• Projects a return to cycle bottom levels, with a long way to go; effective as a bottom indicator, expected around November 2026 per halving cycles theory.

Money Flow Index Reset and Bearish Signals

• The money flow index shows a clear return to bearish levels, the first this cycle.

• Bearish resets sometimes occur outside bear markets, like October 2019 (mid-cycle) or June 2021 (between double tops), but these are unique.

• Other data (Magic Bands achieving first/final cycle top, halving cycles timeframe) indicates this is an official bearish retest, not a double top transition or mid-cycle correction.

Stochastic RSI Phases

• On a three-week timeframe, cycles have four clear phases marked by stochastic RSI crossovers and returns to lower levels.

• Phases are consistent across cycles, with the fourth as the cycle top.

• A picture-perfect cycle top phase has occurred, without needing a specific level (e.g., November 2021 triggered low).

• Bearish divergence caused a similar low outcome; returning to the stochastic floor is common for double top transitions and cycle bear market starts.

Overall Expectations

• A traditional bear market is anticipated, despite contrary views, after three years of bullish action.

• Data aligns perfectly, with diminishing pressure and bearish divergence causing unexpected behavior in indicators.

• Cycle tops are often tricky, not always hitting clean levels for easy interpretation; August and October 2025 fit this pattern.