What a wonderful place crypto Twitter can be at times. As someone constantly connected with that community, I can clearly say that CT has become a great counter indicator. Let me tell you why...
Ever since mid-March, when Bitcoin "refused to go well above $74,000 and top into the $100,000 level," the bullish sentiment of crypto investors has slowly died out. We are now at a point where the majority has turned bearish, and many of us think a bear market is already in or close to beginning. We'll see about that.
What the majority is missing out on when "criticizing the bull market" is the fact that Bitcoin made a new all-time high before the halving even occurred. That had never happened in its entire history. The current sentiment of the market is pretty much at the same level it was back in late 2023 when the majority was saying the rally from $15,000 to over $30,000 was just a bear market rally.
That was the pivot point from where we literally galloped towards the current ATH of $74,000. $40,000 was added to Bitcoin's dollar valuation over the course of less than two months with almost no breather. The majority forgot about that and how bullish they were all the way up. Now they are extremely bullish on the way down as well. Down to, some might ask...
Well, I don't know. $57,000 might be the bottom of the consolidation range we've been in for about four months now, or not... Nobody knows... Whoever claims to be knowing anything certain in crypto is delusional. I do consider that the bull market is still in play, and to some extent, the current price action reminds me of 2019.
Over the past couple of years, I refused to compare the current bull market with other previous ones, but if you look at the year 2019, you'll see that BTC had a quite significant rally in that year, from something like $3,700 all the way to $14,000 just to dive down to something like $4,000 in March 2020. That was a 3.5X gain on BTC before the actual parabolic run began.
In this cycle, BTC rallied a 4.7X from bear market lows to the current local top of $74,000, which kind of resembles the 2019 price action. Now we're having a longer-than-expected consolidation time after the huge rally for BTC, and plebs are freaking out. I can't say I'm comfortable seeing my portfolio 5X down from its highs of a few months ago, but this is crypto.
You have to endure the storms to make it. The only thing I regret is falling for the shortened cycle theory. In the previous cycle, I fell for the lengthened cycle... Had I come to terms from the beginning that four-year cycles are still in play, I would have better navigated the bull market so far. But we have to learn somehow, and pain is the perfect teacher.
What caused all this havoc? Well, it looks like the German government is offloading Bitcoin, and Mt. Gox exchanged $24 worth of Bitcoin between wallets. You read that right, $24 transactions between Mt. Gox wallets seem to be a reason for panic during a bull market in crypto. Why is the German government selling, and how did they get their hands on all that Bitcoin?
I have no clue, and I honestly do not respect the German government... What I do care about observing is the psychology of the masses, and that is currently wondering whether the top is in... During bull market peaks, no one asks himself if that is really the top because greed is too big to ask such questions. I am waiting for that phase to start aggressively getting out of the market.
What do you think?
Thanks for your attention,
Adrian
