How long can the Web3 bull market last? How can we seize the opportunity for doubling and achieve a soft landing?
Looking at the historical market data, what are the indicators we can refer to for identifying the peak of BTC in this round?2024 is a year of ups and downs for Web3 crypto enthusiasts, as the entire Web3 market slowly awakens from its slumber. BTC undergoes its fourth halving, entering a bull market cycle that occurs once every four years; global crypto policies gradually become clearer and more compliant; the dust settles on the Trump election; CZ goes to prison and is released; the Federal Reserve begins to cut interest rates; various asset ETFs emerge, and so on. Each event pulls the Web3 industry forward.
BTC has also doubled from the $40,000 mark to a new high of $108,365. So, where are we now in the bull market? How can we grasp the peak to escape?
Glimpsing the Bull Market Peak from Bitcoin's Historical Trends
History is astonishingly similar.
Common points in BTC's previous three bull markets:
Halving occurs at the midpoint of the bull market cycle.
After halving, there is a consolidation and pullback to a low point.
The bull market peak typically appears around the 70th week after halving.
BTC's First Bull Market Cycle (2011-2013)
During the bull market from 2011 to 2013, Bitcoin experienced a halving event on November 28, 2012 (midpoint of the year), which was the 54th week after the low point on November 14, 2011. The peak of this bull market also occurred exactly in the 54th week after halving.
BTC's Second Bull Market Cycle (2015-2017)
During the bull market from 2015 to 2017, Bitcoin experienced a halving event on July 9, 2016 (midpoint of the year), which was the 77th week after the low point on January 12, 2015. The peak of this bull market also occurred exactly in the 77th week after halving.
BTC's Third Bull Market Cycle (2018-2021)
During the bull market from 2018 to 2021, Bitcoin experienced a halving event on May 11, 2020 (midpoint of the year), which was the 74th week after the low point in December 2018. The peak of this bull market occurred in the 75th week after halving.
Forecast for BTC's Fourth Bull Market Cycle (2022-2025)
Based on the above experiences and BTC's upcoming halving on April 20, 2024, the bull market is expected to start by the end of this year. The peak of this bull market is anticipated to occur 75 weeks later, around early October 2025, which coincides with the end of the Federal Reserve's interest rate cut cycle. BTC has significant potential to rise to the $150,000 to $200,000 range.
Retail Investors Unfazed by the Bull Market? With Market Corrections, Are We Back in a Bear Market?
As the year-end approaches, BTC and various mainstream and altcoins experience significant pullbacks. Many people begin to panic, believing that the bear market has returned. The sentiment for this bull market among most retail investors seems to be: there is no FOMO frenzy like in the previous three cycles, and participation feels somewhat indifferent. Even if BTC breaks through the $100,000 mark, it seems to happen quietly, with no inner turmoil.
Why is this the case? The author believes:
1. The Bull Market Sentiment from BTC Halving is Overdrawn: Everyone is already convinced that BTC will definitely reach the $100,000 mark; now it is just a matter of expectation being realized.
2. The Issuance, Circulation, Management, and Ecological Structure of Web3 Assets are Changing: New assets led by the MEME sector are continuously emerging, liquidity is being diluted, and more investment choices make it difficult for funds to focus on a few mainstream assets, resulting in a situation where BTC, MEME, and NFTs are divided. The lack of interaction among assets naturally leads to weak upward momentum.
3. The Issuance of New Assets Lacks Sustainability: Most community tokens chase trends, lacking the composability and scalability seen in the previous DeFi bull market, resulting in a short lifespan for new assets. The zero-sum game feeling intensifies, and most people prefer to "bet small to win big" by participating in new assets, causing BTC to become the main chip for institutions and large players, while retail participation decreases, further reducing attention.
In fact, based on the author's observations of market trends each year, there tends to be a significant pullback around December. This is a healthy cyclical adjustment. First, there are overseas Christmas holidays, where retail investors need to cash out for celebrations, and institutions need to settle various assets and conduct financial audits at year-end, further quantifying and optimizing asset investment configurations. This will lead to a short-term pullback. However, based on the analysis above, the author believes that we are still in the early to mid-stage of the bull market. Bull markets also require pullbacks, "just like human breathing, which needs both inhalation and exhalation; continuously inhaling or exhaling will ultimately lead to suffocation." Bull markets need to rhythmically "inhale" and "exhale." Only by maintaining rationality can we achieve a soft landing of wealth amidst the grand market movements. As long as we are clear that we are in a long-term bull market cycle, every pullback is an opportunity to increase our holdings.
How to Escape the Peak? What Indicators Can We Refer To?
1. Market Sentiment Indicators
Greed and Fear Index: When the market is extremely greedy, it often indicates that prices may be nearing a peak.
Social Media Heat: If relevant keywords (such as "Web3," "DeFi," "NFT," etc.) consistently top social media platforms, it may signal that market sentiment is overheated.
KOL and Media Trends: When numerous opinion leaders frequently promote and mainstream media extensively reports, it is necessary to be cautious as the market may be nearing a bubble stage.
2. Technical Analysis
RSI (Relative Strength Index): An RSI value above 70 may indicate that the market is overbought.
Volatility: When price volatility increases abnormally, it may signal a market peak.
Key Moving Averages: If the price is far from the 200-day moving average, it may indicate that the market is overheated.
3. On-Chain Data
Active Address Count: When the number of active addresses stops growing or even declines, it may indicate that market momentum is weakening.
Trading Volume: If prices rise but on-chain trading volume begins to decrease, it may signal a peak.
Whale Activity: Observe the transfer and selling behavior of large holders. If whales start to sell, the market may be nearing a peak.
4. Capital Flow
Stablecoin Supply: If a large amount of capital flows from crypto assets to stablecoins, it may indicate that investors' confidence in the market is declining.
Net Inflow/Outflow on Exchanges: When a large number of tokens flow into exchanges, it may indicate that investors are preparing to sell.
Institutional Capital Trends: If institutional capital inflows decrease or even withdraw, it may signal a market peak.
5. Macroeconomic and Policy Environment
Changes in Macro Interest Rates: When central banks raise interest rates or tighten liquidity, the crypto market may be affected.
Regulatory Trends: If significant negative regulatory policies emerge, it may trigger a market peak retreat.
Global Economic Signals: For example, a strong dollar, geopolitical events, etc., may exert pressure on the market.
6. Market Cycle Characteristics
Historical Patterns: Review the characteristics and time cycles of past bull market peaks (such as 12-18 months after Bitcoin halving).
Surge in Overvalued Projects: When the market is flooded with overvalued projects that have low actual application value, it may signal a peak.
"Hundredfold Coin" Phenomenon: The frequent occurrence of new projects skyrocketing shortly after launch may be a sign of market bubble.
7. Community and Investor Behavior
Over-participation by Retail Investors: When a large number of unfamiliar new investors flood in, the market may have overheated.
Spread of FOMO Sentiment: A widespread fear of missing out (FOMO) mentality is a common characteristic of peaks.
Changes in Holding Structure: Long-term investors (HODLers) shifting to short-term holdings, or a significant increase in retail holding proportions.
8. Technology and Product Ecology
Stagnation in Technological Progress: If a project's technological advancements and applications do not keep pace with market value growth, it is necessary to be cautious of market overheating.
Decrease in Usage of Decentralized Products: If the number of users and total value locked (TVL) in on-chain protocols declines, it may indicate waning market interest.
In summary, the author believes that the safest approach at this stage is to increase holdings in mainstream and leading assets with each pullback, reducing holding costs and increasing chips. Combining BTC's historical peak cycles, this bull market's peak for BTC may occur around October 2025. Attempting to escape the peak of BTC is generally a dangerous operation, so it is better to manage positions reasonably before high points appear and wait for the capital overflow from BTC to boost altcoins.
