How To Be SUCCESSFUL In Crypto! Following The Market Cycles
The Secret Sauce Of Crypto Revealed
I’ve been doing it wrong for five years, not trusting the process and thinking something can change any time, and cryptocurrencies will achieve global adoption immediately.
I finally realized the market was always like that. Highly speculative, with limited fundamentals.
Human emotions in a speculative cycle eventually trapping most investors right at the top, where the early investors are selling. Marketing and narratives serve to provide exit liquidity for the early investors.
There are plenty of traders out there, selling charts and trading courses that will also discuss the Bitcoin cycles. If you want to succeed, unsubscribe from these “trading” channels, they only produce noise.
Crypto differs from stocks. There are no balance sheets and no accounting to present a realistic position, only predetermined cycles.
The Secret Sauce
My mistake was trying hard nonstop. Bear or Bull, I kept going daily with research, investments.
Those that stay back in the bear market are the developers and the businesses. Everyone else goes for vacations waiting for the next time.
Nobody tries their best during the bear market.
It is the time to relax, have vacations on a beautiful island, enjoying profits when holders are in denial and despair. If the profits are not enough for two years, then probably we all did something wrong.
And that bear came in May 2021 this time. Not in November, as some suggest with BTC at the latest ATH. The volumes in November were too low, as the bull run suffered a severe blow this May with the China ban on miners and Musk’s U-turn on PoW.
Here is the formula, right from the beginning, so you won’t have to scroll down further:
Join a few months (or a year) before the next BTC halving
Diversify into many cryptocurrencies and “hodl”
Start selling in steps (after you 10x your initial investment)
Relax for a year or so
Just like that, we profit from the repeated cryptocurrency boom and bust cycles.
The same will be all over again in 2025. I know you have reservations.
Maybe some readers will find the above image to be silly, although, it is this market that is all a giant clown with unregulated and unsupervised exchanges, unbacked stablecoins, and thousands of influencers shilling their bags.
Treat this market with more respect than it deserves, then you suffer.
If it was easy for me to profit from Crypto, then it is easy for everyone.
How did it go for me? My mistake was to skip vacations.
When in a euphoric state, press that “dump” button.
Take lengthy vacations, visit the world and look at the prices and news occasionally, but don’t consume most of your time with crypto in the bear market.
Recharge your batteries because you will burn out. Make it worthwhile.
This market is programmed to operate like this, following algorithms combining multiple elements like human psychology, fear and greed, the halving, and a vast marketing network.
Some take vacations, others focus on the stock market, and some build new businesses during a bear market.
Don’t Listen To Naysayers: Crypto Is Not Going To Die!
(99Bitcoins: Bitcoin Obituaries)
Cryptocurrencies are not going to die.
Some with fundamentals always stay, with developers building useful services on top of them, although many will disappear.
The 2013 Bull Market
What happens is names that change. Those cryptocurrencies that trend and reach the top.
From the current top-10, excluding stablecoins, we find lots of new projects that only started trading the last few years, and many of them are not even ready yet but are still under development of their mainnet.
Let us examine the conditions in the crypto market during the three peaks we have witnessed so far:
In January 2014, Bitcoin, Litecoin, and Ripple (XRP) are the three we still have today, although LTC and Ripple are at way lower positions in the index.
Any investor that joined in 2020–2022 has never heard of the rest.
Peercoin, Omni, Next, Namecoin, Bitshares PTS, Quark, Megacoin.
WHAT ARE THOSE?
Forgotten coins with limited progress.
We are not here for academic knowledge but to focus on how to make money (even if this is fiat money). I’ve written countless articles about fundamentals, yet this one is different. This article is about the main reason everyone joins crypto, no matter if we tell ourselves otherwise.
Are any of these cryptocurrencies around today, and why they are nowhere to be found?
The market decides to support projects the retail investors are more likely to buy. So, they present new projects because what is “new” sells easier.
Fast Forward to January 2018
The second Bitcoin (BTC) halving in July 2016 led the market into a frenzy. Bitcoin went mainstream with financial channels (Bloomberg, CNBC) announcing its return at the beginning of 2017, rallying the “troops” in an investing frenzy that lasted until the end of the year.
By January 2018, Bitcoin had experienced a full two-year bull cycle leading to 100x returns (from $200 up to $20,000).
The rest cryptocurrencies, those that some analysts call altcoins, were even more profitable, with some achieving 1000x or higher returns.
Always remember that we can’t catch the exact bottom and can’t sell at the exact top. What we expect is a 10x and begin selling there.
Throughout 2017 we found multiple cryptocurrencies changing positions in the top 10, yet many significantly lost their market position and importance in 2021. While XRP, Ethereum, and Litecoin were still there, newcomers on the list were now Bitcoin Cash, Cardano, NEM, Tron, Stellar, and IOTA.
However, some of these networks lost their vast importance throughout the following cycle that followed the third Bitcoin (BTC) halving.
Where are NEM and IOTA today? They were presented as quality cryptocurrencies with long-term potential, yet they are nowhere to be found today.
The 2020- 2021 Bull Run (Two Peaks)
Bitcoin didn’t perform according to everyone’s ambitions ($100k and higher) during 2021, and this year (2022), we watch the price retract below the previous ATH ($20,000).
Interestest is growing for cryptocurrency, but there is an issue that probably produced reduced returns for 2021.
The Last Bull Run (2021) — Peak A
Besides Ethereum and Dogecoin, the rest of the “old” coins lagged and did not reach new ATH. The price of Doge experienced unrealistic growth based on low liquidity in the exchanges and the high demand that Musk’s Tweets alone produced.
BNB and Polkadot were the latest entries.
We also find at the top places Bitcoin Cash, XRP, Litecoin, Cardano, and Dogecoin.
Currently, many of these cryptocurrencies are down at a 90% rate since their ATH. However, the overall market is not yet there, hinting us at lower prices.
Nonetheless, these levels are where investors that understand potential should begin exploring fundamentals, potential, communities, and professionalism.
XRP, Bitcoin Cash, and Litecoin did not reach their previous ATH. Litecoin was closer and produced a very similar pattern. However, Cardano exploded once again in new ATH, and it didn’t even need a network all this time.
The bull run for BTC, Ethereum, and the ETH clones had a second run last summer.
Peak B
A secondary ATH reached for BTC, so according to the chart we can’t place the end of the bull run in May 2021, no matter how much the market changed and the prices of many coins dropped.
Solana and USDC were the new entries. The Ethereum clones were constantly rising and attracting most of the funding but their failures were massive. I expect cryptocurrencies with payment properties, low fees, and low transaction times (Bitcoin Cash, XRP) to lead the new crypto race instead of Ethereum or Ethereum clones.
Remarkably, Tether had also minted another 25 billion tokens since May 2021, raising more suspicions about the implications on the price of selected assets.
It’s not even about a network sometimes, but just the promise of developing one, since marketing alone can create a top-10 cryptocurrency. Cardano is still not ready yet, even though it has been developing a network for five years. Yet, it is always there at the top-10 with an extreme and unrealistic valuation.
The truth is that investors don’t use cryptocurrencies outside of custodial services and exchanges. Maybe people will start using crypto massively one day, but adoption lags, and only a few crypto communities care anymore.
Dogecoin is another example that clearly explains this market is programmed to pump coins for one or two years when the crash will begin.
Musk never stopped supporting Dogecoin, yet it is already down 90% from ATH.
A Market Programmed To “Pump and Dump”
(Image by “TheDigitalArtist”, on Pixabay)
No, it wasn’t the EU or the SEC that crashed the market. It wasn’t the banks either. They may think they did, but it wasn’t them.
All these institutions were against cryptocurrencies and never changed their rhetoric. They sustain warnings and negative sentiment throughout the bull run until (finally) they will get it right and feel vindicated about warning everyone right at the top!
The EU lately even called for action in a secret meeting, claiming it should negatively affect the price of cryptocurrencies to reduce PoW energy consumption.
Yes, this was an actual conversation between EU officials. It wasn’t the new EU rules or the threats to punish the price of cryptocurrencies that made prices drop.
It wasn’t the inflation or the war in Ukraine, energy prices, commodities, or the USD price compared to the Euro.
Cryptocurrencies are not a hedge to anything when investors only consider the price. Volatility is programmed. The money entering will increase together with the prices until everything reaches a critical point after a parabolic increase, rinse repeat.
It was the programmed bust cycle we had already entered that dropped prices.
Marketing is fine, but it is not just marketing that will help.
When new money enters the field, entities operating in exchanges generate high volumes (wash trading), pushing prices into a parabolic cycle. New money entering and bots buying (with no money at all) generate artificial high prices. These new price levels will have a chance to sustain when projects back them with a solid product (network).
Hundreds of projects disappeared while the market considered them (for a while) quality blockchains with strong potential and dynamics.
It is unreasonable to believe the price will sustain at extreme valuations for too long. Eventually, everything will collapse when the bust cycle begins. The bust cycle (bear) washes away most of the vaporware and brings to light the vulnerabilities they contain.
I have tried and shared in the past theories on why everything collapses together and how BTC (when prices drop) increases its dominant position. It doesn’t matter why this happens, but what matters is that it still happens.
Cryptocurrencies will rise more than Bitcoin during the bull run and offer better returns, although when the cycle reaches its peak, they will have a higher risk when dropping.
It is a de facto rule (at least for the time being) of the programmed cryptocurrency matter. It could change if another cryptocurrency overthrows Bitcoin from its market-leading position.
Whatever happens, BTC or ETH at the top, the market will start rising again.
Previous bear and bull runs :
2014–2015 Bear: 630 days (from ATH to bottom)
2015–2017 Bull: 847 days (from bottom to new ATH)
2018 Bear: 360 days
2019–2021 Bull: 1066 days
Current Bear: 235 days
It is too early right now. The bear market still has months before it is over, but this is not the point.
It is a decent time to enter crypto today since quite possible the bottom is a few months away.
Numbers indicate that bear markets last less, but perhaps the 2018 bear market should have gone deeper and maybe last another year.
2018 was awful, but 2014–2015 was even worse for BTC investors. The last bull market certainly didn’t last a thousand days, although the market started recovering at the beginning of 2019.
Something happened that helped the price of many cryptocurrencies recover, perhaps earlier than expected.
In 2019 a Ponzi scheme in SE Asia, called Plus Token, attracted hundreds of thousands of investors, with the money entering BTC, Ethereum, XRP, and other cryptocurrencies. The Plus Token Ponzi ended the 2018 bear market.
Eventually, the Plus Token Ponzi collapsed in August 2019, and prices turned bearish again (temporarily).
Everyone was expecting the third halving in May 2020. So, 2020 was the year that would revive the market and create new bullish conditions. New products and marketing terms were ready, and NFTs and DeFi dominated while hundreds of Ethereum clones started taking off.
Many mistakenly believed the bull market would continue until the end of 2021. It was already prolonged though, by many months after the May 2021 crash. The continuation of the bull run didn’t affect most cryptocurrencies but only BTC and the EVM networks.
The Programmed Boom and Bust Cycles of Cryptocurrency
Even if eight billion people read this article, 99% will make the same mistakes as everyone else did so far. I can’t give precise dates or find the bottom, and nobody can. Signs can be misleading.
The cycles in cryptocurrency are not occurring naturally, but they are programmed.
And it is not the halving alone that is programmed in Bitcoin’s code to cut the new supply by half every 210,000 blocks. The whole market is programmed to behave bullishly right after each Bitcoin halving for one or two years.
It is not the Bitcoin halvings that create terms for a parabolic trajectory but a vast network of algorithms operating to boost the boom and bust cycles extensively.
Speculation attracts more capital exploiting human weaknesses. It is all characterized as a Ponzi or a Pyramid because this is exactly how the price action of cryptocurrencies operates.
The programmed timing of the market decides when it will all be over. The final warning will be a serious dip, that will not find enough buyers. Prices can keep rising at higher levels than anyone expects, yet, the time the market will turn bearish is always predetermined.
When to Buy and when to Sell
The euphoric state where everyone dreams unprecedented wealth but those that know better are already selling and finding exit liquidity at the backs of the rest, crashing these futile dreams.
Some try to rationalize it with charts, but it is not easy to predict the exact top or bottom. Time alone is the indicator for this market. More or less, two years of bull and another two years of a bear. Take a break and come back later.
The importance of when to buy is equal to when to sell.
It doesn’t matter what you will buy unless it is a dead project or one completely lacking fundamentals.
Next Cycle Will Pump Payment Coins
In a sense, it is all rigged, but with incredible odds of profiting.
Any decent network that is not abandoned but working flawlessly and has a decent community will make it.
The funds joining will decide what to pump. We won’t have a clear view but only hints.
What To Expect From The Coming Bull Run (2023–2025)
What I expect is payment tokens to rise again into the top-10.
Litecoin, Bitcoin Cash, Monero, XRP, XLM, Nano, ZCash.
Everything that has to do with low fees, fast or instant transactions will be on the top.
CBDCs are coming, and many will begin looking into investing alternatives. What matters most is what will be trending. Successful investors predict the trends, not follow them.
The fundamentals of cryptocurrencies will shine in 2025.
Remember this, no Ethereum, no smart contracts, but robust P2P networks will take the lead. Those that successfully operate for years pushing for adoption as money.
It is time to make your bets, as all of the afforementioned will be in new ATH in 2025. Does it matter if you buy Litecoin at $50 or $10 if it is going to $500?
Does it matter waiting to buy Bitcoin Cash at $80 when it is already $100, and its potential is a hundred times higher? Would you wait to buy XRP at $0.10 when $10 is highly possible?
Not everything will pump but only networks that operate in a robust, decentralized, and efficient approach.
The market is programmed to react, and it will begin in 2023.
Although, don’t expect 2023 to be the year of the bull run. 2024 is our focus a few months after the fourth Bitcoin (BTC) halving.
Moreover, networks operating under similar terms to Bitcoin (BTC) with a halving every 210,000 blocks (or roughly every four years) will also have their halvings in 2024. Bitcoin Cash and Litecoin have their fourth halvings in 2024.
The predictable market (currently) treats them the same, and their price follows a similar pattern. Litecoin followed in 2021 the Bitcoin Cash pattern with complete correlation, even though it produced nothing to justify this.
This fact alone proves the vast manipulation in this market and how algorithms are forced buying and sell assets:
(Read more about algorithmic manipulation of the crypto market here)
This market is impressive. I haven’t discovered such talent and intelligence in any other field. It takes a while for an unaware trader to realize this market is programmed to the last detail.
It seems like there is an invisible hand moving prices with such volatility, although this is not the hand of a free market. It is a programmed market to rise for approximately two years and drop for another two, following the Bitcoin halvings.
In Conclusion
(Photo by “sergeitokmakov” on Pixabay)
In six to twelve months, we will be in a better position to realize where this market is heading.
The crypto cycles begin with the BTC halving, a line of code that reduces the miners’ rewards but further encompasses a system that comprehensively utilizes and boosts sentiment by a factor of a hundredfold.
Out of a few thousand new projects in each cycle, about fifty or a hundred will achieve widespread brand recognition and be relevant for a while.
During a bear market, prices will collapse no matter the effort made, and the whole market moves in the same direction with no coin escaping this.
When the market cycle is bearish, fundamentals or marketing do not matter. Nothing will change this market from dumping prices to 80–99% lower.
It is how the market is programmed to operate, and nothing will change it.
When the market turns bullish, anything can happen, and we should do our best to predict.
Since CBDCs will be hot in the following years, I expect the market to boost blockchains based on payment factors above other networks and platforms.
For the time being, we still have (perhaps) up to six more months before discovering the bottom. Six months is an approximation since the bear market can last up to another year and a few more months.
Those that sold close to the top in May or November 2021, have started buying again, though.
Cover Image by “xresch” on Pixabay (modified)
Notes:
Thanks to @MarcDeMesel for the $200 tip on my CoinFLEX article. I explained the situation the best I could without taking sides, yet it was far too many that didn't like this approach and made it clear. I value Marc De Mesel above anyone and I am definitely glad he liked what he read in that article.
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Originally published at Medium
An impressive analysis and datas of BTC that might be a hook of Bitcoin Cash too. Mind-opening.