How much longer will the bull market last? When should profits be taken?

Source: Talking About Li and the Outside

Let's briefly discuss the market. The market has recently entered a range-bound fluctuation. In terms of BTC, although the indicators are bearish and the MACD seems to be about to cross again, the area around $112,000 is a short-term support level. As long as this position is not broken, it is likely to continue fluctuating for a while. As shown in the figure below. Press enter or click to view image in full size

As for ETH, it may have risen relatively quickly recently. Just a few days ago, it was close to its historical high, but it has now entered a correction phase and is currently in a range-bound fluctuation. As shown in the figure below. However, from the indicators, it may continue to fluctuate for a while. In extreme cases, it cannot be ruled out that it will retest the $3600-$4000 area, but the overall direction in the medium term remains bullish. There is a high probability that it will break the historical high this year and attempt to reach the $5000 mark. Press enter or click to view image in full size

Of course, regarding the market trend, different people may have different views or references, and any judgment can only serve as a supplement. The above is just our own opinion; you can have your own judgment and make decisions that suit your risk preferences. Press enter or click to view image in full size

In the previous article (August 14), we mainly shared some data on ETH and stablecoins and discussed the topics of opportunities and risks. At the end of the article (Notion version), we also reviewed some of my personal positions and plans. Today, we continue to talk about the topics of opportunities and risks.

Based on historical experience, the most frenzied moments in the market often occur in the later stages of a cyclical period, and we seem to be in such a stage now. However, compared to previous bull market cycles, the risk of hitting a peak at any moment is much higher now.

When the market is in an upward trend, it may seem easy to make money on the surface, but actually holding onto those profits is very difficult. Although many people are aware that no one can accurately predict when the market will reach its peak, human nature leads most people to hope to sell at the peak in the later stages of a bull market.

Recently, I've noticed many people still shouting: "This time is different!"

But to be honest, shouting such slogans is not very meaningful. Each cycle is different; we neither need to completely cling to past experiences nor should we always hold onto new fantasies about the market.

A more reasonable approach is that we should always be prepared and set a Plan B for ourselves. For example: if the current position is indeed the peak, are you satisfied with the profits you have already made?

It seems that many people are waiting for a bull market tail similar to those in 2017 and 2021. The question arises: what if we skip the traditional ending phase of a bull market and instead form a peak before directly entering a bear market (mini bear market)? How would you respond?

More and more people are beginning to believe in the theory of super cycles in bull markets. More and more celebrities and big names are promoting cryptocurrencies, and more and more people are searching for and discussing cryptocurrencies… as shown in the figure below. Press enter or click to view image in full size

Bitcoin continues to break historical highs, and Ethereum is close to its historical high… We always say that opportunities and risks coexist, so we should not embrace risk as we did at the beginning of the cycle. Instead, we should gradually take profits in batches from now on. This will make your mindset and positions more flexible, rather than being completely crushed again when a collapse suddenly occurs.

Let's take a simple comparison with the Bitcoin trend during the 2021 bull market:

For example, from a time perspective, the period from the peak in 2017 to the peak in 2021 lasted about 1435 days, while from the peak in 2021 to now, about 1373 days have passed. Without considering the super cycle, just from a cyclical (4-5 years) perspective, it seems that there are still 2-3 months left. Even if you want to cling to past experiences, now should be the time to start taking profits in batches.

For example, from the perspective of the relationship between Bitcoin and altcoins, in previous bull markets, Bitcoin's dominance would only decline in the final stages, after which altcoins would start to rise. In the past few weeks, we seem to be at the beginning of this trend. Although the scale of performance is very different from previous bull markets, the trend direction seems unchanged, with Ethereum and some mainstream coins beginning to lead this trend again.

Many people believe that we should not compare history with the present, but history is sometimes not just data; it is also a reflection of human nature. Although many believe that the current market sentiment is insufficient to support a market peak and that the crypto market will rise significantly and last longer, this cycle will completely break the four-year cycle pattern. However, so far, we see that the overall trend of the market remains consistent. Bitcoin has entered a second wave of innovation, reaching new historical highs, its dominance is declining, Ethereum continues to look bullish and is preparing to create new historical highs, and many altcoins are changing in line with the trends of Bitcoin and Ethereum.

If the current overall momentum can be maintained, then after experiencing some effective adjustments and leverage cleaning, before the end of this year, Ethereum's price will not only break new highs but may also reach around $6000. At that time, some liquidity may quickly shift to other mainstream altcoins and rapidly turn to some smaller cap coins. During this period, the altcoin market will appear to be the most rewarding but also the riskiest.

From the perspective of historical patterns and probabilities, we also believe that this cycle has not yet peaked, but theoretically, it seems to be close to a peak. We will not get entangled in whether the so-called four-year cycle is effective, nor will we get caught up in whether the market will enter a super cycle next. Here, we still lean towards what was mentioned above: after forming a peak, the market may directly enter a bear market (mini bear market), repeating this process. However, from a longer-term perspective (such as the next 10 or 20 years), we still believe that the overall crypto market is positive and bullish.

I remember we shared a picture in our article on January 17. Let's pull it out again for everyone to see, as shown in the figure below. Press enter or click to view image in full size

Many people sigh that short-term trading is the hardest, while long-term trading is easier. But from our own experience, short-term trading is difficult, but long cycles are actually even harder, not easier. The longer the cycle, the greater the likelihood of loss. The market always likes to create various obvious and attractive entry points for people, but it never leaves them with easily and accurately predictable exit points.

What is the most comfortable trading state?

In simple terms, it is a relatively contrarian trading approach. While maintaining flexibility in positions, when the market is quiet, you can look more and buy a little in batches. When the market is performing strongly and sentiment is high, you can sell in batches. During other times, you should eat, drink, and do whatever you want.

What are bull markets and bear markets?

Recently, some people have been messaging me asking: how much longer will this bull market last? When will the new bear market start? Actually, such questions vary from person to person. You might think that Bitcoin falling below MA200 is a bear market, while I might think that Bitcoin dropping from its high at the beginning of this year to its low in April is a bear market, and so on. Theoretically, different people will have different definitions of bull and bear markets based on their understanding of time dimensions, price dimensions, and market sentiment dimensions. However, the reality is that most people are completely trapped by the four-year cycle (historical pattern) or super cycle rhetoric, ignoring their own investment framework.

In short, every cycle will be different, but human nature will never change. The financial market itself is a game of probabilities. The higher the price rises, the harder it becomes for people to sell, and many will even FOMO into buying. If you are not prepared to exit during the best-performing periods of the market, then you are voluntarily becoming someone else's liquidity.

In other words, selling in batches during a strong upward trend in the market is the only way for ordinary retail investors to avoid being trapped. Even if prices may continue to rise, your batch selling strategy can yield good returns, and you can still keep the last 10% of your position to gamble on the perfect peak.

Whether it's a short-term plan, a medium-term plan, or a long-term plan, if you still don't have any corresponding investment framework (including profit-taking strategies), our suggestion is that you should start formulating one now and stick to executing your plan. Plan your trades, trade your plan, rather than waiting for the market to suddenly reverse and continuing to bear the psychological burden of being cut or losing everything.

Of course, we do not provide any trading guidance on specific buying and selling. You can make decisions that suit your risk preferences. To put it bluntly, if you are focused on short- to medium-term opportunities, then you can seize the opportunity for phased exits in the fourth quarter of this year. If you have a long-term perspective, you can certainly continue to ignore any short-term fluctuations and maintain enough patience. For example, if you firmly believe that Bitcoin can reach at least $300,000 and Ethereum can reach at least $15,000 by 2029, and you are not concerned about any price fluctuations during this period, that's great. You can continue to buy more Bitcoin or Ethereum to accumulate.

The market cannot allow most people to make money; instead, it will do everything possible to deceive as many people as possible. Therefore, having your own investment framework is crucial for you to stay ahead of other investors in this market.

That's all for today. The images/data referenced in the text have been supplemented and backed up in the "Talking About Li and the Outside Group." The above content is merely personal opinions and analyses, intended for learning and communication purposes, and does not constitute any investment advice.