Surviving the Hardest Phase of the Bull Market: Proven Strategies
Well, friends, we are now entering the most challenging phase of the bull market. This phase can be compared to the hardest phase of the bear market, and now I will try to explain everything in a few words.
The Hardest Phase of the Bear Market: Example from 2022
Understanding the Difficulty
Let’s start by explaining the most difficult phase of the bear market, and I’ll use the bear market culmination in 2022 as an example (I won’t compare it to the previous bear cycle, as 95% of my audience didn’t live through it and weren’t familiar with cryptocurrencies at the time).
What Made June to November 2022 So Challenging?
What was the difficulty of the hardest moment of the bear phase in 2022? From June to November 2022, the predicted market cycle bottom formed, supposed to transition us to the bull phase. The stock market in November 2022 had already begun a steady uptrend, triggered by a weakening dollar index (it went into a steep dive) – it was logical to expect the same uptrend in the crypto market, but it didn’t happen. A strong fundamental factor interfered: the collapse of top crypto exchange FTX, causing a new cascade of crypto falls. A new bottom began to form, marking the hardest point of the bear market phase.
The Impact on Investors
Why, in my subjective opinion, was that the hardest moment in the bear phase of the market? First, everyone who hoped to have caught (the bear by the beard) and went 100% into the market from their deposit received another strong dump plus a huge wave of FUD and scare stories in the media.
I personally remember the moment when I read a tweet from ICT (the founder of the Smart Money trading concept). This is a very respected person in the media space, and I personally idolized him until his then tweet – quoting *Bitcoin will first fall to $10k, then lower, and then it will go to zero. It was at that moment that I realized how painful the market was.
Although altcoins didn’t significantly move down with Bitcoin, it was still a very difficult moment in the market.
What is Smart Money? Read more
Prolonged Market Stagnation and Psychological Impact
Adding fuel to the fire was the fact that after the fall, we were stuck in a sideways range for 62 days. 62 days of pain, FUD, and suffering. Bitcoin was moving within a range of ±$200 for weeks, volatility was extremely low, the market was completely frozen, people were massively withdrawing their cryptocurrencies and stablecoins from exchanges, or in complete despair, selling them. It was a true capitulation in all its glory.
These events broke the crowd’s psychology, making people believe a new wave of falls awaited instead of buying more. If we rewind a bit to the summer – I then wrote an article in Forbes, with a comment and a broadcast of the actions I would take in the future – there I clearly wrote, all prices below $20k per Bitcoin are still attractive prices where it should be bought.
As we see now, I wasn’t wrong. We started showing our Bitcoin purchases, averaging $17,200 per BTC. People questioned why we bought then instead of waiting for $10k per BTC. Now I think you understand what I meant when I wrote that it was the hardest point of the bear market cycle. And this whole story fits nicely into the market cyclicality and the big 4-year cycle – Bitcoin found its bottom 500 days before the halving.
Current Situation: Entering the Hardest Phase of the Bull Market
Comparing the Phases
Now let’s move on to the present time. Why, in my subjective opinion, is the market entering the hardest phase of the bull cycle, and why I have repeatedly emphasized that the bull market is psychologically more challenging than the bear market.
The Challenges Faced by Bitcoin and Altcoins
Bitcoin, since the hardest phase of the bear market, has grown by approximately +380%. The halving has recently taken place, but where is the miracle that everyone expected? Where is the parabolic growth that attracts new players to this market? The launch of spot Bitcoin ETFs has occurred, and institutions are bringing in tens of billions of dollars into crypto. But where is the growth? Why do altcoins still look like dead cats? Maybe this is already the end of the bull market, Bitcoin has nothing left to grow on. Everything now doesn’t look as new investors in the crypto market imagined. Let’s break it down.
Market Cyclicality and Predictions
After the Bitcoin halving, a new all-time high within the framework of the 4-year cycles was set approximately 500 days from the moment of the halving itself. Just as the bottom was set within the same cyclical history – approximately 500 days before the halving.
The Psychological Impact During the Hardest Phase of the Bull Market
Why is now the scariest emotional phase of the bull market – it’s simple, Bitcoin is at all-time highs, while dominance continues to grow, and the crowd is neck-deep in altcoins, which are putting their deposits into big minuses. Here is your first lesson, Bitcoin should always be in your portfolio, and it doesn’t matter that you can’t buy a whole BTC – this asset will help you withstand market fluctuations, but that’s not the story here. Many of you believe in the continuation of the bull cycle – but are you ready to see drawdowns in your portfolio during the bull run? Good question, isn’t it? This is to say that it doesn’t matter if you believe in further growth or not – but you are very likely to be shaken out of the market and made to believe that you were wrong in your judgment about the bull run.
Seasonal and Regulatory Challenges in the Hardest Phase of the Bull Market
In addition, we have entered the least favorable phase of the market – summer. During this time, there is a high probability that nothing interesting will happen in the market, and on the contrary, there will be more scare stories in the market + as it happens just before the culmination, there is a very high chance that the final shakeout from the market will occur.
Maybe this will happen on some fundamental news. Maybe it will be a new law in the USA about taxing Bitcoin miners, which the Biden administration is actively pushing. We will be given a lot of pain and suffering again, and not everyone will survive (as crypto investors). The fewer passengers on the rocket, the easier it will fly – that’s what big capitals really need. Even more emotional pain is added by the fact that you have already been given a taste of fresh air on the market and have seen some gains in altcoins – and you are very likely not to have fixed your profit, which you could have seen on your balance not so long ago.
Key Takeaways for Investors
The main thing you need to know now is that within this 4-year cycle, only about 200 days after the halving, we will be able to observe the beginning of a stable downtrend in Bitcoin dominance. At this point, altcoins will start to come to life again – but until then, paper hands will be shaken out of the market. Also, don’t forget that Wall Street has entered the game, and they won’t leave this market without their super-profits. In reality, everything now indicates that the cycle continues to follow the norm.
The US economy shows decent growth dynamics, albeit due to government manipulations and the sidelining of the Fed and their fight against inflation. There are significant problems in the US economy, but they will deal with them later – after the elections. Maybe not immediately after the elections, but even later, which in general fits into the framework of the same financial market cycle. So, be patient, friends. You still have time to correct the mistakes you make in forming your portfolios. And remember, we are in the riskiest market – the cryptocurrency market. You also need to always have a reserve of stablecoins on hand, both in the bear and bull cycles. Only those who have nothing to lose or those who don’t have enough knowledge in this area go all in.
Conclusion
In other words, surviving the most challenging part of the bull market is all about knowing the market cycle and the psychological problems related to it. This year’s most difficult phase has been the bear market in 2022, and a comparison manifests investment decisions and shows how market events affect investors’ sentiments and behavior.
The bear market experienced in the year 2022 made investors undergo such stagnation for a long time, Fomo, and sharp drops brought by media and market sentiment. This has been a real test for many, and one should never forget this phase of why strategic buying and long-term thinking are necessary.
Now, even the bull market brings its challenges. Despite the expected substantive growth of Bitcoin post-halving, there is a lack of expected parabolic growth. All this uncertainty and emotional stress ends up persecuting investors’ minds. With factors of cyclicality in any market, seasonal and regulatory challenges make this phase tough.
An investor needs to be updated, have a risk management system, and have emotional strength. Portfolio diversification with having some balance in stablecoins goes quite a long way. Understanding the natural course of such market cycles and that patience is needed to overcome the same helps to navigate this somewhat tricky situation.
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Frequently Asked Questions (FAQs)
What is a bull market?
A bull market is a financial market status in which asset prices are rising or expected to increase.
What are the phases of a bull market?
Indeed, a bull market has multiple phases, starting with the introductory growth phase, then the accelerated growth phase, and finally, the stabilization phase.
What are the possible tactics in order to minimize risks within this stage?
Some of the major approaches discussed are; Investing across sectors, holding stablecoin assets and not to hold large absolute sums in a single coin. Also, being more cautious and monitoring the developments in the market or changes in the legislation may act as a safeguard measure.
Why is the hardest phase of the bull market so challenging?
It turns out to be high volatility and high psychological pressure, and there is a lot of uncertainty.
How do you handle the most challenging phase of a bull market?
Reduce risk through diversification and hedging strategies.
With regards to the toughest phase in the bull market, what is the role that market cycles take?
Market cycles are cyclical and fluctuating or rising and falling like a roller coaster. This insight is important to investors as it enables them to understand the changes that come with such cycles. It is important to understand that all markets goes through cycles and therefore this gives hope and patience during difficult phase of the bull market.
What psychological features should I remember at this stage?
Keep emotional strength and long-term thinking to make informed decisions about investments.
What are the mistakes to avoid in the most challenging bull market phase?
Do not be overconfident, and do not underestimate market volatility.
