Author: Crypto Nova
Compiled by: TechFlow
The bull market is coming! The season of unilateral rise is not far away
We are about to enter the second (i.e. parabolic) phase of this bull market which will push our altcoins to new heights!
Let me bring you up to date on the latest developments.
If this is your first market cycle, you may have been exhausted by the dramatic market correction of the past three months.
Looking back at my first cycle, after seeing my altcoins drop by over 50% after the Bitcoin halving, I thought it was all over.
I was totally wrong.
This post will cover:
A healthy correction in the crypto market
90-day “dead zone” after halving
Selling pressure eased in the third quarter
Buying pressure increased in the fourth quarter
Let our altcoins soar
Let's take it step by step.
1. Healthy Adjustment of Crypto Market
No asset can continue to rise without a correction. Corrections are healthy and lay the foundation for a strong bull market to build.
Each cycle, $BTC is rejected multiple times at its previous all-time high before a strong breakout occurs.
But why is this happening?
Traditional investors sell and new investors buy.
In this process, $BTC is transferred from weak hands to strong hands. This is a very bullish sign!
Investors who bought Bitcoin in the $50k and $60k range will not sell at $73k. They will hold their BTC for longer with the goal of making a good profit.
Recently, whales have been buying in large quantities!
In July, whales bought $4,000,000,000 in BTC at the fastest rate since April 2023.
And it’s only the middle of the month!
As a result, the $BTC supply on exchanges continues to decline.
Sooner or later, once buying pressure returns to the market, this will lead to a supply shock that most people severely underestimate (more on this later).
First let's add some more bullish news!
2. The 90-day “dead zone” after the halving is almost over
History doesn't repeat itself, but it does rhyme!
Historically, Bitcoin and the entire crypto market have always faced major adjustments before and after the Bitcoin halving event.
This period is also known as the re-accumulation phase, during which BTC changes hands (as mentioned above, traditional investors sell and new investors buy).
On average, the post-halving “dead zone” lasts about 90 days. We are already 85 days in
But it gets better...
3. Selling pressure eased in the third quarter!
The workings of the market are very simple. The price of an asset is determined by supply and demand.
More buyers than sellers? -> Prices go up.
More people selling than buying? -> Prices fall.
In the second quarter, BTC faced huge selling pressure.
Who sold BTC in Q2, causing my position to drop?
Bitcoin Mining Companies
Grayscale and BTC ETF
German Government
Mt. Gox Fear, Uncertainty and Doubt (FUD) Heightened
Together, these events resulted in significant selling pressure on BTC. And altcoins always follow Bitcoin’s movements.
The good news is that selling pressure is easing.
Grayscale sell-off slows significantly
The German government no longer has BTC
Bitcoin Mining Companies Are Almost Complete With Their Selloff
Mt. Gox will slowly refund creditors in the third quarter, rather than all at once as everyone thought...
In the third quarter, there will still be some selling pressure
But not as much as in Q2. Once the market absorbs these BTC and sellers run out, the price will stabilize.
But just easing selling pressure is not enough to push our positions higher. We also need buying pressure. And we will get it in the fourth quarter.
4. Buying pressure increased in the fourth quarter
Who will push up our positions?
US election
US interest rate cuts
Bankrupt exchange FTX refunds customers
This is very important, so let’s take it step by step. The US market is a major player in the crypto industry.
Therefore, the dynamics of the U.S. market and changes in crypto policy can have a significant impact on the entire industry.
In 2024, we are witnessing some crazy changes that even cryptocurrency industry veterans did not expect.
Cryptocurrency has become a key issue in the US presidential election.
Trump called himself the "Crypto President," and the Biden administration quickly adjusted its anti-crypto stance after seeing the success of Trump's pro-crypto stance.
Both parties are vying for the support of crypto voters. The outlook is promising!
The US election will be held in November 2024.
As Election Day approaches, the competition between the two parties for the support of crypto voters will become more intense.
This will increase awareness of cryptocurrencies among all U.S. citizens as well as people around the world who are watching the election.
They will attract more ordinary investors to enter the market.
Let us see the benefits!
As inflation cools in the U.S., a rate cut is increasingly likely. The probability of the Fed announcing a rate cut in September is 94.4%.
Rate cuts = higher risk asset prices
After each rate cut, holding cash in a bank account becomes less attractive because the bank will earn less annual interest.
The wealthy will rebalance their portfolios and increase exposure to risky assets, including cryptocurrencies.
This will increase liquidity in venture markets such as cryptocurrencies.
So far, so good. But it's about to get better.
One particular factor will significantly increase buying pressure in the fourth quarter.
That is, FTX will start refunding customers in the fourth quarter!
A quick recap of what happened:
FTX was one of the largest cryptocurrency exchanges in the United States during the 2021 bull run. However, the exchange was involved in fraud that resulted in billions of dollars in customer funds being lost in 2022.
In the fourth quarter, FTX will distribute $16 billion in cash to its customers.
Why is this good news?
Because most FTX users are loyal fans of cryptocurrencies, it is likely that most of the funds will flow back into the crypto industry.
This could lead to significant buying pressure.
5. Capital inflow will drive our altcoin prices up!
Let's look at this chart again. What do you see? Can you spot any patterns?
That’s right!
We are getting closer and closer to the second phase of this bull market, the phase of exponential growth.
Once Bitcoin breaks out and hits new highs, it will drive our altcoins up with it!
It's simply a matter of market dynamics.
Buying pressure is greater than selling pressure = price rises
To summarize, selling pressure eased in the third quarter and buying pressure increased in the fourth quarter, so...
Just a little more patience and our altcoin prices will soar.
The only question to ask is,
are you ready?
