Howard Marks mentioned in the book "Cycles" that cycles can be roughly divided into three categories.

The first category: related to fundamentals - economic cycle, credit cycle, government regulation, counter-cyclical, corporate profit cycle, etc.

The second category: related to psychology - emotional cycle and risk attitude cycle

The third category: rotation in different investment fields - bad debt cycle, real estate cycle, market cycle, etc.

Today's video mainly analyzes why the potential bottom is formed from the emotional cycle.

This morning, I saw a member in the group saying that the German government transferred 1,000 BTC to the exchange again, and it was going to smash the market again. You have to understand that these 1,000 coins are estimated to not even be able to smash the 15-minute K line. And what really caused the market to fall. It is the overall market that has no confidence. After seeing this kind of news, think about the future. There may be tens of thousands or hundreds of thousands of coins that need to be smashed, and there are "Mentougou" and "the United States" to smash. Then I can still sell more than 50,000 or 60,000 bitcoins now, or cut my losses and wait until it hits 40,000 or 30,000. So what really affects the waterfall is not who sells the "immediately effective action", but the "potential behavior" of selling pressure. He smashed 1,000 or 10,000 in one wallet address, which was not enough to affect the market; and this behavior would affect 100,000 wallets or 1,000,000 wallets, smashing 0.1 or 1. That led to panic stampede and fell.

Then let's look back at every previous big drop. Some "bad" news, the most recent one was in November 2022, when "FTX" collapsed and ran wildly. Emotions fell to the freezing point. Major exchanges are frantically withdrawing money every day, fearing that they will "lose all their money" like FTX. You can see that from the "technical aspect" analysis at that time, it also fell through the big support area near 18,000, and then it was 12,000. The market has extremely no confidence. But on the contrary, when the emotional cycle is the most bearish, it is often the "big bottom" near 15,000.

Then let's go back to the present, the strong support area near 60,000. Through the "technical aspect", the weekly EMA21, the strongest long-short dividing line, has also been broken since October 2023, for 38 weeks and 266 days. The effective support area below is also back to around 4W8-4W4, just like everyone expected "1w2".

At all these positions, I still buy as planned.And maintain a bullish view.