There are 4 phases to the crypto bull run, and we are at the end of Phase 1. This post will show you how to take advantage of market cycles so that you don’t miss out on your opportunity for once-in-a-generation wealth.
How to seize the opportunity? You need to do three things:
Riding the stages of a bull market
Maximizing Profits
Avoid the most common pitfalls.
Phase 1: Accumulation
This is where we are this past year. The market bottomed out after the Terra crash, FTX closure, and the USDC depeg panic.
It is clear that the worst is over (unless something drastic happens with Binance/Tether).
Crypto prices are currently flat and boring. Even big news like Paypal launching a stablecoin has only a minimal impact on prices. Currently, there is no new liquidity entering the market and the market lacks volatility. It's like a PVP game between 500 degens, all trying to get to the next narrative before each other.
This is the preparation stage of the bull market, the chess pieces have just been placed on the chessboard. And this is also the best time to sow seeds.
Action Guide:
Stock up on good projects. Look for projects that you think will thrive in the upcoming bull run. These projects need to meet certain conditions: have product/market fit, competitive advantage, a team still under construction, a solid roadmap, and sound financial indicators.
Save your ammunition. It’s tempting to rush into some old projects. They look worth buying because they are down 90% from their all-time highs. But the fact is… most of the next cycle’s bright projects haven’t been born yet. People usually prefer to be the “earliest ones” in a brand new project rather than buy into an old one.
Don't over trade. Don't get caught up in games like hamster race and Bald, they may make you lose everything. You must survive first to win in the end. Don't join a bad hand because of boredom, be patient and wait for a good hand.
Fill your knowledge gaps. Bull markets are not for learning. Bull markets are for picking up money from the market. And now is the time to learn. If you don’t want to hear about a new protocol built on GMX now, you must spend a week during the bull market to learn the basics of GMX.
Monitor liquidity. Watch CEX inflows, watch stablecoins being deployed, watch DeFi TVL growth, watch overall crypto market cap growth. More liquidity means things are moving.
Phase 2: Early bull market
This is the phase where the price of cryptocurrencies starts to rise and the bears will have a hard time believing it. They pop up every two months and talk about $12,000 Bitcoin coming.
People get stuck in doubt and develop something called bear market PTSD, which can hinder your ability to make gains. Ironically, the earlier you are in a cycle, the greater the risk you should be taking before the crowd arrives.
What triggers a bull run?
Major events like a Bitcoin or Ethereum ETF getting approved, or a new country adopting Bitcoin as legal tender.
The Bitcoin halving is coming in 2024. While the past is no guarantee of the future, if enough people believe in it…
New crypto primitives. Last cycle, we had DeFi and NFTs. What will be hot this cycle? GambleFi? Telegram bots? NFT comeback? Blockchain games? Or RWA? They are likely to be some areas we haven't even begun to imagine. Think of something like Axies Infinity or Stepn, combined with better mechanisms.
Macroeconomic changes: The Federal Reserve stops raising interest rates, which will allow more liquidity to enter the crypto market.
Regulatory changes. The United States and other regions could provide more transparent, crypto-friendly frameworks.
Less friction. UX is still a pain for the average person in crypto. Better wallets, account abstractions, and more newbie-friendly dapps will help.
Developments in Asia. Crypto Twitter (CT) is extremely biased against the US. That’s why most CT don’t “understand” why Tron is so popular (it’s heavily used in Asia). Don’t underestimate the power of Korean degens, and Hong Kong is becoming more crypto-friendly.
It only takes one major event to set off a domino effect. Some “fallen” makes a lot of money, their lives take a qualitative leap, and they tell everyone around them. Then, such stories slowly spread across the network.
Action Guide:
Cut losing positions and grow winning ones. Don’t get emotionally tied to your portfolio. Just because a project achieved 5x doesn’t mean it can’t achieve 10x again. Cut your losing positions ruthlessly based on data indicators, momentum, and sentiment.
Take profits on the way up. No one can escape the top perfectly. Don't try to make every penny from the trade, create a profit-taking system and stick to it.
Beware of excessive risk. People use leverage, use their homes/pensions, or sell their Bitcoin and Ethereum to buy shitcoins. You can take risk, but be careful about it.
Lower your IQ. Some of the best performing projects have the worst fundamentals. The token economics will be a complete joke. But remember this: the price will only go up if other people buy it. And people are too stupid to understand the high IQ game.
Cult leaders. Cult leaders start to make their mark. They know how to pull coins and influence sentiment. Inevitably, cult leaders all seem to die in the end. You can either join early and exit with profits before the crash, or you can avoid them altogether.
Don’t ignore retail investors. It’s easy to get sucked into the crypto Twitter DeFi echo chamber where everyone is arguing over “real yield curve vs. flywheel effect.” Retail investors don’t understand any of this. So go where they hang out, like Reddit and YouTube comments.
Focus. Find a few areas to specialize in and keep up with the pace of the entire market. Missing some early opportunities, then entering too late and becoming an exit liquidity does not affect the overall situation. You can choose to build a small team to make up for your knowledge blind spots.
Phase 3: Bull Market Peak
This is the stage where retail investors start to pile in. They are entering stage 3 of 4 (but in their minds they think they are entering stage 2 of 5).
Bull markets are self-reinforcing. As prices rise, FOMO builds, and the positive spiral keeps pushing prices higher and higher.
Everything is going up. $10,000 in shitcoins can turn into life-changing gains. Whether you’re getting a haircut or taking an Uber, people talking about crypto will be everywhere.
FOMO and euphoria set in, the music never seemed to stop, and all common sense went out the window.
People started quitting their jobs to become full-time cryptocurrency traders. Others would sell their houses to invest in cryptocurrency.
Everyone is in a very good mood.
Can you spot the most important signals?
Mainstream media started covering cryptocurrencies. You would hear stories over and over about someone trying to find a hard drive with 8,000 Bitcoins or buying 2 pizzas with 10,000 Bitcoins.
Financial Youtubers like MeetKevin, Max Maher, and Graham Stephen will start uploading 3+ crypto videos per day.
Mainstream brands like Pepsi and McDonald’s will start mentioning cryptocurrencies to gain influence. Mainstream celebrities try to make money through sponsorships or launching their own NFT collections.
Everybody's working on it. When your Twitter stream is full of big words, your spider sense should go away.
Everyone will try to convince you that this time is different, and you have to fight your instincts.
The most important thing to do at this stage is to think about your exit plan. Keep a cool head and realize that the music will stop at some point.
Take your chips off the table and your future self is praying that you weren't an idiot. If you don't take profits, the market will take them back.
Stage 4: Decline
What goes up must come down - the top of the bull market has been seen. Now everyone wants to know if this is the top, or if the "super cycle" will continue.
They will try to tell you that this time is different - we are finally mainstream! Watch out for super cycle discussions, Bitcoin extension theories, etc. How many more years will this cycle last! ?
Remember, everyone has a financial incentive to keep the party going. The audience has to invest money, and more liquidity has to be constantly pumped into the shitcoins.
Moments of glitter and hope appear from time to time. Bitcoin peaked in November 2021, but the OHM fork, FTM/Solidly, and Luna are still rising.
Once prices crash, the shorts who missed out on the bull cycle and generational wealth two years ago will jump out and say, "I told you so."
What makes me so confident that there will be another bull run?
I’ve bet my career and the next ten years of my life on DeFi, and I have a firm belief in this space.
I'll keep things simple.
For the average person, life is bad and getting worse.
Credit card debt hits record high
Debt is at an all-time high for everyone
Student loan repayments are about to begin
Credit card interest rates hit record highs
Debt interest payments hit record high
Average monthly new car payment hits record high
Don't get me started on house prices
Society and culture have shaped everyone's lives into a very difficult pattern. Going to college and getting a job are not enough to survive and support a family. The cost of living continues to rise, and the middle class is disappearing.
All of this is happening at a time when the pressure to succeed in society is increasing.
No one in the new generation is interested in having a giant 401k at age 65. They want to be rich now. Everybody wants instant gratification. Everybody’s dopamine receptors are blown up. Everybody wants to show off their fabulous life and show everyone they’re the star, and that’s where the pressure comes from.
Humans are greedy and insatiable.
Cryptocurrency doesn’t just sell new financial infrastructure, it sells dreams. And there is no faster way for people to realize their dreams than with cryptocurrency.
Cryptocurrency is our best chance to achieve this.
In the crypto industry, if you want to seize the next bull market opportunity, you need to have a high-quality circle so that everyone can keep each other warm and maintain insight. If you are alone, looking around and finding no one, it is actually very difficult to persist in this industry.
