Bitcoin is about to put you through one of the most mentally challenging tests that you have ever experienced. How well you handle the stress and pressure will determine your success during the next bull market.
The talk of the entire cryptocurrency market in the last several months has been the Bitcoin ETF. Finally Wall Street had entered Bitcoin and it would be the catalyst that ignites the bull market and sends the price of BTC to unprecedented heights.
However, after the ETF finally began trading we learned that it was a sell-the-news event. In hindsight, this should have been expected. With extreme selling pressure coming from investing exiting GBTC. Most notably FTX, selling all of their GBTC shares to go toward their bankruptcy. While the price of BTC didn’t go to the moon the instant that the ETF began trading; this isn’t the end of the story. This will likely take longer than most were hoping for, but the end result will still be incredibly bullish. Instead of hours and days, it will take weeks and months.
We are a society with an extremely short attention span, and investors are already thinking about what the next price catalyst will be. The obvious answer is the Bitcoin halving. Toward the end of April, the issuance rate of new Bitcoin being created and given to miners will be cut in half. Over the course of Bitcoin’s history, this is the event that crypto cycles have been centered around.
The Halving & Hype Leading up to it
If we know one thing about the cryptocurrency market, it’s that we overhype everything. The recent Bitcoin ETFs are a prime example of that. During the next few weeks when everyone begins turning their attention toward the halving, the hype will be unprecedented.
You will begin hearing experts and influencers making price predictions. During the last cycle, we heard a wide range of bullish price predictions. Ranging from the extremely conservative $100k, all the way up to $500k and above. As we now know, Bitcoin didn’t even reach the most conservative of those predictions. Many people including myself argue that Bitcoin had its wings cut prematurely last cycle and didn’t allow the price to reach its full potential. Due to the self-inflicted wounds caused by greed that resulted in insolvencies all around the market. Bitcoin would only make an all-time of $69k.
History in crypto doesn’t repeat, but it sure does tend to rhyme.
You can learn a lot by researching past Bitcoin performance. Each cycle there is always extreme hype leading up to the halving. The price begins to rise and after the halving finally takes place Bitcoin becomes boring. Moving only sideways or down for several months. This is the doldrum period of extreme boredom in the market.
This is when Bitcoin will begin giving people their ultimate test.
The most fun time to be invested in Bitcoin is when prices are going parabolic. People become devastated when prices are plummeting, but many view it as a chance to get a better entry price and build up their portfolio. Either way, when the price is going up or down; it is exciting to be paying attention to the market. The volatility is important.
With that said, the most dangerous period is when the price of Bitcoin is doing absolutely nothing. Ending the day at nearly the same price as when you woke up, months on end. The combination of disappointment after the halving, and Bitcoin’s price doing nothing, will be too much for many to take. Causing them to leave the market.
This is the key point.
Outside of the coldest points of the bear market, this is the best time to be accumulating. Not during the bull market when everyone is feeling FOMO.
If this cycle is similar to what we experienced in 2020. We will see the price of Bitcoin rise a little leading up to the halving. This will then be followed up by 6 months where Bitcoin moves sideways. Then finally toward the end of the year, Bitcoin will begin to make its move.
While this price boredom will cause many to lose interest in the market, it is vital for what is about to come. This quiet price period for Bitcoin is similar to a slingshot. While the price is moving sideways, the sling is actually being pulled back. All the while the tension and strength are increasing. Then finally once the supply shock due to the halving hits the market. That is when the slingshot will be released and Bitcoin’s price will soar with extreme volatility. This is what causes the price of Bitcoin to achieve incredible heights, and it will happen again this time as well.
The only question is if you have the willpower and stamina to survive Bitcoin’s final test before the bull market.
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As always, thank you for reading!