For those like me who look at on-chain data, you’ll include April 2013 as a market cycle peak. We got an 83% crash and months of bleeding afterward. Even if throw that one out, the truth remains:
Bull markets always end.
The problem is, even within bull markets, you get really big swings. Like, really big swings, 100-400% booms between +40% crashes and long consolidations.
In the moment, you never know whether that boom brings the end of the bull market or one of the many “up, then down” movements of a volatile market. Twitter may tell you it’s a bull or bear market, but usually, it’s just prices going up for a while, then going down for a while within a big multiyear bull run.
As a result, each time the price recovers, a few more people get the idea that the bull market will never end—simply because it didn’t end the last time prices went crazy and then crashed.
After all, if Facebook, China, COVID-19, financial crisis, US regulators, ETF rejections, and [you can fill in the blank] can’t stop this market from going up, nothing can, right?
Now that everybody uses on-chain data, we will never have bull and bear markets, just ups and downs. Everybody will borrow against their bitcoin, never sell. Miners are putting their bitcoins into savings accounts. Institutions will never let bitcoin go into a bear market. And so on.
Bull market forever.
We will ruin it
What’s the one thing that can always crush this market?
More specifically, our greed and complacency.
The glee with which we dump our crypto on others, I mean, “take profits.”
The satisfaction that comes with putting lasers in our eyes so everybody else will NGMI and have fun being poor.
All the people who rush in as the market goes parabolic, trying to flip a quick 2x or hop on that super-hot secret altcoin that’s about to pump.
Our complacency in celebrating every new all-time high with a little purchase of bitcoin because “it has to go up.”
The cavalier way we call out FUD whenever somebody says something we don’t want to hear.
Our reliance on data models for security and comfort—but only the data models that confirm what we want to believe, not the ones that suggest something we don’t want to believe.
Choose your beliefs wisely
At some point, we will see signs of a market cycle peak.
The signs are very clear, do not depend on any data model, and have nothing to do with time or price. They come regardless of inflation, hyperinflation, ETFs, laser eyes, memes, and whatever social media is talking about. They reflect behaviors we only see as the market approaches its peaks, as evidenced by the movements of bitcoins on the blockchain and among entities that use bitcoin.
When will those signals come?
We shall see. If you sign up for a premium subscription to the Crypto is Easy newsletter, I’ll let you know when I see those signals.
Hopefully, not for a long time. Certainly not today.
Today, we don’t even need to think about the peak. It’s too far off. Let’s see where the market takes us and what people do as prices go up, if they go up at all.
When Twitter or YouTube tells you “sure, we’ll have crashes and dips, but there’s no way the bull market could end now,” come back to this article.
At some point, the bull market will end. We will fall into a 1- or 2-year bear market that sends bitcoin’s price down 85% and altcoins down 95% or more. The only question is when.
When that time comes, make sure you’re honest with yourself. Others will not give you the same courtesy.
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