If you're gonna survive in this space and stick around, you better understand market cycles. These fuckers are the heartbeat of the crypto world, and they'll make you or break you.
Market cycles are the natural rhythm of price movements in any financial market. It's like the tide - it comes in, it goes out, and if you're not paying attention, you'll drown in losses.
Why should you give a shit about market cycles? Because they're your roadmap to not getting rekt. Understanding these cycles can help you time your entries and exits, manage your risk, and most importantly, keep your sanity in this volatile-as-fuck market.
Crypto cycles are like traditional market cycles on steroids. They're faster, more volatile, and can make you a millionaire or a broke ass in the blink of an eye. While traditional markets might take a decade to complete a cycle even remotely comparable to crypto, crypto can do a FULL parabolic bull market every few years
Remember: Crypto doesn't give a fuck about your feelings. The market will do what it does, regardless of your hopes and dreams. Stay objective, stay rational.
At its core, market cycles are driven by human psychology and basic economics. Fear and greed are the two emotions that rule this game. When greed takes over, prices skyrocket. When fear sets in, it's like a fucking avalanche.
Crypto markets are all about supply and demand, but with a twist. Limited supply (like Bitcoin's 21 million cap) meets potentially unlimited demand. Add in factors like halvings, token burns, and staking, and you've got a recipe for some wild price action. Don't forget whales fucking around as well.
Here ar some tools people consider important timing cycles and everything in-between:
Pro tip: Don't rely on just one indicator. Use a combination to get a clearer picture. And for fuck's sake, don't forget to zoom out and look at the bigger picture.Cycles are about the BIGGEST picture there is and has been insanely predictable thus far since crypto was born.
Alright, pay attention. This is where the rubber meets the road. There are four main phases in a market cycle, and each one can make you rich or poor depending on how you play it.
This is where smart money starts loading up. The market's been beaten down, weak hands have sold, and prices are stabilizing. Ideally, you try to get in here but most people don't have the technical skill to do so, that's where I come in.
Most retail investors are licking their wounds or have given up entirely. This is when you hear shit like "crypto is dead" or "Bitcoin is going to zero". Meanwhile, smart money is quietly accumulating. I was going balls deep here whilst most people thought I was throwing my life away.
This is where the fun begins. Prices start trending upwards, and FOMO kicks in.
Look for a series of higher highs and higher lows. Volume should be increasing, and you'll start seeing more positive news and sentiment. This is still just the start though.
FOMO is a powerful drug. As prices rise, more people jump in, driving prices even higher. This is when your Uber driver starts giving you crypto tips. Be careful - when everyone's bullish, the smart money might be preparing to sell.
The party's peaking, but smart money is heading for the exits.
While retail is buying the top, smart money is slowly distributing their holdings. They're taking profits while telling you to "HODL". You'll often notice INSANE volume but somehow a coin isn't pumping like before, this is because smart people are selling the pumps.
The hangover after the party. Prices start trending down, and fear takes over.
Capitulation is when the last of the "strong hands" give up and sell. It's often marked by a sharp drop in price and very high volume. This can signal the bottom, but be careful - there can be multiple "capitulation" events in a bear market. Do not try to 'buy the bottom' for a while, it usually takes a really long time. Each time you think you bought the bottom, there will be another that absolutely melts your face. It takes extreme skill, experience and expertise to time bottoms so don't try to if it's out of you range.
Remember: Bear markets make you rich, bull markets make you money. Use bear markets to accumulate and learn, so you're ready when the bull returns. ALL seeds are planted in a bear market
Bitcoin halving is when the block reward for mining new Bitcoin gets cut in half. It happens roughly every four years. This shit is important because it directly affects the supply of new Bitcoin entering the market.
Historically, halvings have preceded bull runs. The reduced supply meets increasing demand, often leading to price increases. Reason why it always led to a massive bull is because people believe in it so hard, they bring it to life. Plus whales use this opportunity to milk retail traders and investors, more on the manipulation part later.
Some predict diminishing effects as the market matures. Others think institutional adoption might amplify the impact. The truth? Nobody fucking knows for sure. Stay prepared for any scenario. I think this will be the final HARD hitting bull market and then it will behave more like stocks afterwards.
Pro tip: Don't base your entire strategy on halvings. They're just one factor in a complex market. Combine this knowledge with other analysis for a more robust approach.
"Altcoin season" is when altcoins outperform Bitcoin. It often happens after Bitcoin has had a strong run and investors start looking for higher returns in riskier assets.
Most altcoins are still highly correlated with Bitcoin. When BTC pumps, alts usually follow. When BTC dumps, alts often dump harder. But there are exceptions, especially for alts with strong fundamentals or hype. After btc pumps, altcoins tend to have their own 'super cycle'.
Look for these signs:
Warning: Altcoin cycles can be even more volatile than Bitcoin. Don't be an idiot - manage your risk and don't FOMO into every shitcoin that's pumping. Be very sure about what you buy.
Understanding market cycles won't make you a crypto god, but it'll give you a fighting chance in this crazy market. Remember, the goal isn't to time the market perfectly -The goal is to make informed decisions based on where we might be in the cycle.
Stay vigilant, manage your risk, and for fuck's sake, don't invest more than you can afford to lose. This market can be a cruel bitch, but it can also change your life if you play it smart.
Now go forth and conquer, you beautiful degens.