Crypto ain’t dead; but is it cycling or supercycling?

  • I think we are still in the 4-year cycle regime.
  • We are probably in a crypto winter and I suspect many teams will survive, but not necessarily thrive in a later cycle.
  • Managing risk is important.
  • Patience is key.

Of timing and 4-year cycles

Newer entrants to crypto talk about how this time will be different and that they don’t believe we will have a crypto winter: “nah, I don’t think it will happen”. Contrast this to the old heads on crypto twitter taking an opposing view.

What does this regime look like? 👀

One of the best ways to visualize the 4-year cycle model is to look at the price chart, but better yet is the following chart from glassnode (h/t: DegenSpartan for sharing).

Source: https://insights.glassnode.com/the-week-onchain-week-18-2022/
  1. Bull Markets (green zone), where sufficient inflow of demand exists to allow investors to realize significant profits, right into the market cycle top (net capital inflows).
  2. Bear Markets (red zone), where the converse is true, and declining prices result in a dominance of losses being realised by investors (net capital outflows). In 2019 and arguably late 2021, we saw profits taken into a brief bullish relief rally, that was ultimately sold into.
  3. Disbelief Recovery to Early Bull (orange zone), where the market trades sideways to upwards, typical of a re-accumulation period or disbelief phase, and realized profits start to exceed losses on a consistent basis.

What drives the 4-year cycle? 🚂

The most popular narrative for what drives the 4-year cycle is the Bitcoin halvening: i.e. when the reward paid out to miners is halved.

  • How much of the 4-year regime is due the Bitcoin halvening and how much is just simply human nature?
The typical phases of a market cycle

Can this time be different? 🕰️

Certainly. Something that’s played on people’s minds lately is the correlation between the crypto market and the US stock market, in particular the Nasdaq. Consequently, the crypto market has tended to react to statements from the US Federal Reserve. I don’t recall this being as prominent in the past as it is now.

In it to win it 🙏

Taking some amount of risk is necessary in order to grow the portion of money being risked. However, some decisions will be better than others: some decisions are more likely to lead to you being #rekt.

  • Will the crypto market ever recover and if so does it matter how long it takes?
  • Does it matter where we place our bets?

Survive then thrive? 🚀

Perhaps Luna is dead now (maybe not?), but Bitcoin and Ethereum are likely to survive. This is not a rallying call for maximalism around either project though. I have previously held BTC and ETH but not currently.

Patience🤔

Perhaps now is the time to buy, but perhaps the market will go down further.

  • Can you survive the feeling of the market going down even further?
  • Is there a reason to start aping right now?
  • Will you miss the coming bull market because you didn’t buy today?
🥺👉🏼👈🏼

About me🎯

I spend the majority of my time worrying about not being wiped out by the crypto market. When I find spare time I enjoy chatting to new teams just starting their journey in the industry.

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