Yes it sounds crazy, but hear me out
Last year was supposed to be a big year for crypto. But it turned out to be a complete disappointment. No new ATHs, no growth, and a lot of projects going down under. ALTs constantly underperformed and we now have the definitive confirmation that they really did perform very poorly overall. It can most clearly be seen when looking at the MC of ALTs where we didn't get a new ATH and therefore broke the "rule" that the MC was supposed to constantly set higher highs. But the 3rd cycle clearly didn't perform as the two others before it.
- First cycle 2015-2017: 185,000%
- Second cycle 2019-2021: 8000%
- Third cycle 2023-2025: 500%
Essentially the rate of diminishing returns is extraordinarily high with over 90% lower retunrs for the next cycle. At this rate we could expect only around a 40% return for the fourth cycle... Not very impressive and it is a sign to me that this cycle dynamic won't continue in this way.
We can see that the third cycle also failed to make a new ATH. So the question I'd like to ask if we might be in a larger 3 wave cycle? Or, and this would be extremely disappointing, at the end of the ALT markets as we know them. In other words, the explosive growth from 2016-2022 might be the final overall growth phase before heading into a multi year bear market.
Two scenarios
- ascending oscillating wave with an incoming multi year bear market
- a repetition of the observed parabolic arc with an incoming multi year bull market
I think what this boils down to is whether ALTs will actually present utility in the future or if they will simply fade out. If ALTs will continue to be mainly about Memes and NFTs without value big money will simply not continue to flow into the market. But if, on the other hand, we see more widespread adoption in any form, ALTs still have a lot of potential - at least some projects. And perhaps that is the point here: while many projects will fizzle out, it is enough if we get only a couple of breakthroughs to turn the market around overall.
Outlook
Personally, I think it is a bit premature call ALTs dead. The technology is still relatively new and we haven't seen any big adoption yet. A long bear market, perhaps concluding in the early 2030s would mean that ALTs would essentially be "dead". Perhaps they would even never recover and the chart would show a continuing downtrend instead of an oscillation.
For now it is more of a "feeling" that we will see a turn around and follow in the foot steps of another parabolic curve. I guess it will become fairly soon apparent where things will head; but if we follow the bullish scenario we could see something like this:
Conclusion
Now what I haven't told you is that the blue date range doesn't just mark the bull markets, they actually mark the end and the beginning of the blood moon sets... Yes, they perfectly align. While this doesn't guarantee a rally of around 10,000% until the end of 2028 (it could be the mere 40% figure given earlier), it does seem to suggest a positive price environment for the foreseeable future.
If we actually do follow in the parabolic arc scenario, I would expect this next cycle to be marked by much more growth again, similarly to what we saw in the first "1" cycle.
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
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