While history does not repeat itself exactly the same way, financial market cycles and trends do exhibit striking similarities.
Looking back, the cryptocurrency market bull run from 2020 to 2021 has indeed left a deep impression on many investors. The key nodes of that bull market include:
- Start-up stage: In mid-October 2020, the market ushered in a significant round of rising prices. The main driving force of this round of rising prices came from the large influx of capital in the U.S. market into the cryptocurrency field.
- Mid-term adjustment: After entering 2021, the market continued to heat up, but by the end of April, a technical dead cross signal appeared on the Bitcoin weekly chart, indicating short-term adjustment pressure. Despite this, the market maintained its strong performance for the first half of the year.
- Plunge and recovery: The subsequent "519" plunge caused the market to experience violent fluctuations, and Bitcoin entered an adjustment period of more than two months. However, around July 20, the market gradually stabilized and started a second round of rising prices.
- Bear market precursor: Eventually, as the market reached a high near November 2024, affected by factors such as expectations of U.S. interest rate hikes, the cryptocurrency market entered a bear market stage.
Now, when we look at the bull market from 2023 to 2024, it is not difficult to find many similarities:
- Set sail again: In mid-October 2023, the market once again ushered in an opportunity to rise, also benefiting from capital inflows in the US market.
- Mid-term warning: As time passes to the end of April 2024, the Bitcoin weekly chart once again showed signs of a dead cross, even though the market has experienced a strong rise for half a year.
- Adjustments and expectations: After the dead cross, the market experienced several large single-day fluctuations, and Bitcoin entered an adjustment cycle of more than two months. At this moment, for those investors who firmly believe that the market has the potential for a second surge, it is a good opportunity to deploy high-quality assets and accumulate bottom chips.
Therefore, although history will not be completely copied and pasted, understanding and grasping the cyclical changes in the market is crucial to formulating investment strategies and capturing market opportunities. Investors should maintain a cautious and optimistic attitude and make more informed investment decisions based on the current market environment, macroeconomic factors and technical analysis.
