Financial markets have always been marked by cycles. Moments of panic and sharp declines alternate with phases of prosperity and significant highs. The image that circulates among investors — a vintage chart from 1875 — illustrates this thesis well: there are recurring periods that signal when to buy and when to sell.
In this article, we will explore how this reasoning can be applied to today's world, especially in the crypto universe, where volatility is even more intense.
The Three Main Cycles
1. Period A — Panic and Collapse
• Years when the market enters a strong correction or crisis.
• Historically, these periods always return.
• Example in the crypto market: 2018 and 2022, years of significant decline for Bitcoin.
2. Period B — Times of Prosperity
• Cycles of great opportunities to sell, when prices have already reached high levels.
• They represent market peaks, where experienced investors take profits.
• In Bitcoin, we can relate this to the end of 2017 and 2021, when the price hit record highs.
3. Period C — Crises and Dips
• Moments of depreciation, but that offer the best buying opportunities.
• Those with a long-term vision take the opportunity to accumulate assets at discounted prices.
• It is in this cycle that the strongest “holders” emerge, waiting for the next boom.
What does this mean for the crypto market?
Bitcoin and altcoins follow, in a way, this same dynamic. Bitcoin's halving, which occurs every 4 years, has proven to be a natural trigger for bullish cycles (B) followed by correction periods (C).
Understanding these cycles allows the investor to position themselves better:
• Buy during the dip (C), when fear dominates.
• Sell during the highs (B), when euphoria reaches the market.
• And be prepared for moments of panic (A), which inevitably return.
Conclusion
History shows that economic and financial cycles repeat themselves. For the modern investor, especially in the cryptocurrency market, this thesis is even more relevant. Those who understand the signals and act with discipline can turn crises into great opportunities.
🔑 Remember:
The market does not reward those who act on emotion, but rather those who understand the cycles and know how to wait for the right moment.
