Is Bitcoin now in a double top structure at the daily level? Will there be another Bitcoin starting with 3 before and after the Bitcoin halving? Can altcoins be hoarded now to wait for a rise?
Historically, Bitcoin likes to form double tops and double bottoms. The third round of halving bull market in 2021 and the first round of halving bull market in 2013 were both double bull tops. After the double bottoms in December 2018 and March 2020, the third round of bull market really started. Although history will not repeat itself, history will always play in a similar rhythm.
The longer an investment target exists, the larger and thicker its trend pattern, accumulated transaction costs, etc. Even if the main force changes and the chips change hands N times, the new main force will still follow the old trend pattern, which will be at most similar.
For example, Bitcoin is a chip-dense area at 48,000. If a new trader wants to break through 48,000, he must eat up all or most of the chips deposited at 48,000, thus forming a new dense area. This dense area will be a support level in a bull market, and a pressure level during a bear market. The first Bitcoin was mined on January 3, 2009. Now 15 years have passed, and the potential energy cost of the deposit is enough. Therefore, the historical form of Bitcoin will be an important reference for the subsequent trend of Bitcoin.
Judging from the current round of increases that began in October last year, there has been no increase in volume during the rise, and it can even be said that the volume has shrunk. This shows that the negative impact of the bear market atmosphere after the previous sharp drop on investors has not been completely eliminated, and most investors still maintain a wait-and-see attitude. It also shows that the current popularity of the crypto market is relatively scattered, and investment sentiment has not yet been aroused.
Bitcoin spot ETF approved, Bitcoin halving countdown, and Federal Reserve rate cut expectations - with these three big bombs, can we say that the bull market is about to come?
There is no doubt that it is not. These three factors are all super positive and long-term positive. However, when a big bull market comes, it will also kill most retail investors and make them believe that all rises are scams and all declines still have room to go (retail investors will not dare to buy when the market falls).
The main use of these three major favorable factors for the current market makers is: before the bull market comes, during the trial phase, let retail investors chase the rise and sell the fall, attract some experienced - and also the most difficult to clean up - leeks to show their heads, and then cut them, paving the way for the official arrival of the subsequent bull market.
The three stages of a bull market: What stage are we in now?
The bull market can be roughly divided into three stages: early, middle and late. According to their main characteristics, they are also called the incubation and preparation period, the full outbreak period and the 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 bull market in now? Let me first state the conclusion: it is on the eve of the first stage, which means that the bull market has just shown its horns and has not yet officially started.
The entire market has just been pulled out of the ICU ward of the bear market and has not yet started to walk. Those who are now all-in betting on the big bull market will easily have their mentality broken, and then chase the rise and sell the fall, and die before dawn. I said in my last tweet that it is possible to chase the rise now, but most people do not have the patience and determination to hold it for years, because many of the people who are all-in now are novices and have not experienced a complete round of bull and bear cycles in the cryptocurrency circle. This experience is very important, but it is useless to just listen to others. Only by experiencing this kind of pain and blood rushing in person can you have a good mentality, grasp your own hands, and not make random operations.
Looking back at the progress of this bull market: starting from October last year, stimulated by the expectation of the approval of the Bitcoin spot ETF, it has risen for five consecutive months, thus completely getting out of the bottom of the bear market that lasted for more than a year. From this point of view, the current market situation is in line with the first stage of the bull market, that is, the incubation and preparation period. The bull market has come in despair.
But now because there is enough consensus on Bitcoin, it is difficult for the main force to achieve the goal of cutting off retail investors and using them as fuel for subsequent operations in one round of actions, so this market situation may just be a test stage, which is a very common tactic in the stock market.
Generally, double top structures are mostly caused by external factors, which change the main players’ trading script. For example, in the bull market of 2021, due to policy reasons, the 5.19 crash, the main players did not sell all their chips, and had to consolidate for a few months before pulling out the second bull head in November to sell. During the rise of the second bull head, most altcoins followed the decline but not the rise (sounds familiar, right?).
This time, the market was pulled up after a long period of washing, induced by the approval of ETF. However, after landing, due to the complicated information such as Grayscale, FTX aftermath, Mentougou, and US government selling, it caused a sharp drop of 10,000 points. The main chips were not sold out again. The current situation requires a second bull to ship out.
Mark Twain once said that history doesn't repeat itself, but it always rhymes! Although the prediction method based on carving a boat to find a sword may not be accurate, it can provide you with a perspective to see through the fog of the future.
Before the fourth round of halving officially starts: Can we still see bitcoins starting with 3?
People who are trading in the market now are more or less experienced. If the dealer wants to cut the profit and use it as fuel for the subsequent bull market, it will take some effort. This also determines that the subsequent market will not be smooth sailing for you, unless there is a black swan of the same level as the epidemic before the third halving, which will lead to a major reshuffle on March 12.
Of course, this is difficult, but the experience of the Federal Reserve's previous interest rate hikes also tells us that the year or so after each interest rate hike remains high is the peak time for various black swan outbreaks. The Federal Reserve has raised interest rates by 25 basis points since July 2023, and the interest rate has remained at 5.25%. It has remained at a high level for 6 months. The first half of this year just happened to be the peak time for black swan outbreaks. You cannot predict where liquidity will "suddenly" dry up first and become the first domino to fall, and then the chain reaction will be transmitted to the crypto market. This may be a tsunami earthquake for the crypto market.
Compared with the traditional financial investment market, the crypto market is insignificant. Take the world's largest stock market, the US stock market, for example. The total market value in January 2024 is 50.78 trillion US dollars, and the total size of the global bond market in 2023 reached about 133 trillion US dollars. The total market value of the crypto market is now 1.72 trillion US dollars, just like a small puddle next to the sea. When the sea is high tide, a wave of water overflows, which can flood the small puddle. But in the same way, when the sea recedes, a siphon will make the small puddle lose half its life.
So from the big picture, is the ocean rising or falling? Overall, it is still in the ebb stage, because the Fed's interest rate hike cycle has not ended, which means that the world's largest financial market tap is still shutting off. The entire world's financial market is in a stage of risk contraction, and capital is becoming more and more risk-averse. As a product of sufficient liquidity, the crypto market is undoubtedly a market with huge risks.
Under such circumstances, it is unrealistic to expect a huge amount of traditional funds to enter the cryptocurrency circle. The concepts of large funds and small retail investors are completely different. The first thing that large funds think of is not a surge in price or a doubling of the price, or an extra zero or more zeros, but to protect the principal and outperform inflation. If that doesn’t work, a smaller loss is acceptable.
As mentioned above, the entire crypto market is too small. During the period of overall market contraction, it is not enough for old money in the traditional financial market to venture into the crypto market.
From a micro-environmental perspective, this rise has already seen a significant increase, and a lot of floating profits need to be cleared before we can get back on track and prepare for the subsequent bull market. Other factors such as the miners' selling wave before the halving and the collapse of the project are not enough to change the overall trend, so I will not go into details.
Therefore, overall, I personally believe that in the future - before and after the halving, we can see Bitcoins starting with 3. If this is true, don’t be timid and buy the dip boldly.
At this stage, as I said in my previous tweet: 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.
