I often hear people say that if they had persisted a little longer, they would have made a fortune. Now is the beginning of the future, before dawn.
It is darkest before dawn, but never close your eyes, because those who dare not look directly into the darkness will not be able to see the first ray of light of tomorrow, no matter how pitch-black the night ahead is.
When we can finally see the dawn, we will find that the light is so warm, so dazzling, and the smell of money is so sweet.
That is what we can only see and obtain if we try our best. That is exactly the direction we are going. That is our hope.
The same is true for the cryptocurrency world. It also has its own turning point after the sudden realization in despair.
When everyone feels panic and despair, it is often the bottom and the turning point is about to come. Keep an open mind, otherwise you will fall in the dusk before dawn.
However, we cannot be called desperate now, but we are clearly in the darkness before dawn.
Let’s look at some data below
1. Shutdown price
The shutdown price in the above picture is the price that can be kept on the power bill.
Taking into account the equipment cost and operating cost, the actual cost of mining one Bitcoin is about 45,000 US dollars.
2. 200-day fixed investment cost
The current 200-day fixed investment cost is approximately 63,000 yuan.
In the cryptocurrency world, regular investments in Bitcoin can basically outperform most cryptocurrency speculators. So when the market price is lower than the regular investment price, that is to say, if you buy at this price, it will be lower than the cost of the regular investment.
That means the price of the currency is underestimated by the market. Buying the currency at this time can outperform those who make regular investments.
3. AHR999 Index
Bitcoin ahr999 Hoarding Index is currently 0.57
Through the analysis of Bitcoin's AHR999 index, we found that only 8.5% of the time, the ahr999 index is less than 0.45. This is the bottom-picking range, which is hard to come by.
46.3% of the time, the ahr999 index is between 0.45 and 1.2, which is the fixed investment range. That is to say, the period between 0.45-1.2 is when we increase our positions, and below 0.45 we can go all in.
From a historical perspective, this index is quite accurate.
4. Fear and Greed Index
Bitcoin's bubble index is currently at 22. The above chart shows data from December 2018 to September 6, 2024.
The time when this indicator is below 22 is very rare.
When the market's greed level is below 20, it means extreme fear. You should remember what Mr. Ba said: When others are fearful, I am greedy; when others are greedy, I am fearful.
Industry cycle and event-driven in the second half of the year
1. BTC has a four-year cycle
In 2016, it took 170 days to break through the previous high after the halving.
In 2020, it took 197 days to break through the previous high after the halving.
In 2024, 136 days have passed since the halving and the price is still fluctuating and correcting.
If history repeats itself this time, it will take about 50 days for Bitcoin to break through the previous high of 73,000.
Can't you wait fifty days?
2. BTC's rise and fall chart from September to October in the past 11 years
As shown in the figure, if we look back at the past 11 years of Bitcoin, there were only 3 years with rising September and 8 years with falling September.
But in October, only 2 of the past 11 years have seen a decline, and 9 have seen an increase.
3. Trump ascends to the throne
Trump wants to be the first crypto president, and his campaign team has set a precedent for cryptocurrency donations. This move not only demonstrates his enthusiastic embrace of the crypto field, but also his support for this emerging field in many campaign speeches.
At the same time, it cleverly portrays the Biden administration as an opponent that puts pressure on cryptocurrencies, intending to win the favor of voters in the huge digital currency community.
Trump made a major promise to American cryptocurrency holders to ensure that the future of crypto and Bitcoin happens in the United States and that the creation of a central bank digital currency will never be allowed.
Trump said that if he wins the election, he will ensure the future of cryptocurrency. It can be seen that Trump's coming to power in the November election will undoubtedly be a big boon to cryptocurrency.
4. CZ is released from prison
According to the database of the U.S. Bureau of Prisons, CZ's official release date is September 29. CZ has now been transferred to a halfway house. To some extent, CZ is indeed out of prison now, but he is still under the supervision of the U.S. government and cannot move freely.
According to Decrypt, CZ appears to have been released from a low-security federal prison in Los Angeles.
FCI Lompoc II moved to Long Beach’s RRM (residential reentry management)
A halfway house is a transitional facility that prepares prisoners near the end of their sentences to reintegrate into society.
It is obvious that CZ's release from prison is undoubtedly a positive for the cryptocurrency circle and the entire industry.
5. Bao cuts interest rates
The main purpose of the Fed's interest rate cut is to reduce borrowing costs and stimulate economic activity.
In recent years, factors such as inflationary pressure, global trade frictions and the COVID-19 pandemic have made the Federal Reserve more cautious in monetary policy, and interest rate cuts usually occur when economic growth slows or faces the risk of recession.
Historical data shows that Federal Reserve rate cuts typically help drive up Bitcoin prices.
The reason is simple. Interest rate cuts reduce the cost of capital, encouraging investors to invest their funds in high-risk, high-return assets such as Bitcoin.
Therefore, the positive factors of interest rate cuts for Bitcoin mainly include:
Stimulating investment: Investors tend to seek higher returns in a low-interest rate environment, driving up Bitcoin prices.
Improve market sentiment: The interest rate cut is aimed at stimulating economic growth and promoting economic recovery, which sends a positive policy signal from the Federal Reserve. It makes investors more willing to take risks and prompts more funds to flow into Bitcoin.
Pushing up Bitcoin's anti-inflation characteristics: interest rate cuts may lead to lower yields on traditional safe-haven assets, triggering higher inflation expectations, making Bitcoin's anti-inflation characteristics as digital gold more obvious.
Many investors may view Bitcoin as a hedge against inflation, driving up its demand and price.
Increase market liquidity: The loose monetary policy brought about by the interest rate cut has increased market liquidity, and investors are more
Easy access to the market drives Bitcoin prices higher.
Let’s take a look at the impact of interest rate cuts on Bitcoin in the last cycle
From December 2018 to July 2019, the price of BTC rose from US$3,000 to US$13,000.
The Federal Reserve began cutting interest rates in July 2019, and the market began to react to expectations of rate cuts in April 2019.
exist
From July 2019 to March 2020, despite the Federal Reserve's interest rate cuts, Bitcoin prices fell first and then rose.
After the rate cut, the price of Bitcoin fell from $13,000 to $7,000, a drop of more than 30%.
The price fluctuations during this phase reflected the different interpretations of the interest rate cuts by the market, showing that interest rate cuts do not always bring about an immediate positive market reaction.
In March 2020, affected by the COVID-19 pandemic, the Federal Reserve quickly cut interest rates and launched large-scale quantitative easing, with the market lagging slightly behind.
The main upward trend will come at the end of 2020 and the beginning of 2021.
In this cycle, the price of Bitcoin rose from US$3,000 to US$65,000.
During the interest rate hike cycle from March 2022 to July 2023, the price of Bitcoin fell from a low of US$45,000 to US$15,000, experiencing a decline lasting 9 months.
The performance at this stage shows that the market is more sensitive to interest rate hikes, and expectations of interest rate cuts did not emerge before prices recovered.
Therefore, based on historical data, the market reaction after a rate cut may be early or delayed, and in most cases it is beneficial for Bitcoin to rise.
It should be noted that in a few cases, the market may face selling pressure, resulting in a decline, which may show a decline before an increase.
Based on the above data, we can draw a conclusion that BTC’s current price is at a cheap discount stage relative to its long-term value, and is in the darkness before the dawn of the big cycle takeoff.
At the same time, you should know that the current BTC starting with 5 is the price after halving, which is equivalent to the BTC starting with 2 last year. If time goes back to 2023, BTC starting with 2 will ask you, do you want it?
Of course we are talking about cheap, but if you insist on asking whether this is the bottom or the cheapest?
I can only tell you objectively that Buffett doesn’t know, Soros doesn’t know, Satoshi Nakamoto doesn’t know, and Powell doesn’t know.
But we can be sure that the current price is a relative bottom area, and having such an answer is enough.
For bitcoin, now is not the time to defend, but rather the time to attack. Buy big when there is a big drop, buy small when there is a small drop, and don't move when it goes sideways.
There is no reason to let go at this point.
By the end of October at the latest, all the bullets used on cake will be used up at any price.
Just wait for the big bull market in 2025. For cyclical assets, time is more important than price.
