CryptoCurrency : The Market Cycle. Anyone who read/understood this pattern sold in January.
An interesting read…
**The Market Cycle Wears No Clothes**
*A Psychosocial Field Guide to Cryptocurrency’s Most Important Pattern*
Extracts from article:
**”What follows is the single most important thing I learned in 12 months of intense study.”**
* Since 2010, the lifecycle of financial bubbles has played double-duty as Bitcoin’s market cycle. It is our asset class’s calendar of emotional seasons, and it’s the cryptocurrency market’s Rosetta Stone.
* **Currently (at the time of writing) we’re near the end of Bitcoin’s 4th overall cycle, near the bottom of the bear market stage. (This article was published in August 2018).**
Bitcoin’s Market Cycle Stage 1: Accumulation
* **This stage lasts many months.**
* Everything is low. Low prices, low volume, low volatility, low expectations.
* The bottom may be in, but retail investors are traumatized and fear further losses.
Stage 2: Bull Market
* A widely-anticipated regulatory fundamental news event acts as catalyst to push price to levels unseen since the early days of the bear market.
* **In its first 100 days of price discovery, Bitcoin nearly doubles its old all-time-high.**
Stage 2, Part 2: Parabola
* Bitcoin’s price grows at a parabolic rate from this point forward. Retail FOMO becomes a global phenomenon.
* Retail buyers who sold in frustration after the last crash are now buying back in as price approaches its top.
* **The timeframe for this last parabolic wave of buying has been amazingly consistent cross-parabola. Historically, all four times** ***it’s lasted 5–7 weeks*****. (Put that in your back pocket).**
Stage 3: Smart Money Takes Profit
* Most retail investors think it’s a healthy correction and aren’t selling.
* **This period lasts roughly 6–8 weeks.**
Stage 4: Bear Market
* Retail investors who haven’t been through a full market cycle fail to take profit, and are rekt.
* The final drop happens suddenly, on high volume, triggering an impulse wave of stoplosses and panic selling. It appears as a long wick on the daily chart.
* Many retail investors have just sold the bottom.
The Fifth Parabola
“Picture a financial instrument: from its inception, it has done one specific thing, and done it cyclically, four times in eight years, at ever-increasing rates of scale. Do you think Bitcoin will stop doing the thing it’s done four times in a row? **The highest probability scenario is that the market cycle repeats itself a fifth time.** ”
…People understanding this can prepare for the next bull run, thing is we may need to drop another 20% before the bottom is in, that and most alt coins will not survive the next bull run 🙁
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