Cheat Sheet
The stock market cheat sheet is diagram of market psychology. The most common online seems to be an Illuminati inspired graph. Regardless the information contained within is considered by established investment firms.
A good example cited from Russell Investments! gives a good rational explanation over 4 stages.
- Stage 1: Optimism, thrill and euphoria
- Stage 2: Complacency, denial, hope
- Stage 3: Panic, capitulation, despondency
- Stage 4: Scepticism, caution, worry
Double Checking Other Markets
In the Dot-Com boom from 1997 to 2001 then subsequent bust, showed a very similar pattern. Psychology in this market seems to also follow the cheat sheet. A good example sourced from Capital Group
Crypto Market
So where are we in the crypto-market. Originally I shared this graph on the 13th July 2018 to GetBlockChain's whatsapp group.
Using a green arrow and a blue arrow, I tried to mark the approximate location of where the market is at. Weighing on 60% that we were at the green arrow location.
The blue arrow, considered a 40% weight on dipping to $5000 to $5800, but I was in opinion, that we already hit the triple bottom. So had less of a weighting.
I also drew the following graph on tradingview:
The blue line was the matching line of the psychology chart imposed on the Bitcoin/USD price. It seemed checking the same graph today 16th July, we are some what close to the blue line's estimated position.
If this was to follow true, we should be in for 1 or 2 more major resistances at $6800, before really breaking out. See chart line expanded out:
Quick Conclusion
The Market Psychology that had played out in the Dot-com boom, bust then recovery, was over almost over 20 years.
The crypto market seems to be much faster, at a very short 2-4 years. Dependent on your perspective, this seems to be a market with larges amount of momentum and the volatility shows this.
Life is not exactly like the stock market cheat sheet though, so variations are expected. But looking at the fundamentals of the market too, for example Bit Licenses, possible ETFs, Custodian services and more. Cryptos may be leading in growth far ahead of the stock market by the end of the year.
On behalf of GetBlockChain