History may not repeat itself. But it rhymes

Market Analysis

February 12, 2024

History may not repeat itself. But it rhymes

History may not repeat itself. But it rhymes

There's widespread speculation persistent for more than a year now, that Bitcoin will drop to $12,000 and altcoins will capitulate further. However, I disagree. Here's why:

Altcoin investors' confidence dwindles as markets stagnate. Many altcoins have been trending downwards since May 2021, constituting the longest crypto bear market.

In 2022, numerous attacks on the blockchain ecosystem led to government intervention. Regulators, keen to protect investors, threatened the crypto ecosystem's survival. Like the SEC and the DOJ suing Binance and traditional finance (TradFi) jumping in with ETF proposals and even creating their own exchange, EDX.

What does this signify?

It shows that social media sentiment is informed by history. New investors, primarily those who joined in 2021, have mostly experienced losses. Their future predictions are thus gloomy, reflecting their past experiences.

This is similar to real estate trends.

But forty years of consistent real estate growth doesn't guarantee future returns. The same applies to crypto: a long downward trend doesn't necessarily imply further decline. Bitcoin's price is slowly climbing after market attacks.

Capitulation occurred in May 2022, with Luna collapsing. Since then, Bitcoin has consolidated between $15-25K, a perfect accumulation phase. Meanwhile, Binance faces a lawsuit, and major institutions like Blackrock and Invesco apply for Bitcoin ETFs.

These institutions likely accumulated their positions before the news broke. 

What if they orchestrated FTX's downfall to increase their market share?

We're now in capitulation's second phase: time. It's a tedious phase, tempting investors to move to other markets. Yet, staying patient and understanding market cycles is critical. Major institutions are entering the game; it's wise to follow their lead.

Post-depression, disbelief sets in, often marked by expectations of further market lows. Remember, markets also predicted a $2K Bitcoin in 2019, we never saw it.

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