Looking back at Bitcoin's four bull markets, these experiences can help you avoid being repeatedly cut like leeks

Compiled by | Neicanjun

The so-called "experts" of Wall Street are creatures of habit. Their behavior patterns are as predictable as the tides.

When a market soars into bubble territory, they pop up from all corners to cheer on the “powerful fundamental forces” that are driving prices higher.

They rush to predict the bubble’s demise when it inevitably bursts, and they immediately publish last rites as a whole new bull market takes shape.

People's understanding of Bitcoin is still not very clear. Cryptocurrency is a much-criticized asset. Some people say Bitcoin is the "mother of all bubbles" and others say that crypto technology has no future.

Few "experts" will tell you that markets and market analysts are subject to cyclical laws.

Bitcoin, after a huge bull run, culminated in a wild parabolic speculative climax we call the “high.” When speculators retreated in panic, the market crashed.

And it will continue for several months, forming a sideways trend or a further downward trend from which only the die-hard believers can survive, until it next starts a new bull market, repeating the cycle and ending with a launch climax again.

Just eight years ago, Bitcoin was trading at nearly 6 cents in September 2010. Today, the same asset trades at $3,700 per token, representing a return of more than 60,000 times.

Looking back at the four bull markets Bitcoin has experienced since its launch, going from 6 cents to thousands of dollars is not easy, and it is not a straight line. But that’s the point: it happens in a cyclical pattern that is ultimately predictable. There are a lot of lessons to be learned!

The first bull cycle

September 2010–June 2011

Bitcoin began the cycle with a strong but non-parabolic rise, from 6 cents to 80 cents by April 2011. Prior to this, Bitcoin’s rise was driven primarily by Bitcoin users and long-term investors who understood the technology and shared the founder’s vision.

Then, all of a sudden, regular investors started piling in. But the market was still small and illiquid, and couldn’t accommodate a large number of people.

As a result, the price of Bitcoin skyrocketed, with Bitcoin literally taking off, surging from 80 cents to a high of $36.

Bitcoin then plunged 93%. And just like today, the naysayers emerged again - talking about "a failed experiment" and "the death of Bitcoin".

The second bull cycle

October 2011–April 2013

As in previous bull cycles, Bitcoin surged from a low of $2 all the way to around $10, a five-fold increase.

Investors who bought early in the previous cycle and held on for the long term (nicknamed “HODLers”) are happy. However, those who bought at $35 during the previous cycle’s crazy run-up are still frustrated.

The mania would return in early January. The king of cryptos broke $13 and began accelerating upwards again, exploding to a bubble high of $260 in April 2013.

Total growth from bottom to peak: about 13,000%. But again, the vast majority of this crazy rise was squeezed into just two months, from February to April 2013.

This frenzy brought even greater anger to investors. In less than a week, the price of Bitcoin fell back to $50 on April 15, a sudden drop of 80%.

The third bull market cycle

April 2013 to December 2013

As always, the rebound from the April low of $50 was initially slow, reaching the $100 level on October 1, 2013.

As before, it was the last two months that brought the huge price explosion: reaching $1,160 by December, a surge of 1,160%.

The irrational exuberance affected not only ordinary investors but also the media, which raved about crypto… until the next bubble burst and Bitcoin had its longest bull run at the time.

Bitcoin fell 87% from a high of $1,160 in December 2013 to a low of $150 in January 2015.

The bear market has been so long and so deep that Bitcoin evangelist Andreas Antonopoulos said he is worried about the future of crypto.

But as before...

Even at the bottom, investors who bought at the beginning of the cycle still tripled their original investment.

Furthermore, this was the beginning of Bitcoin’s biggest bull run ever…

The fourth bull market cycle

January 2015–December 2017

It took Bitcoin several years to recover from the major bear market of 2014.

Then, the big move would begin in 2017 as Bitcoin surged from around $1,000 in January to around $5,000 in October.

However, like the three previous cycles, it wasn’t until the final two months of the bull run that the public began to fully commit. Prices soared. By December, Bitcoin soared to a high of nearly $20,000.

Of course, a crash inevitably followed, with Bitcoin falling to $5,800 on February 6, 2018, a 70% drop, before falling to $3,600 a year later.

Many analysts unfamiliar with previous bull cycles have suggested that this appears to be a “new phenomenon.” But as you can clearly see, it is anything but.

It's a feeling of déjà vu.

Compiled by | Neicanjun

Article source | THE DAILY HODL