Source: Talking about Li and other things
In a previous article of Hualihuawai, we mentioned: Our personal expectation (guess) for Bitcoin to reach $100,000-120,000 in this cycle remains unchanged, but with Trump's victory causing Bitcoin prices to quickly break through historical highs, coupled with some new positive measures that Trump may take for the crypto market and the Federal Reserve's continued expectation of interest rate cuts, we even believe that Bitcoin may reach a maximum of $150,000 next year (2025).
But even so, when Bitcoin officially broke through $100,000 on December 5, I still sold 10% of my position according to the original plan, because I will strictly abide by my own trading discipline. As shown in the figure below.
Then, a friend commented: I was just about to buy, and you started selling? Can I still buy Bitcoin now?
This question may vary from person to person.
As Hui said in the group yesterday: don't directly ask me whether to buy or sell; that’s not a decision others should make for you.
Or as Boss Heng said in the group yesterday: it depends on how you consider it; if this bull market rises to $150,000, and the bear market falls to $50,000, and the next bull market rises to $250,000, as long as you are willing to ride the roller coaster, then holding it completely is no problem.
In fact, many people are unable to make trading decisions, and at the root of it lies their confidence in the market (or the asset) and their own position management (including capital allocation, investment portfolio, goal setting, execution cycle, risk management, etc.).
In short, money is not endless, but you can lose it all. If you want to lose money in a bull market, just follow these few points, and you can easily achieve that.
- Lack of focus
In a bull market, many people will completely forget their initial goals or trading discipline, and then buy whatever story is hot, trying to seize every market opportunity, but the final result often becomes being someone else’s exit liquidity.
- Not taking profits
Once entering a bull market, many people will be influenced by various messages, and many KOLs will tell you that the bull market has just begun, and all you need to do is to immediately buy various tokens they recommend. But we must learn to respect the market; bear markets don’t say they have reached the bottom, and bull markets don’t say they have reached the top. If you are fortunate enough to make money, you need to take profits in batches according to your plan. Some investments can be liquidated to improve your life, while others can be kept for future growth.
- FOMO
Almost everyone knows that they shouldn't fall into FOMO, but it seems easier said than done. In a bull market, there are too many temptations constantly attracting people; one moment a certain project has multiplied several times, and the next moment 'Old Wang next door' has become rich again... Then you can't help but chase after those so-called opportunities in front of you, but the result is often: others buy and the price rises, when you buy, it falls.
- Overtrading
In a bull market, many people can't resist temptation and will unconsciously destroy their own position management and investment portfolios, even thoughtlessly imitating others' trades. However, in reality, the more frequent your trading and the more complex your trading process, the harder it becomes to execute. In other words, overtrading will lead to diminishing returns, increased trading costs, increased slippage... It can also lead to bad habits of revenge trading.
- Lack of patience
In this cycle, we started dollar-cost averaging into Bitcoin in 2022, and only executed one planned sell operation this month (December 2024), which took almost two and a half years. During this process, I rarely watched the market; I mostly looked at it because I needed to write articles, and most of my time and energy were spent on writing and content output.
Many times, trading requires a certain level of patience, and trading often goes against human nature; a restless mindset can lead you to give up trading too early, and the more you obsess over prices every day, the more likely you are to lose your positions.
- Ignoring risks
For example, in trading, many people can't resist temptation and end up chasing profits that they had already realized into some altcoins, often ignoring the greater risks they might face.
For instance, some people may blindly follow strangers or so-called teachers in trading, resulting in being scammed. Remember, no matter what stage the market has developed to, risk issues should always be treated with utmost importance; otherwise, you might lose everything in a short time.
In short, if you want to lose money in a bull market, just follow the above situations, and you can easily achieve that. Conversely, if you want to make money in a bull market, you need to overcome those problems as much as possible.
Next, you can continue to think about a few questions:
In the past two years, many people have believed that this round of bull market is highly likely to occur in 2024-2025, and that Bitcoin is likely to rise to $100,000. So, let me ask you, in this round of cycle, with Bitcoin rising from a relative bottom of around $15,000 to now $100,000, a gain of 550%, have you made money?
Although many people currently believe that Bitcoin may continue to rise in 2025 and possibly reach $150,000, let me ask you, would you buy Bitcoin now?
If you buy Bitcoin now and the market then experiences a pullback, can you hold on and not sell? Do you dare to increase your position during a pullback? Will you set a stop-loss plan? Or at what percentage will you consider a stop-loss?
Do you really think Bitcoin will rise to $1 million in the future?
Perhaps many people have not carefully thought about these simple questions, as they always hope to find a universal answer or a definitive conclusion from others. But as we mentioned in previous articles, any so-called prediction is merely probabilistic; what you need to focus on is not to ask others for a definitive answer directly, but how much you are willing to invest for certain probabilities.
Using the previous example, if there is a 90% probability that Bitcoin will continue to rise to $150,000 in 2025, how much risk (how much capital to invest, what is the longest investment period) are you willing to take for this 90% probability?
Some may be willing to invest 10% of their wealth for this, others may invest 100% of their wealth (even leverage), while some may still believe Bitcoin is a scam and won’t buy it...
But if you believe that BTC has a chance to reach $150,000 next year and you are willing to make some sacrifices and bear the corresponding risks, then you should start learning about Bitcoin and the market now, because only by understanding it yourself can you truly hold on.
In the previous article about Ethereum (December 6), we mentioned several factors affecting ETH prices, some of which are also applicable to BTC (and even the entire cryptocurrency market trend). Next, we will continue to analyze BTC from the four dimensions of time, macro, demand, and on-chain data!
1. From the time perspective
From the current price trend of Bitcoin, it seems to still follow certain historical patterns, closely related to past cycles. If we directly compare the last two bull markets with this one, we can see some basic rules. As shown in the figure below.
History does not repeat itself, but it often rhymes. If we were to carve a boat according to the comparison chart above, it seems that we are now entering the most explosive price acceleration phase of the bull market cycle (the later stages of the bull market).
Of course, the above is merely a comparison from historical cycles. If you hope to gain more references from the time dimension, you might consider looking at the article we published last month (November 18): 15 Key Indicators for Timing the Top of the Bitcoin Bull Market.
2. From a macro perspective
The bull market of 2021 was significantly influenced by changes in global liquidity due to the pandemic, and this round of bull market seems to have some similarities from a liquidity perspective. Bitcoin currently seems to have become a global macro asset; in addition to the four-year cycle and halving pushing prices, the correlation between global liquidity (monetary easing policies) and Bitcoin prices is becoming stronger.
From the current Federal Reserve's policy perspective, interest rate cuts are expected to continue until 2025, which will further create favorable macro conditions for risk assets (including crypto assets). As shown in the figure below.
3. From a demand perspective
Take MicroStrategy, which we are familiar with, for example; they announced a financing plan called the 21/21 Plan in October this year, aiming to raise $42 billion in new capital to purchase Bitcoin over the next three years. As shown in the figure below.
This will further affect the demand for BTC. In addition to MicroStrategy's own persistent and active purchasing power, their actions will also attract more capital to join the field.
Additionally, let’s not forget about the BTC ETF; US spot ETFs have currently accumulated over 1.1 million BTC, a number that has already surpassed Satoshi’s wallet, as shown in the figure below. The approval of ETFs has been less than a year, and it seems this is just the beginning.
Perhaps in the past, some people might have used the argument that buying BTC has barriers, or that BTC is too expensive, but now, people in traditional finance can easily buy BTC ETFs (IBIT, FBTC, GBTC, etc.), which will further stimulate the long-term demand for BTC. As shown in the figure below.
4. From on-chain data perspective
Through on-chain data, we can intuitively find that demand from retail Bitcoin investors is surging, reaching the highest level since 2020. As shown in the figure below.
As Bitcoin broke through the psychological barrier of $100,000 this month, extensive media coverage seems to have reignited retailers' attention and purchasing demand, and retail investors appear to be increasingly interested in Bitcoin.
For veteran investors, the large-scale entry of retail investors often means that long-term holders may begin to take profits, but during this process, the market usually continues to welcome the craziest moments. Currently, Bitcoin breaking through $100,000 is just the beginning of attracting new investors. We are theoretically still some distance away from this round of bubble (in terms of time). Perhaps approaching $150,000 will become the threshold for this round of bubble.
Next, we should focus on and monitor the activities of retail and institutional investors; strong enthusiasm from retail often indicates the maximum extent or strength of market optimism, while institutional interest and movement determine whether it can continue to provide the driving force for this sentiment. Remember, in this market, only a small number of people can ultimately make money.
As for altcoins, let’s mention it at the end of the article: we still maintain our previous viewpoint: when retail investors rush in massively, and the altcoin sector begins to rotate, these performances are often one of the signals that the bull market is entering the later stages. If you don't want to lose money in a bull market, you need to adhere to the most basic principle of 'don't touch what you don't understand, protect your principal', DYOR, don't chase highs, don't leverage, or simply don't touch altcoins.