Crypto Duality

Bob Farrell’s 10 Rules — Explained with $BTC & $ETH
Wall Street legend Bob Farrell created 10 rules of investing that have stood the test of time. Though he wrote them decades ago for stock markets, they apply beautifully to today’s world of Bitcoin (BTC) and Ethereum (ETH). Let’s break them down in simple terms — and see how these rules show up in crypto cycles.
Rule 1: Markets Return to the Mean Over Time
What it means: Prices may run too high or too low, but eventually they come back toward their long-term average.
Crypto Example:

Bitcoin’s 2021 run to $69,000 was far above its long-term moving averages. The sharp 2022 correction back to $15,000 was a return to the mean. Ethereum did the same, spiking to $4,800 before sliding back near $1,000.

Rule 2: Excesses in One Direction Lead to Opposite Excesses

What it means: Huge rallies are often followed by equally dramatic crashes.

Crypto Example:

The mania around BTC and ETH in late 2017 led to an equally painful crash in 2018, where BTC fell 80% and ETH dropped more than 90%.

Rule 3: There Are No New Eras — Exaggerations Are Never Permanent
What it means: People always think “this time it’s different” — but markets prove otherwise.
Crypto Example:

In 2021, “NFTs and DeFi will make ETH unstoppable” was the hype. But the following bear market showed ETH still moves with market cycles, just like tech stocks did in the dot-com bubble.

Rule 4: Exponential Rising and Falling Markets Usually Go Further Than You Think
What it means: Trends go higher or lower than seems reasonable.
Crypto Example:

Few thought BTC would cross $60k in 2021, yet it nearly hit $70k. Likewise, few imagined it would crash to $15k in 2022 — but it did.

Rule 5: The Public Buys the Most at the Top and the Least at the Bottom
What it means: Retail traders usually chase tops and panic at bottoms.
Crypto Example:

Google searches for “buy Bitcoin” peaked right as BTC was topping in 2021. By late 2022, when BTC was at $16k, most retail traders were gone — exactly when smart money was buying.

Rule 6: Fear and Greed Are Stronger Than Long-Term Resolve
What it means: Human emotion drives markets more than rational planning.
Crypto Example:

The Fear & Greed Index showed extreme greed at BTC $65k and extreme fear below $20k. Yet those who overcame emotions made the best trades.

Rule 7: Markets Are Strongest When They Are Broad and Weakest When They Narrow to a Handful of Blue-Chip Names
What it means: Healthy rallies involve many assets moving up, not just a few.
Crypto Example:

In late 2020–early 2021, BTC, ETH, and altcoins all rallied together — a broad, healthy market. In 2023, BTC dominated while most alts lagged, a sign of weakness.

Rule 8: Bear Markets Have Three Stages — Sharp Down, Reflexive Bounce, Prolonged Grind
What it means: Bear markets follow a pattern.
Crypto Example:
BTC’s 2022 bear had:
Sharp fall (69k → 30k)Reflex bounce (30k → 45k)Grind lower (45k → 15k)
ETH followed the same path.

Rule 9: When All the Experts and Forecasts Agree — Something Else Happens
What it means: Consensus is usually wrong.
Crypto Example:

In early 2020, experts said BTC couldn’t survive the pandemic. It went from $4k to $69k. In late 2022, analysts predicted $10k — BTC instead doubled to $30k+.

Rule 10: Bull Markets Are More Fun Than Bear Markets
What it means: Self-explanatory — everyone’s happier when prices go up.
Crypto Example:

Crypto Twitter in 2021 was euphoric. In 2022, silence. By mid-2023, fun started returning as BTC and ETH recovered.

The Bottom Line
Bob Farrell’s rules aren’t just old Wall Street wisdom — they map directly onto crypto’s wild cycles. Bitcoin and Ethereum keep proving that human psychology hasn’t changed. If you want to survive (and thrive) in crypto, remember these rules — they’ll guide you through both the hype and the heartbreak.

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