Riding on the momentum of the Federal Reserve's September rate cut, Bitcoin led the crypto market to rebound strongly, rising from a low of $52,590 to a high of $65,718, an increase of 24.9%. Other currencies also followed suit and began to rise, with many even doubling in price. The market seemed to be on the verge of a five-month consecutive decline, breaking the historical curse of Bitcoin rising less and falling more in September.

The Fed’s 50 basis point rate cut has given the crypto market a shot in the arm, not only allowing the crypto market to gradually get out of the negative market, but also changing many people’s expectations for the subsequent market. The Greed Fear Index, which best reflects market sentiment, has risen from 22 (fear) on September 6 to 59 (neutral) now, close to greed. Many crypto communities and industry media have voiced “buy at the bottom” and “a big bull market is coming”. It can be said that the crypto market has become FOMO overnight.

So has the much-anticipated fourth halving bull market started? What stage is the market in now? What kind of bull market will it lead to? This article will analyze them for you one by one.

Rational analysis: Is the fourth round of halving bull market really coming?

Let’s first answer the most basic question in the current crypto market: Has the fourth bull market arrived? This is a question that determines most people’s investment strategies and return expectations.

Let me give you the answer first: the bull market has started!

Let me tell you the reason:

Historically, the bull market starts 3-5 months after the Bitcoin halving is completed, for example:

The first halving took place in November 2012, and the first bull market began in February 2013.

The second halving took place in July 2016, and then the second bull market began in November 2016;

The third halving will take place in May 2020, and then the third bull market will begin in October 2020.

The reason behind this is not hard to understand: halving will trigger changes in the supply and demand relationship, which will take time to be transmitted to all aspects of the market, including the behavior adjustment of miners, the market expectations of investors, the promotion of the media and social networks, and the self-fulfilling effect of historical laws. In each halving cycle, monetary policy and the economic environment will also "cooperate", so Satoshi Nakamoto is not only a technical genius, but also a financial genius.

From this round of halving, Bitcoin completed halving in April this year, and it has been exactly 5 months since then. Of course, history will not repeat itself, and we cannot simply stick to the old ways. So let's analyze the specific performance of the market before and after this round of halving: Bitcoin bottomed out in June 2022, and after 1 year and 4 months of bottom shocks and main force accumulation, it began to rise in September 2023, until March this year, before Bitcoin halving, in 6 months, Bitcoin broke through the historical high of more than 24,000 US dollars to more than 73,000 US dollars, a 3-fold increase.

Led by Bitcoin, many altcoins have also seen a 3-fold or even more increase, but this round of rise can actually be seen more as a stimulus from the approval of the Bitcoin spot ETF. At that time, the market did not have sufficient liquidity, and there was not enough new capital entering. It was more of a game of existing market funds. Therefore, when the FOMO of various participants in the crypto market was over, the market, which lacked new capital inflows, immediately began a 5-month-long volatile decline.

Until the 19th of this month, the Federal Reserve confirmed a 50 basis point rate cut, and the market really began to have liquidity from the fundamental level. It also really activated the market from the fundamental level. After all, we all know that the basic logic of the bull market is: there is a constant influx of new funds. The Federal Reserve is the biggest faucet of the entire world economy and financial market.

In fact, from the perspective of hindsight, the round of increases at the end of last year and the beginning of this year can be seen as a test run stimulated by external factors, that is, the test run stage before the start of the fourth round of halving bull market. It is not the beginning of the bull market, but its excessive brilliance, especially breaking the historical highest value of Bitcoin, gave many people an illusion: the fourth round of halving bull market started ahead of schedule, and then the subsequent plunge made people feel that this round of bull market was so short.

Now, whether it is the brewing market sentiment after the halving, the transmission time of supply, demand and price, or the monetary policy and the overall economic environment, it has already indicated that the bull market has begun. After the interest rate cut, everything is ready, and the east wind has finally arrived.

Data speaks: The current bull market is in its initial stage

As we all know, the bull market can be roughly divided into three stages: early, middle and late stages. According to their main characteristics, they are also called: incubation preparation period, full outbreak period and bubble crazy period. There will be a transition period of longer or shorter time between each stage. The characteristics of the transition period are generally range fluctuations, which gradually wear out the patience of investors.

So what stage is the market at now?

Let me first state the conclusion: we are in the initial stage of a bull market.

The market at this stage will present a feeling of being warm and cold, with ups and downs that make people very confused, and the bulls and bears in the market are almost evenly matched. The gains of most currencies are very limited, and the market is slow, which will wear out your patience.

This time we will use some common data indicators in the market to support the above point of view:

Bitcoin rainbow chart: Currently in the "continue to increase holdings" range, the next range is "cheap price". Based on past experience, Bitcoin in this range after halving is the initial stage of the bull market.

MVRV indicator: Currently it is 1.94 (coinrank); currently it is in a very low risk position.

Note: The higher the index is, the more overvalued the price is and the higher the risk is. If it is greater than 3.5, the bubble is too big.

Puell Multiple indicator: currently 0.73 (coinrank);

Note: Exploring the market cycle from the perspective of mining revenue, the values ​​are in the 4-10.5 area, indicating that the current market sentiment is relatively greedy and may be in the tail end of the bull market.

From the above data, we can make a comprehensive analysis: the current price of the crypto market is in a low-risk area, that is, the price is relatively low. In terms of vertical comparison with history, it is basically similar to the data after the first three rounds of halving, which is consistent with the judgment of the bull market in the initial stage.

The slow bull market is coming: the crypto market will gradually mature

Let's first talk about what a slow bull market is: Bitcoin will hardly experience a sharp rise or fall in the future due to its increasing size and the entry of institutions. Instead, it will see a slow climb and a decline, and the bull market will last longer. As the stabilizer and weather vane of the entire crypto market, the slow bull market trend of Bitcoin will also make other currencies start to take a "stable" route.

Let's first look at some data to see why Manniu was established:

From the perspective of the entire market, the number of Bitcoin crashes and surges is decreasing in each bull market. The author pulled the data from tradingview:

In the first round of halving, the maximum daily drop/increase exceeded 15% as many as 76 times;

In the second round of halving, the maximum daily drop/increase exceeded 15% as many as 68 times;

In the third round of halving, the number of times the maximum daily drop/increase exceeded 15% dropped sharply to 20 times;

It can be seen that as Bitcoin becomes more mainstream, the market matures and volatility decreases significantly. On the positive side, this is conducive to attracting more people to enter the crypto market, especially institutions represented by Wall Street, which is conducive to the long-term development of the industry. However, on the negative side, an increasingly mature market also means fewer opportunities for ordinary people.

In terms of the duration of the bull market, Bitcoin’s first halving saw a 105-fold increase from $11 to over $1,169, which lasted for one year. Bitcoin’s second halving saw a 30-fold increase from $650 to $19,800, which lasted for one and a half years. Bitcoin’s third halving saw a 17-fold increase from $3,800 to $69,000, which lasted for one year and eight months.

In general, the duration of each bull market is getting longer, which is as it should be, because the scale is getting bigger, the cryptocurrency ecosystem is getting richer, and the depth of involvement of institutional money is getting deeper.

The evolution of the slow bull market requires our investment strategies and profit expectations to change accordingly. In this round of bull market, the rise and fall of the market will not happen overnight, but will be slow-cooked and cut with a soft knife. We need to have greater patience and lower our profit expectations. Like the previous three bull markets, it will be rare to see 100-fold or even higher returns.

Regarding the current market conditions, the old saying still applies: patience is the watershed of wealth.

Finally, this article is for reference only and not as investment advice. The market is risky and you should be cautious when entering the market.