How long does the bull market last? When should profits be taken?

Article source: Words Beyond Words

Let's first briefly discuss the market situation. In recent days, the market has re-entered a range-bound oscillation. For BTC, although the indicators look bearish and MACD seems about to cross again, the area around $112,000 is also a short-term support level. As long as this level is not broken, it will likely continue to oscillate for some time. As shown in the image below.

Press enter or click to view image in full size

As for ETH, it may have risen relatively quickly recently. After being close to its historical high just a few days ago, it has re-entered a correction phase and is currently in a range-bound market. As shown in the image below. However, from the indicators, it may continue to oscillate in the short term. In extreme cases, it might retest the 3600-4000 area, but the medium-term direction remains bullish. There is a high probability of breaking the historical high this year and attempting to challenge the $5000 round number.

Press enter or click to view image in full size

Of course, different people may have different views or reference points regarding market trends, and any judgment can only serve as an auxiliary. The above is just our own perspective. You can have your own judgment and make decisions suitable for your risk appetite.

Press enter or click to view image in full size

In the previous article (August 14th), we mainly shared some data about ETH and stablecoins, and discussed opportunities and risks. Today, we continue to talk about opportunities and risks.

Based on historical experience, the market often goes crazy in the late stage of a cyclical period, and we seem to be in such a stage now. Compared to previous bull market cycles, the probability of topping out at any moment is much higher.

When the market is in an upward trend, it seems easy to make money, but it's actually difficult to hold onto gains. Although most people know that no one can accurately predict when the market will top out, human nature drives most people to hope to sell at the peak of the bull market cycle.

Recently, many people are still shouting: This time is different!

But frankly, shouting such slogans is meaningless. Each cycle is different, and we don't need to be rigid or always harbor new fantasies about the market.

A more reasonable approach is to always be prepared and set a Plan B for yourself, such as: If the current position is the top, are you satisfied with the profits you've already made?

Now, many people are waiting for a bull market finale like in 2017 and 2021. The question is, what if we directly skip the traditional bull market ending and form a stage top before entering a stage bear market (mini bear market)? How would you respond?

Currently, more and more people are believing in the super cycle theory, more celebrities and big names are promoting cryptocurrencies, and more people are searching and discussing cryptocurrencies... As shown in the image below.

Press enter or click to view image in full size

Bitcoin continues to break historical highs, and Ethereum is close to its historical high... We always say that opportunities and risks coexist. Therefore, we should no longer embrace risks as we did at the beginning of the cycle, but gradually start taking profits in batches, which will make your mindset and positions more free, rather than being completely overwhelmed when a collapse suddenly arrives.

Let's compare Bitcoin's trend during the 2021 bull market:

From a time perspective, the top in 2017 to the top in 2021 lasted about 1435 days, and from the 2021 top to now has been about 1373 days. Without considering the super cycle, from a stage (4-5 year) cycle perspective, it seems there are only 2-3 months left. Even if you want to be rigid, now should be the time to start taking profits in batches.

For example, from the relationship between Bitcoin and Altcoins, in previous bull markets, Bitcoin's dominance would only decline in the final stage, followed by Altcoins rising. In the past few weeks, we seem to be at the beginning of this trend. Although the scale is different from previous bull markets, the trend direction seems unchanged, with Ethereum and some mainstream coins leading this trend.

Many people believe we shouldn't compare the present with history, but history sometimes represents human nature. Although many believe the current market sentiment is insufficient to support a market top and that the crypto market will continue to rise for much longer, breaking the four-year cycle, so far we see that the overall market trend remains unchanged. Bitcoin has entered the second wave of creating new historical highs, its dominance is declining, Ethereum continues to look bullish and prepare to create a new historical high, and many Altcoins follow Bitcoin and Ethereum's trend.

If the current momentum continues, after some effective adjustments and leverage clearing, before the end of the year, Ethereum's price will not only break new highs but may also reach around $6000. At that time, some liquidity might quickly shift to other mainstream Altcoins and rapidly move to some small-cap coins. This period in the Altcoin market looks to be the most rewarding but also the riskiest.

From historical patterns and probability, we also believe that the current cycle has not yet topped out, but theoretically seems close to a stage top. We won't get hung up on whether the four-year cycle is valid or whether the market will enter a super cycle. We are more inclined to the previously mentioned scenario: the market may form a stage top and directly enter a stage bear market (mini bear market), repeating this cycle. However, in a longer perspective (such as the next 10-20 years), we still believe the crypto market is positive and bullish overall.

We remember sharing an image in our January 17th article, which we'll retrieve for everyone to see, as shown in the image below.

Press enter or click to view image in full size

Many people often sigh that short-term trading is the most difficult, while long-term trading seems easier. However, from our own experience, short-term trading is challenging, but long-term cycles are even more difficult, not easier. The longer the cycle, the higher the probability of losses. The market always likes to create various obvious and attractive entry points but never leaves an easily and accurately predictable optimal exit point. What is the most comfortable trading state? Simply put, it's a trading method that goes against human nature. Under the premise of always maintaining position flexibility, when the market is neglected, you can look more and buy in batches. When the market performs strongly and emotions are high, you can sell in batches. At other times, you can eat, drink, and do whatever you want. What are bull and bear markets? Recently, some people have been leaving messages asking: How much of this bull market is left? When will the new bear market start? Actually, this varies from person to person. You might consider BTC breaking below MA200 as a bear market, while I might consider BTC falling from its early-year high to the April low as a bear market, and so on. Theoretically, different understandings of time dimensions, price dimensions, and market sentiment dimensions should produce different bull and bear definitions. However, the reality is that most people are completely trapped by the four-year cycle (historical pattern) or super-cycle narrative, ignoring their own investment framework. In short, each cycle will be different, but human nature never changes. The financial market itself is a probability game. The higher the price rises, the harder it becomes for people to sell, and many will even FOMO buy. If you don't prepare to exit during the market's best performance, you're voluntarily becoming someone else's liquidity. In other words, selling in batches and stages during a strong market uptrend is the only way for ordinary retail investors to avoid being trapped. Even if prices might continue rising, your batch operation method can obtain good upward space returns. You can even continue to retain the last 10% of positions to gamble on the perfect peak adventure. Whether it's a short-term, medium-term, or long-term plan, if you still haven't developed any corresponding investment framework (including profit-taking strategies), our advice is to start developing one now and then stick to executing your plan. Plan your trading, trade your plan, rather than waiting for market reversal and continuing to bear the psychological burden of being cut or losing everything. Of course, we provide no trading guidance on specific buying and selling. You can make decisions suitable for your risk appetite. To be more direct, if you're looking at short to medium-term opportunities, you can grasp the phased exit timing in the fourth quarter of this year. If you have a long-term perspective, you can naturally continue to ignore any short-term fluctuations and maintain sufficient patience. For instance, if you firmly believe BTC can reach at least $300,000 and ETH at least $15,000 by 2029, and don't mind any price fluctuations in between, you can continue buying more BTC or ETH anytime. The market can't make most people earn money; instead, it will do everything to deceive as many people as possible. Therefore, having your own investment framework is crucial to leading other investors in this market. That's all for today. The image/data sources mentioned in the text have been supplemented and backed up in the "Foreign Exchange Group". The above content is just a personal perspective and analysis, solely for learning and communication, and does not constitute any investment advice.