Jiang Zhuoer: This round of bull market is now at the beginning of 2017, the last round

Original title: Where are we in the bull market cycle now? The upcoming surge in mainstream coins

1. The starting point in the figure is the lowest point before each round of bull market, and the end point is the highest point. So far, the "increase/time" of this round of bull market (purple line) and the previous round (green line) are basically the same, which is currently equivalent to January 2, 2017 of the previous round .

2. If it is completely synchronized with the previous cycle, this bull market will peak on December 20, 2021 .

3. However, the larger the volume of Bitcoin, the lower its volatility and the slower its rise. If it rises slowly, it is less likely to trigger the event of "the 60-day increase is too large, new funds cannot keep up, and the high-level collapse occurs", and the bull market will last longer . Therefore, the bull market in the first three cycles lasted longer and longer, and the increase multiples became smaller and smaller.

If we assume that the time of each cycle increases and the added value decreases linearly, this bull market will last for 1,288 days and peak on June 23, 2022 .

4. Note that the above is not inductive reasoning (the first three times were all xxx, so the fourth time will also be xxx). Inductive reasoning is prone to the "turkey farmer error" (the turkeys observed the farmers coming to feed them every day, so they concluded that food would fall from the sky every day, but they were all slaughtered on Thanksgiving).

Instead, it is a deductive method . By analyzing the first three cycles, we get the internal law (the bull market ends with a collapse due to excessive 60-day gains), and predict the fourth cycle based on the internal law + theorem (the larger the volume of the investment product, the lower the volatility).

5. The previous article "Talking about BCH's current fork & future coin prices" mentioned that the upcoming surge in mainstream coins is also a deductive method, not an inductive method. Based on the retail investor low price theorem (retail investors like to buy cheap coins with large room for growth) and the phenomenon (every time Bitcoin breaks its previous high, news will cause a large number of retail investors to pour in), it is predicted that mainstream coins will surge after BTC breaks its previous high .

Let’s review the previous article’s front cow & back cow :

Depending on whether the previous high is broken, the bull market can be divided into two stages: "pre-bull market" and "post-bull market" . In the pre-bull market (including the second half of the bear market), funds pay more attention to risk. It is not known whether the coins you buy can survive to the next round of bull market, so people are more willing to buy BTC that will definitely survive to the next round .

Once BTC breaks through the previous high, it means a large number of new people will pour in . Because more than 80% of people learned about Bitcoin through the news of new highs during the last bubble period of a bull market, and most of them will not delve into it, and their understanding of Bitcoin remains in the news that "Bitcoin is a scam, a bubble, and the Ponzi scheme is about to collapse and return to zero."

It is not until Bitcoin breaks through its previous high and creates another round of news that people who heard about Bitcoin at the end of the previous bull market will realize: "Hey, Bitcoin is not dead yet? It has reached a new high again? It doesn't look like a bubble scam?" Thus, a new round of users poured into the cryptocurrency circle along with the news of Bitcoin's repeated record highs, and the wheel of history rolled forward.

When newcomers enter the cryptocurrency circle, will they buy Bitcoin? Most of them will not, because they think Bitcoin is too expensive, and Bitcoin has already reached ATH (All time high). It is better to buy mainstream coins and altcoins that have smaller market caps, more stories, have not reached previous highs, and have a larger increase multiple .

As a result, not only LTC, but the top 20 currencies have started the main upward trend, leaving Bitcoin far behind.

6. The previous article used LTC as an example only. In fact, the top 20 mainstream coins all have similar performances . I will not take so many statistics on the top 20. In October 2015, when the last bull market started, I took the top 10 mainstream coins at that time (9 left after removing USDT). Except for MAID, which had already risen in advance, it did not have a significant increase in BTC when BTC broke the previous high. The remaining 8 coins all verified this prediction.

The last round of BTC breaking the previous high had a stage. It first effectively broke through the previous high on February 23, 2017, and then pulled back, until the last breakthrough on April 17 (it never fell below the previous high after that). The "previous high breaking stage" from February 23 to April 17 is marked in yellow in the figure .

7. Some people may worry whether this institutional bull market will lead to the end of the surge in mainstream currencies.

First of all, don’t deify institutions. In this fast-growing market that requires high awareness, institutions are just big leeks . When I popularized Bitcoin at 1,500 yuan in 2015, institutions did not buy it. They waited until Bitcoin rose to 120,000 yuan before rushing in to buy. From this perspective, are institutions big leeks?

Institutions are collective decision-making mechanisms. The upper limit of collective wisdom is very low, which means they are only slightly smarter than ordinary people . Suppose there is a very smart trader in an institution. He may have realized that Bitcoin has a promising future six or seven years ago, but can he buy Bitcoin? No, because there is no compliant channel.

Later, even when the Grayscale Fund appeared in 2013, it was very unlikely that all institutions, from traders to supervisors to decision-makers, would agree that buying Bitcoin was right, and it was difficult to gather high awareness at the same time . Even if everyone agreed to buy Bitcoin, they would still encounter regulatory obstacles, and regulation is another upper limit of collective wisdom. Therefore, institutions cannot buy cheap "real" Bitcoin, but can only buy expensive compliant Bitcoin, and paper Bitcoin that cannot be withdrawn.

In terms of financial bubbles, has there ever been a financial bull market in history where only institutions participated, and no retail investors participated? Without retail investors, where would the frenzy come from, where would the bubble come from? It is not even logically called a bull market . On the other hand, if institutions participate and the market rises dramatically, can retail investors resist buying in? Institutions can buy from funds such as Grayscale, while retail investors can buy directly from the market or from places like Paypal.

Therefore, we should pay attention to the four treasures of Paypal (BTC ETH BCH LTC). There are only a few million coin holders in the cryptocurrency circle, while Paypal has 300 million users .

Therefore, institutional participation may change a certain section of the K-line (for example, a rise from 10,000 to 19,500 without a pullback is very rare), but it will not change the general direction of the entire bull market. After BTC breaks the previous high, the main upward wave of BTC and the mainstream surge in BTC will occur at the same time .

In the future, institutions will also buy mainstream coins (that have user demand), but they are relatively dumb, so they need time to learn . Buy BTC for 1,500 yuan, sell it to institutions for 120,000 yuan, and then exchange it for mainstream coins, and start another round. Isn’t it great? :)

8. The bull market is coming. Do not trade in waves during the main uptrend . The increase driven by the central bank (through printing money) will ignore all technical indicators.

The blockchain market is often like the market for hairtail. What is worse than not being able to eat the fish is that you only eat the head of a hairtail .

Of course, historically, unfortunately, most people cannot hold onto their coins and sell them early in the bull market . Only miners, and most miners, can enjoy the bull market from beginning to end . The reason is simple:

If the coins you hold increase 10 times, you will be tempted to sell them.

But you definitely won’t want to sell the hen (mining machine) that keeps laying golden eggs.