Understand this and you will outperform 95% of other investors: The Cryptocurrency 4-Year Cycle!
What is the 4-year cycle for cryptocurrencies? What is the content of each stage? When to buy and when to sell?
a thread
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A complete cycle is completed every approximately 4 years. Why does this happen every four years? Why so fast?
• Reason 1: Bitcoin Halving. A supply shock occurs and triggers a price increase
• Reason 2: Cryptocurrency is a young market
• Reason 3: Mass psychological effect
Year 1 (blue box): accumulation year
• Bear market low has arrived
• Markets recovered slightly and stabilized
• Usually some kind of lateral movement
• Lower interest in cryptocurrencies
Year 2 (green box): Before the bull market
• $BTC halving year
• Prices are approaching previous all-time highs
• Interest in cryptocurrencies begins to slowly rise
Year Three (Orange Box): Bull Market
• Parabolic stage
• Prices rise exponentially
• Interest in cryptocurrencies is high and everyone wants to join
Year 4 (red box): Bear market
• Prijs fell sharply
• Bitcoin price historically drops 75% or more
• Loss of interest. Retail investors panic sell and flee
evolution:
• Price increases become smaller
• Price declines become smaller
-> Signals of asset class maturity
Cycle 1 (half cycle):
• 100,000% increase from bottom
• 94% decline from top to new bottom
Cycle 2:
• 58,000% growth
• 86% reduction
Cycle 3:
• 12,500% increase
• 83% reduction
Cycle 4:
• 2000% increase
• 78% reduction
Cycle 5:?
When to buy?
The accumulation phase is the easiest to identify. The bottom has clearly arrived, prices are chilling and panic is gone. Create an entry plan to start scaling with a buy now or DCA strategy. Don't try to catch a falling knife during a bear market.
When will it be sold?
During the parabolic phase, you can start scaling the market. Create an exit plan and gradually scale up. Plan based on Bitcoin goals, largest altcoins, and time-based goals (as a hedge). I will make a thread and video about this later.
Human psychology is a science. It hasn't changed. Many of you reading this will still be caught up in the greed and fear of the bull market years. Market cycles are nothing more than human psychology visualized in charts. This won't change. Take advantage of this knowledge.
