It is worth noting that this is not the first time Bitcoin and other cryptocurrencies have experienced a steady fall. Numerous factors contribute to this. But the question that most crypto investors really wanted to know is, what does the future hold for Bitcoin? We can answer it through various lenses, but let us only focus on two: market cycle history and market phases.
Looking at the Market Cycle History
To see what may happen in the future, traders look at the pattern of the market cycle history. And based on the market cycle history, cryptocurrency has three years of a bull market and a one-year bear market, generally speaking. Some crypto experts believe this pattern reoccurs every four years in this order: bull, bear, bull, bull.
We saw that pattern from 2013 to 2016. According to Investopedia, the Bitcoin price rose dramatically in 2013. Bitcoin prices fell throughout 2014, reaching $315.21 at the start of 2015. Prices gradually increased from 2015 to over $900 by the end of 2016. Based on the price movement, we can see a bull-bear-bull-bull market pattern. And in 2017, the pattern reoccurred. Crypto had a bull run in 2017, followed by a bear one in 2018, the year when the market crashed. It was bullish in the next two years, 2019-2020.
The pattern was consistent as 2021 had a bull market, the period where Bitcoin, the father of cryptocurrency, even reached an all-time high of $68,789 back in November. Following this pattern, 2022 should be a bear market. And that is what we are seeing right now.
Based on this pattern, some crypto experts, enthusiasts, and traders believe 2023 and 2024 will be bull market years. In 2025, a bullish year for crypto, the pattern will resume. Bear again in 2026, bull in 2027, and bull in 2028. In 2029, the pattern cycle might recur, with bear 2030, bull 2031, and bull 2032 following.
Adjustments to Apply Considering the Pattern
Smart investors or holders buy low during the “bear market” and sell high during the “Bullrun peak”. So at the bull run peak, experienced traders suggest selling crypto assets. They added that, at this point, crypto-assets should be transferred to stablecoin, wait for the bear market, and eventually buy altcoins like ETH, BNB, XRP, ADA, etc. Some crypto analysts remind beginners to play safe so that in the next cycle, they can avoid 80 to 90% loss in their portfolio.
Other crypto investors believe in this pattern which is why they start to buy assets while the price is low. They either do that by utilising crypto exchanges like Binance or Coinbase, or brokers and intermediary platforms such as intermediary platforms. These companies offer access to the cryptocurrency market, trading software, and various other tools and resources to aid in crypto trading.
Looking at the Crypto Market Phases
Some crypto traders believe that one of the factors why we experience continuous crypto price decline is the occurrence of the markdown phase. But let us dive into that later because we should study first the crypto phase pattern as a whole.
The reason why crypto does not just go up forever is that markets are cyclical. The markets are cyclical because everyone who buys crypto sells eventually, and those who have already sold crypto buys again. Bitcoin and almost every other cryptocurrencies follow a pattern caused by cyclical buying and selling. And this pattern follows four phases.
Phase 1: Accumulation
The accumulation phase describes a horizontal price movement or up and down bounces. Traders are not yet aware of the crypto asset that nearly no one is aware of.
Phase 2: Mark Up
We might expect greater highs and lower lows over this period. Because people are talking about crypto assets, the trend in this phase is continuing to rise. Because of the social media frenzy surrounding cryptocurrency, more people are purchasing it. This stage is also known as price discovery.
Phase 3: Distribution
This stage occurs when the price no longer reaches new highs. The trend has shifted sideways and is progressively declining, implying that the number of people interested in purchasing cryptocurrency is decreasing.
Phase 4: Markdown phase
Many traders begin to dread losing at this time as the price continues to fall. It is the opposite of the second phase. We are currently at this moment. It is the stage where retail traders are constantly looking for the bottom. It returns to the accumulation phase after the markdown phase.
Following a massive sentiment-killing bear market, BTC will sit in a low volatility sideways accumulation zone at the lows as the big players scoop up as much cheap BTC as they can. However, they do not want to overbuy because getting more will thin the supply, thus driving prices up. It makes no sense for them to run the market up because that would require them to pay more for their BTC.
To keep BTC at the low level they desired, they must kill retail sentiment, preventing buyers from rushing into the market and driving prices up before they are ready to push BTC up. They will keep doing it until they have disenchanted retail buyers, killed sentiment, and promoted that crypto is dead again. Once the market has been driven down to the point where most investors have lost interest and capital, the big players will start accumulating at the lowest possible prices.
So What Does This Tell Us?
It tells us that the current situation of Bitcoin or cryptocurrency, in general, is just undergoing a phase, not crashing definitely. It will go up again once it enters the accumulation phase. We have not even started to enter an accumulation phase; we are still very much in the “bear market” markdown phase. Thus, you are not missing anything. Relax and make sure you have saved enough money for the extreme lows.
Now that the Bitcoin market crashed, many experts say there is no other way for Bitcoin but to go up. Crash does not mean a definite end. Instead, it is a mark of another stage or phase, which means we can wait for it to end before starting again. The bear market is just part of the cycle which will eventually end. Thus, the future of cryptocurrency does not end today; the future is still bright for crypto.