Author: The DeFi Investor
Translated by: Tim, PANews
Where are we in this bull market cycle?
It's always fascinating to observe how quickly market sentiment can change.
We just experienced: everyone on Crypto Twitter being optimistic about Ethereum, to many turning bearish overnight.
I also want to share some views on the future direction of the market.
Let's widen the perspective and analyze it with data.
First, let's review some historical trends; here is a chart showing Bitcoin's price performance during previous bull market cycles:
If you study past cycles, you will find that the timing of the Bitcoin cycle peaks has been quite consistent:
In November 2021, Bitcoin reached its peak.
In December 2017, Bitcoin reached its peak.
In December 2013, Bitcoin reached its peak.
Every cycle peak so far has occurred in the fourth quarter of the second year after a halving (2013, 2017, 2021, and now the upcoming 2025).
Another interesting phenomenon is that September is usually the weakest month for Bitcoin, while October has historically been one of the strongest months.
Although many people are panicking due to the recent crash, as you can see, market crashes around September (the end of the third quarter) are not uncommon.
If there's anything worth mentioning, it's that it aligns with what has happened in the past.
Does this mean this cycle will be exactly the same as previous cycles? Not necessarily. While history doesn't repeat, it often rhymes remarkably.
Regarding September, given what happened in previous cycles, I have mixed feelings, but I believe the fourth quarter will be a good quarter for cryptocurrencies, as the final stages of each bull market cycle have historically been outstanding in terms of returns.
In addition to seasonal factors, there are other factors that lead me to believe that the fourth quarter will see an increase.
Interest rate cuts are coming (this time it's real).
Now let's temporarily set aside cryptocurrencies: macroeconomics is important.
According to Polymarket's predictions, the probability of the Federal Reserve lowering rates in September is 64%. Why is this significant?
Because when central banks lower interest rates, borrowing costs become lower. The decline in bond yields also encourages investors to turn to riskier assets such as cryptocurrencies.
Historically, significant interest rate cuts have been beneficial for risk assets.
Crypto treasury companies are continuously buying large amounts of cryptocurrency.
The amount of funds is truly impressive.
According to data from www.strategicethreserve.xyz, last week, the crypto treasury company purchased over 532,000 ETH (worth more than $2 billion at current value).
Please note that staking Ethereum ETFs have not yet been approved.
Source: www.strategicethreserve.xyz
A weekly purchase of $2 billion is a huge positive for ETH and altcoins.
Crypto treasury companies will eventually run out of funds, but given the current inflow of funds, I find it hard to believe that the peak of this bull market has already come.
Another reason I believe the cycle peak has not yet arrived is as follows:
Among common peak signals, few have been reached.
Recently, searches for 'cryptocurrency' hit a four-year high, and Jim Cramer has turned bullish, which is why I took some profits earlier this week.
But other than that, the other 'important signals' I mentioned last week have not been triggered.
For example, Coinbase's app store ranking is still over 200. In the last cycle, it was the number one app in the app store.
The fear and greed index is also in a healthy state. Although the market has rebounded recently, it has not yet reached an irrational frenzy. However, with Ethereum, its price has risen significantly in the past few weeks, so a short-term pullback is quite normal.
Unless this is the worst cycle in history, I don't believe the bull market feast is over.
So, how do I prepare for the future?
As mentioned below, historically the best buying opportunity after a Bitcoin halving is in late September of the following year (the last Bitcoin halving occurred in 2024), as October is usually an excellent month for Bitcoin performance.
This is exactly what I plan to do.
According to market patterns in late September, if there is a significant drop, I will pick a few popular tokens at that time to increase my position before the fourth quarter.
Otherwise, I will continue to hold my current position.
If everything goes as expected, I will gradually take profits throughout the fourth quarter and significantly reduce my cryptocurrency holdings before the end of the year.
This is my current plan.
However, remember this is a probability game, and many variables may arise in the coming months. As investors and traders, our duty is to adjust our strategies in a timely manner based on new conditions.
We can only guess, so my advice is to make your own plan based on your expectations.
But no matter what you think will happen in the coming months, whatever your plan is, make sure that risk management remains one of your top priorities.
I've said this many times: the hardest part isn't making money, but keeping the money you make.
