No one talks about the "eternal bull market" anymore

(Picture from the Internet)

May I ask what the market was like when Bitcoin was $60,000 in March? Looking back from today, many people would definitely say it was a bull market. So what is the market like when Bitcoin is $33,000 today? There are differences on this question. Some say it is a correction in the bull market, while others say it is on the way to a bear market. It has always been like this. Looking back at the past, everyone is as good as Zhuge Kongming, but looking forward to the future, how many people can make accurate predictions? It can be seen that it is difficult to predict the future, and past experience is not enough to learn from. Liu Jiaolian’s WeChat account wrote on March 18, "It is not enough to talk about bull and bear markets without talking about the length of the cycle" [link], which recorded that Bitcoin once stood at $60,000, and a theory called "eternal bull market theory" was popular in the market at that time. "That is to say, after this round of bull market, there will no longer be a long bear market that has not seen the previous high for three years after the huge drop like the past three bull-bear transitions, but will continue to interpret the rhythm of the bull market wave after wave." The article continued, "I say no (there will be an eternal bull market)," and pointed out that "if the current bull market reaches the top of 150,000-200,000 dollars (breaking the RMB 1 million mark), a correction to 50,000-60,000 dollars, a sharp drop of 60-70%, is enough to announce the end of this bull market and the beginning of the next bear market."

Before the "real" end of this round of bull market in 2022, the sharp decline of about 70% began on May 19, just two months after the March 18 article. Overnight, Bitcoin was shorted to 29,000. On June 22, it hit a new low, pushing it to 28,800. Relative to the ATH of 64,800, the maximum limit of decline has reached 55.55%. 5555, "woo woo woo", is exactly a homophonic pun. Is this the sobbing of the relocated miners, the bulls who were beaten, and the leeks who suffered losses? Is this homophonic pun a mockery of the leeks by the dealers behind the scenes? However, if we look at the actual market, the stable top is only at 58-60. According to the 5/10 article "There is still a big crash before the second half" [link], "a 40% level retracement", the bottom is set at 34-36. So the current price, ignoring the unstable instant bottoming (see the weekly chart), can be considered to be in a reasonable low-altitude flight and slightly oversold situation. But such a simple mid-term correction has already made many "believers" who bought at $60,000 lose their faith, and the "brave" who rushed into the market at $60,000 and sent their heads thousands of miles away are scared. A very interesting phenomenon is that I haven't heard anyone talk about the "eternal bull market" in the past month.

At this time, I will talk about this "eternal bull market". I vaguely remember that there were two main arguments for the eternal bull market: First, the inflation rate of Bitcoin has been lower than that of the US dollar since the halving in May 2020. Second, this round of bull market is different from the past. In the past, it was retail investors who rushed in and scattered. This time, it was Wall Street institutions that entered the market, which are professional, stable and long-term. Don't believe it? If you don't believe it, I'll show you the 10-year bull market of the US stock market (led by institutions) VS the A-share market (dominated by retail investors) is still 3,000 points.

When discussing these two points, "belief" overwhelmed reason, and nothing could be discussed. Now that the market has poured cold water on us, maybe we can think about it calmly. First, regarding the first point. After the Bitcoin production was halved last year, the single block reward was halved to 6.25 BTC, so the annual reward is 6.25*6*24*365 = 328,500 BTC. The current stock of Bitcoin is about 18.7 million, so we can calculate that the annual inflation rate is about 32.85/1870 = 1.76%. Some people are very smart and immediately recalled that the Federal Reserve said that the US dollar monetary policy is to ensure that the long-term US inflation rate tracks the target value of 2%.

Do you see the problem? As mentioned above, the inflation rate of Bitcoin and the long-term inflation rate of the United States are not the same concept at all. The inflation rate of Bitcoin follows the original meaning of the word inflation, while the long-term inflation rate of the United States uses today's mainstream but tampered semantics. Regarding this point, Liu Jiaolian's official account has elaborated on this in many articles such as "Leaky Boat Carrying Wine in the Middle of the River" on June 23, "Inflation and Prices" on June 13, "Inflation is Not Out of Control, the Fed Will Not Raise Interest Rates" on June 17, and "Powell Assists" on June 23.

Isn't it funny to compare swimming between a hen that lays eggs and a monkey that climbs trees?

Let's talk about the second point. Are institutions smarter and more professional than retail investors? Smart and professional seem to be contradictory. Because, obviously, if they are smart enough, they should have anticipated the mid-term correction and chose to escape the top. Pull out the list of institutions whose holding costs are more than 50,000 or 55,000. How to explain their intelligence? If they escape the top and become the force to smash the market, they are obviously not professional enough, that is, steady long-termism, long-term holding of coins, not afraid of ups and downs, can support the eternal bull market. They held the coins, but obviously did not support them, but were trapped.

It will rain, a mother will marry, and Bitcoin will fall in the middle of the day. It is the way of heaven, the way of man, and the way of machines. These are all things that human power cannot resist. Retail investors cannot do it, and institutions cannot do it either. In front of Bitcoin, everyone is equal, and institutions are no exception. Bitcoin has no authority and no coercion. Bitcoin is game theory. In front of game theory, everyone is equal, and institutions are no exception. Some institutions choose professionalism (locking in), and some institutions choose to be smart (dumping the market). This is the free market, the spirit of Bitcoin, permissionless, no permission is required, anyone can participate freely, come and go freely. In a super-free financial environment, institutions are not all docile sheep. Are the current round of institutional entry here to carry the sedan chair for us retail investors and do charity? Haven't you seen that the proportion of retail investors in A-shares, which are complained to be too much regulated, is very high, while the more free and open US stocks are dominated by institutions? If retail investors can make money by themselves, why do they need institutions to do it for them? If retail investors do it themselves, who will the institutions earn service fees from? Only by beating up, cutting off, and killing off retail investors, making them tremble with fear and afraid to enter the market on their own, can they obediently hand over their money to institutions to manage, and bear their own profits and losses, allowing institutions to make money without doing anything. This is the true face of the Wolf of Wall Street.

The cryptocurrency market can only be a freer, more open, and less regulated market than the U.S. stock market. Here, the dealers can spread rumors and create panic, leverage the cover of external news, concentrate chips and funds, manipulate price trends, draw any charts that can deceive the eyes of the leeks, fight fiercely, and cut the leeks ruthlessly. Looking at the recent fierce battles and plunges, how could the mob of retail investors concentrate on making operations in the same direction in 1 or 2 hours, and accurately hit a certain price to complete the liquidation harvest? It can be said that it was done by institutions, dealers, and big funds.

How can retail investors fight back? Here are the eight tips. You can’t harvest the leeks lying flat, but you can grab cheap chips during the violent sell-off by short sellers. When the snipe and the clam fight, the fisherman gains. Let the short sellers work for you for free and give you discounts, isn’t that good?

However, there is no "eternal bull market". This is the biggest message and the most valuable conclusion brought to us by the successful mid-term plunge and correction.