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1/ We are in the early stages of a new #Bitcoin bull market. Let's explore what we know about such bull markets based on observations from the four major hype cycles that Bitcoin has already undergone. A thread 👇
2/ Bull markets start off relatively slowly because of an overhang of potential supply. Firstly, some who bought at higher prices in the prior cycle and are looking to be "made whole" so they can escape their positions, plus whales who wished they had cashed in near the top.
3/ Before it is clear the bull market has begun, there is a period of steady accumulation as "weak hands" are liquidated and replaced by "strong hands" who have long term conviction in the value of #Bitcoin.
4/ In a bear market, good news does not matter. Every rally is sold off and hopes are pitilessly crushed. The bull is the opposite. Bad news no longer matters and every dip is met with eager buyers who are looking for suitable entry points into #Bitcoin.
5/ Once the prior all time high is breached, there is no longer an overhang of supply. The price is free to run wild in an "open field". This is when #Bitcoin's price appreciation begins to accelerate apace.
6/ Once a new #Bitcoin all time high is made, new highs trigger a feeding frenzy. Media attention returns and new entrants are attracted by the allure of quick profits, driving prices higher even faster. Prices eventually reach a crescendo top.
7/ #Bitcoin's price action is parabolic in nature during a bull market. This means that much of the price appreciation happens in a short time window at the end of the bull market. The last $5000 of appreciation in the previous bull happened in a matter of days.
8/ There will be several moments during the bull market where major corrections will mistakenly be called "tops". Several prominent commentators made the mistake of calling tops for #Bitcoin at $5000, $9000 and $15,000 in the prior bull. The same will happen again in this run.
9/ One sure sign a #Bitcoin bull market is coming to an end is the sloppiness of the trading. Large inter-exchange spreads, major price "gaps", and the inability of exchanges to stay open during the mad final rush of profit-motivated speculators are major warning signs.
10/ Very few people correctly anticipate how high the market will go and most will be shocked by the final peak. This is the bull market when #Bitcoin achieves geopolitical significance, so everyone will be watching. The feeding frenzy may be like nothing we've ever seen.
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