For me who has experienced the bear market in 2018 and 2019, the bull market in 2020 and 2021, and the bear market in 2022 and 2023, no matter which year it is, the market has a rule. The first is cyclicality, that is, there will be a small bull market, the cottage will have a 1-5 times increase, and the big cake will have a 40% increase. The second is the two-legged theory. Whether it is rising or falling, the market cannot go far with one foot, just like a person, only two feet can maintain balance, so that you can walk safely and run quickly.
My understanding of cyclicality: Every year, the market will have New Year's Eve market, golden autumn market, and halving market (bull market). Since 2018, the market situation every year has been cyclical.
Golden Autumn Market: Starting from early July 2018, the market rose by 40% in one month. In July 2019, the price of Bitcoin rose by more than 80%, and the price of copycat Bitcoin rose by several times to dozens of times. In July 2021, the price of Bitcoin rose by more than double. In October 2023, the price of Bitcoin rose by about two times.
New Year's market: Starting from February 8, 2019, the price of Bitcoin rose more than three times. In January 2020, the price of Bitcoin rose by about 50%. In January 2021, the price of Bitcoin rose more than doubled.
Halving market: In May 2020, Bitcoin rose nearly 20 times, bull market in 2024? ? ?
Through these observations, we can see that the market itself has its own operating rules. Don’t always be shocked and think that if it falls in two days, it is a bear market, and if it rises in another two days, it is a bull market again. This kind of thinking is very dangerous.
The other is the two-legged theory, this situation will appear in the one-hour cycle, the four-hour cycle, the daily cycle, and the weekly cycle. For example, the pullback on August 5 formed two legs at the weekly level. In previous articles, I have emphasized many times that at the weekly level, the market must use time to exchange for space, rather than thinking that the bull market is coming as soon as it rebounds. This is very fatal. We can see from the liquidation data on August 6 that how many people are fully invested and fully financed, nearly 9 billion RMB. The slight fluctuation in the early morning of today also resulted in a liquidation of nearly 800 million RMB. As the saying goes, money doesn't come in a hurry. Stay patient and the market will definitely reward you.
The market is neither profound nor unpredictable. What we have to do is to be responsible for our own capital when the trend changes, so that next time, you will not suffer losses or be trapped.
