I've Lost All Interest in Crypto. When Was the Last Time That Happened?
I've been reminded of some interesting times lately. A period of the 2018-19 bear market. What happened then?
What is this sorcery?
My morning routine. I wake up at 5 a.m., go to the bathroom, check the price of Bitcoin, and I feel like I’m the lead in the movie Groundhog Day! The one with Bill Murray and the same day repeating over and over again for an eternity.
I have been trading full-time for over six years now. It is (was) my primary source of income. I was obsessed with markets and squeezing every last cent from it. In the last few months, I have lost interest almost entirely.
I’ve made a few trades here and there, but they were mostly losers. It feels like I’m forcing myself to open trades these days. This is not the kind of market I like to trade, and with such low volatility, I believe it best to focus on other projects. The market will be back. The opportunities will return. When? Well, that’s what I wanted to talk about today.
Don’t take these projections seriously. We’re just playing around. I’m bored, remember?
First, a walk down memory lane.
After the initial success in trading, I was trapped in a prolonged bear market of 2018-2019. It was a horrible experience as I’ve gone all-in with trading, leaving my job and sinking everything I had into this game. Yes, the exact thing I keep shouting against.
At the time, I only knew how to trade bull markets. Those are easy. Everyone can trade them and make money with a bit of luck. When the winds change, that is when most give their money back. I was no exception, although compared to most, I did alright.
Still, it wasn’t fun, and that market was dead for two years. My money was trapped in some shitcoins and only lost value as time passed. I stopped trading at some point, as I had mostly given up, and there was nothing to trade for months.
We’ve been trapped in this hell of a bear or flat market for years in crypto.
I know some people are still earning record profits, some always are, but these are not good market conditions for the majority. I thrive in ranging markets, but none of my tight risk management strategies are making money this year.
The market seems confused. Heavy, but it doesn’t break down. It’s optimistic on good news days but can’t break up. All stops get double-hunted. It’s a mess out there.
I’ve been thinking that I haven’t felt this lethargic and apathetic about trading and crypto (mainly Bitcoin) in a long time. The last time was somewhere in here:
I can’t decide whether we’re at the 6,000 USD level or the 3,500 USD level in Bitcoin price terms.
We’re stuck in this range, and no one knows if the price will break down and tear everyone’s dreams up, or is it the last chance before we break higher?
Calm before the storm?
2018
2023 projection
The long accumulation?
2019
2023 projection
History doesn’t repeat, but it does rhyme from time to time.
Don’t take these projections seriously. We’re just playing around. I’m bored, remember?
It does feel like something big is going to happen sooner or later. If I had to bet, it would first be to the downside and only then up, but anything is possible. We can place those patterns on the charts in a million different ways, confirming our bias.
For example, pump imminent!
Comparing Bitcoin bear market (time).
No two bear markets and the following bull markets were identical. Time-wise, we should see a new all-time high within 12-18 months. It took 1,100-1,200 days from one all-time high to the next (test or breakout after a bear market).
We are now 900 or 700 days into this bear market, depending on which top you are counting.
I prefer the first touch of 65,000 USD and consider the second an overextended dead cat bounce. I don’t have a firm conviction either way, though.
2015/16 bear market
2018/19 bear market
2021-2023 bear market
Fundamentals and the big picture.
I don’t even know if it makes any sense to think about objective factors anymore, fundamentals, and whatnot, but here are some I keep in mind:
Bitcoin halving is projected to come in May of 2024. The price usually pumps in anticipation of the event. This “bear market” has been dominant for over two years.
Legacy markets have been bullish in the meantime, some of them reaching record highs, while crypto has done nothing. Concerning!
FED and other central banks have been raising interest rates this past year, and while it looks like they’ve eased off the throttle, I don’t see them cutting the rates anytime soon. I suppose this is the most important factor lately and the one to keep an eye on.
The economy is starting to show signs of fatigue, and let’s be honest - a recession is long overdue. The prices have gone into the stratosphere, and as we have printed our way out of trouble the last few times, we’re still facing high inflation (real inflation, not CPI). I’m noticing that more people are looking for jobs despite record-low unemployment, and companies have begun pressing the sales departments to increase sales. They’re seeing a significant drop in revenue. This isn’t universal, and I only have a small sample to judge from. Still, I feel it had begun.
I’m seeing some cracks in the economies of Europe. Germany is doing particularly badly; their insane policies have put them on a dark path. They’ve been in a recession for a while now, and things are not looking good. Someone is neutering Europe, and it’s not the resident boogyman from the East.
The real estate markets are still expensive, and with high-interest rates, things have slowed down in the last few months. There are a lot fewer mortgages being taken on, and sales have dropped significantly. I’ve even noticed some price drops, but any real effect won’t be noticeable for a while yet. Things move slowly in real estate. However, I expect a decline in sales and prices unless the interest rates drop significantly. A little birdy has whispered in my ear that more and more people are defaulting on their loans, but banks fear using a heavy-handed approach after celebrating record profits.
Logic would dictate that things would slow down and reset after such a long bull market and record prices. Logic and markets don’t always see eye to eye. Since the money printer is King, who the hell knows anything anymore?
Legacy markets are looking tired and heavy as well. I don’t suspect much in the way of sustainable new highs until FED switched its policies regarding interest rates. I’m just guessing here, but I don’t see them doing it for at least another year. Otherwise, what was the point of all this tightening?
My point is that I sense a change coming.
I’m not quite sure what form that will take. The halving and timing would encourage optimism, but the headwind presented by the weakness in the legacy markets suggests caution.
I still think we go lower before going higher, at least to about 20,000 USD per Bitcoin, if only to shake some bulls out and clear a path for a rise next year.
I am as bullish as I’ve ever been fundamentally.
However, I can’t see Bitcoin and the rest of the cryptocurrency market making any significant headway if the economy falls into a slump. After all, in the last two years, everything rose in price except Bitcoin and crypto. Something is amis.
I have two conflicting theories:
It’s being suppressed in front of the ETF acceptance (the conspiracy theory version - bullish).
It’s a canary in a goldmine warning us of some hard times ahead, which would be my guess (bearish).
This feeling of unease and disinterest tells me to stay alert, as we could simply be experiencing bear market fatigue.
I’m not ready to make any investment unless something big happens in the market - either a dump or a pump of significant value. Until then, I will focus on other projects.
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