The counterfeit market has been in a long downturn in April, and many people have begun to wonder whether the bull market is over?
① How much increase is considered a bull market?
Everyone has their own understanding. Many people think that a bull market is when the big bitcoin market rises several times and the altcoin market rises dozens or hundreds of times. Let's learn from history and look at the two largest markets, the US stock market and the A-share market.
The U.S. stock market has a long bull trend, with most of the time rising + falling. The 1980s was also a period of great inflation in the United States. In 1980, the CPI was as high as 14%. Under Volcker's crazy interest rate hikes, it was not until 1985 that it was gradually brought back to the 2-3% range. The Nasdaq (more in line with the reference of the currency circle) rose 40 times from the low point in 1985 to the peak of the dot-com bubble in 2000, 40 times in 15 years; after the financial crisis in 2008, another long bull market started from 2009 to 2024, which was another 15 years. This time it was less than 16 times, 15 times in 15 years.
Looking at A-shares in the same way, there was a bull market in the early days when the market was immature, with an increase of 11 times. Later, after the changes to T+1 and price limits, the highest round was 6 times the 2008 stock reform bull market from 998 to 6124. There has been no obvious index bull market since the leveraged bull market in 2015.
The above are all statements of objective facts. The market is like a combination of US stocks + A-shares. It has obvious bull and bear cycles (technically there is a halving), and the price is in a bullish trend similar to the Nasdaq. The big pie benchmarks against the index, and the copycat benchmarks against individual stocks. As the volume increases, the increase per unit time must continue to decrease, which is in line with objective laws. The pie increased from 500 times in the first round, to 130 times in the second round, to 17 times in the third round. This round is currently 4.7 times, and the increase has also decreased significantly. From this, we can deduce that the low point of this round is 15558*17 (don’t be careful about rounding) = 264486 It is based on the fact that the increase in each round does not exceed the top limit area of the previous round. The current turn of the big pie is 6.4 times the bottom of 100,000. There are already many benchmarks for traditional markets, and the ratio to gold is also much higher. Now it has increased 4.7 times, with a maximum volume of 150,000 million, which is the pass line for bull market growth, just like an oversold rebound. , after the initial technical rebound range has the highest certainty, there will be more factors to consider when it rises again, and the process will be more tortuous.
② Has the copycat season arrived?
Based on the above law of diminishing returns, we must lower our expectations. Since the growth of Bitcoin is getting smaller and smaller, the same must be true for copycat coins, especially old coins. The coins that increased by a hundred times in the last round are struggling to increase by ten times in this round. Let’s review it first.
The reason why many people feel rich in 2021 is that a large number of coins listed on Binance have actually increased by hundreds of times in the bull market. For example, the impressive MAT, which I participated in, increased by 150 times in less than half a year from January to May 2021, and the trading volume was huge, and highs and lows could be bought and sold at will. The peak contract price was more than 15 billion per day, and the spot price was more than 1.5 billion. To make money, there must be liquidity to be called a big market. It is useless if there is an increase but you can't sell it. Doge also increased by 150 times from January to May 2021, and the peak transaction volume even exceeded that of Bitcoin. It is a truly epic secondary opportunity.
On the other hand, in this round of market, there are only a handful of well-known currencies that have increased by 10 times. Among the altcoins in Binance, from the start of Bitcoin at 26.5w in October last year to the peak, Avax has increased by 7 times, Sol by 9x, TIA by 10x, Pendle by 11x, Ordi by 29x, Pepe and Floki by 17x. Others have also quietly increased by more than 20 times, but their popularity and liquidity are not good. The strong man Ordi has only increased by about 30 times in half a year, which is far lower than the previous round of doge, horseshoe and other real second-level hundred-fold coins. A large number of altcoins have not even increased as much as Bitcoin (2.7 times). This is also the main reason why everyone feels that the altcoin season is not strong. It really didn't increase much.
So if the definition of the copycat season is a general increase of several times and a leading stock increase of dozens of times, then following the big cake since October last year can be considered as having happened, and it cannot be said that there has been no increase; if the definition is a general increase of dozens of times and a leading stock increase of hundreds of times, then there is indeed no increase now.
③Why can’t the increase be higher than the previous round?
The above content explains that the old coins in this round are not hot coins. Most of them cannot rise as high as the big coins and fall as low as the big coins. They are really garbage. We come to the market to make money. There are reasons why the market is not doing well. Let's make a simple analysis.
1. The initial market value is too large. In the last round of Matic in January 2021, the fdv was only 145 million dollars. It was fdv, not mc! In this round, as long as it is listed on Binance, 10% of the new coins in circulation are not 200 to 300 million mc. The corresponding fdv has opened at 200 to 300 million dollars, and there are even tens of billions of fdv. If it rises 10 times, it will be 100 billion fdv. There are only a handful of A-share companies with a market value of 100 billion US dollars. Are these projects more powerful than Gree, Midea, BYD and CATL? If it rises, mc says it is small, and if it falls, fdv says it is large. The market sentiment is so magical. Now that everyone has calmed down, they have found that Binance’s new coins are too expensive and can’t be taken over at all. The old coin mc is not low because of its high circulation rate. Expensiveness is the most fundamental reason why it can’t rise!
2. On-chain and small exchanges eat up the gains. This round of money-making effect is concentrated in the sol ecosystem. Bonk, wif, bome and other memes have increased by dozens or hundreds of times before listing on Binance, but there are thresholds for on-chain operations, and a large number of people cannot participate. If they miss the gains of the fish body, they can only gamble on the tail range. Similarly, many of them have increased by 10 to 20 times on OK Gate MX before listing on Binance, such as metis, tao, ronin, etc., with limited liquidity and difficult to buy and sell in the past, and they have reached a stage peak when they get the liquidity on Binance.
3. There is no money in the macro economy. In 2020, the US government has carried out an unprecedented large-scale money release due to the epidemic. The helicopters have dropped money so that ordinary people can enter the market with cash to gamble. Anyway, it comes with the wind. A gamble will turn a motorcycle into a Land Rover. Low interest rates also make the cost of capital participation very low. In addition, Grayscale and Musk have promoted and popularized consensus. The right time, right place and right people are all in place. On the other hand, the current interest rate cut will be as early as the third quarter or even next year. The rebound of CPI will make ordinary people have less money to invest. Jobs have to be competed with illegal immigrants. Daily consumption is not enough for investment. Everyone knows the economic situation in China. Retail investors in China and the United States have no money. The biggest boosters of this round of ETFs, including BlackRock, are long bull pushers, not crazy bull pushers. They only buy big cakes. Even if the ETF of ETH Sol is passed, there are only these three, and it has nothing to do with other cottages. The funds entering the ETF market do not have XXX/BTC trading pairs to buy cottages. If it rises by dozens or hundreds of times, someone must buy it with real money. It cannot be achieved by dreaming. FDV is expensive and everyone has no money. It is worse than the previous round. It is reasonable.
④What are my expectations? How should I deal with such market conditions?
(Personal opinion, only by listening to both sides can one be enlightened) We cannot say that others made dozens of times the money by buying big bitcoins in 2016/2017, and made dozens of times the money by buying copycats in 2020/21, but missed it. In 2023/24, they entered the market without research and followed the trend, bought a set and held on to it to make dozens of times more money. This is too difficult. As the scale becomes larger, the opportunities will inevitably become fewer and fewer. These words may burst the dreams of many people to get rich in the cryptocurrency circle. There is no way, brothers, everything follows objective laws, this is the way of heaven.
1. If the interest rate cut is delayed until the end of this year or next year, there is still more than half a year left. Coupled with the uncertainty brought to the U.S. stock market by the election, the main force of the copycat may realize his high-multiple returns in the form of waves, that is, a large-scale upward shock, repeated doubling and falling by 40% or even rising 3 times and falling 50%. If you hold on to it, the return will be similar to buying big cakes, but the main force has already made a lot of extra money, using wave operation to save the country. The countermeasure is to give up the pattern when the signal that the sentiment has peaked is obvious, buy back in batches at the freezing point of the sentiment and follow the main force to realize excess returns.
2. Lower your expectations. Even if you invest hundreds of thousands of yuan in the market and make four or five times the profit in two years, it is not a small amount, which is more than most office workers. There are not many people who make 100wu in the currency circle and cash it out. Don't be spread with anxiety by kols and group friends. There are many people who make 10 times the profit in a month, but few who make 10 times the profit in a year. Speculation is a lifelong career. If you can maintain the result in one bull market, you can cross a class in the next round of compound interest. If you always want to make a big profit in one go, it is easy to miss the good selling points due to the large pattern. If you make a wrong rhythm, you will make mistakes at every step.
3. It is time to learn. Opportunities are becoming fewer and competition is fierce. WB2 is coming. If you want to make money, you must have a skill, technical analysis, fundamentals, on-chain, haircuts, etc. You have to master one of them, and the profits are constantly moving forward. Operations on the chain are more important. A hundred-fold coin may increase by 25 times on the chain, and 4 times after being listed on Binance. It is of course difficult to run to the tail of the fish and fight with the gods instead of playing in the front. It is imperative to improve your position to make money.
4. You can start a business, find a job in the industry, or if possible, do a job selling shovels. No one stipulates that you can only make money by speculating in cryptocurrencies. You can get a salary from working without interfering with your speculation, and you can also get more sources of information. It's the best of both worlds.
⑤What do you think of the recent market conditions?
The Shanzhai can no longer fall. When the big pie finds the bottom, many coins can move independently after some emotional grinding, such as AI, MEME, and SOL. In addition, Binance's new coins are high-emotion products, and both the rise and fall are excessive. Now that the market sentiment is bad, don't ignore it just because others are fud. All markets are the same whether they speculate on new or old, especially the first issue. At least you have the same chip cost as other retail investors, unlike many of those who have been listed on small exchanges, where others have made many times the profit and are waiting for you to sell to stop the profit.
