At present, the series of articles on Hualihuawai mainly include four categories, namely potential project analysis, the use of on-chain tools, airdrop guides, and the summary of some methodologies (experience, ideas, etc.). Among all these content categories, projects should be the topic series we share the most. In the article about projects a few days ago, we also mainly sorted out some potential projects in the Arbitrum ecosystem.
But some friends left messages saying that they want to hear our judgments on the future market trends. So today, we will give you a brief review of the market trends and make some judgments (guesses) on the future market trends through the Bitcoin halving.
1. Retracement before BTC halving
At present, many people believe that Bitcoin may experience a deeper retracement in the future, and I do not deny this view. If the market will experience a deeper retracement in the future, then we judge that it may happen within the next 140 days, that is, before the first quarter of 2024, the market may face another relatively large decline.
So, if this really happens, how low will Bitcoin fall?
If we refer to historical data, for example, at the same time point in the previous cycle (about 200 days before the halving), BTC retreated by -24% in 2015 and -38% in 2019. So, we make a simple assumption and calculation based on the current price of Bitcoin. If the current price continues to fall by -30%, the price of Bitcoin may return to about $20,000.
2. BTC rebound before halving
In other words, $20,000 should be the lowest position that Bitcoin may reach next. As for many people who are still waiting for Bitcoin at $15,000, thinking about starting to buy at the bottom at that time, I can only say that it depends on each person. Moreover, if Bitcoin really plummets to below $15,000 due to some black swan events, maybe you will still wait and see at that time, and want to wait for the position below $10,000. Human nature is often like this. As for our suggestions, it is still the operation idea that has been mentioned many times in previous articles. Start making fixed investments now, and use DCA to reduce your average purchase cost. When the next bull market comes, you will have a stable and high probability of several times the return.
OK, let’s get back to the point. As mentioned above, when BTC experiences a deeper retracement before the halving, according to historical experience, there will often be a rebound before the halving about 60 days before the halving. The rebound at this time is mainly due to the hype of the halving expectations, and there are often some favorable news in various media to attract more funds (leeks) attention.
3. Continued retracement before BTC halving
After the hype of the halving expectations mentioned above, there is a high probability that there will be another retracement before the halving. This retracement often occurs in the short term before and after the halving date. For example, the retracement depth before the halving in 2016 was -38%, and the retracement depth before the halving in 2020 was -20%.
The main purpose of the pullback before the halving here is probably to make investors (especially those who entered during the previous hype phase) question and thereby wash out those unsteady chips.
4. BTC enters the re-accumulation phase
After the above retracement before halving, there may be a re-accumulation phase lasting for several months, during which there will be relatively large fluctuations and sideways. The main purpose of this phase is to hope that Bitcoin can continue to have sufficient turnover, and many investors will feel pessimistic at this stage due to boredom, impatience and disappointment, because they originally entered the market because of the bullish expectations of halving. If the market fails to generate returns for them for many months, these people will also be washed out.
Constantly attracting investors to enter the market and constantly washing out those unsteady chips, repeating this for several months, is the only way before the bull market really starts.
5. BTC begins to show a parabolic upward trend
After the above four stages, once Bitcoin breaks through the re-accumulation area and has experienced sufficient turnover preparation, a breakthrough parabolic upward trend will appear next.
It is also at this stage that Bitcoin will continue to accelerate its growth as it moves toward a new historical high. In this process, those old investors who have held on to the bear market for several years will have the opportunity to slowly sell their accumulated coins for profit, and new investors who are late to the party will begin to enter the market on a large scale to take over. Of course, compared to the old investors who have held on for a long time and accumulated coins, in this process, the whales, project parties/institutions are the groups that benefit the most from this game.
Of course, the above is just our subjective judgment, and it does not mean that the future market will really follow this script. Because no one can accurately judge the market trend, we can only make some "guesses" based on historical data, historical experience, and future economic conditions. Moreover, who can tell how many black swan events there may be in the future! In short, no matter how the market fluctuates, you need to stay calm, just make your own investment plan, and before making any decision, please DYOR.
Well, that’s all for today’s post on “Hua Li Hua Wai”. Let’s summarize and review it together. This article mainly makes some speculative judgments on the future market trend through the Bitcoin halving.
Special thanks to: rektcapital, 0xTHades
Disclaimer: The above content is only a personal point of view and analysis, and is only for the purpose of popular science learning and communication among the majority of enthusiasts. It does not constitute any investment advice. Investment is risky, please treat it rationally, improve risk awareness, and abide by the relevant laws and regulations of the country and region where you are located!