The bull market is coming! The season of unilateral rise is not far away. We are about to enter the second phase of this bull market (the parabolic phase) which will push our Altcoin to new heights! Let me take you through the latest developments.
If this is your first market cycle, you may have been exhausted by the dramatic market corrections of the past three months. Looking back at my first cycle, after seeing my Altcoin drop over 50% after the Bitcoin halving, I too thought it was all over.
But I was totally wrong.
In this article will include:
- A healthy correction in the crypto market
- The 90-day “dead zone” after the halving
- Selling pressure eases in third quarter
- Buying pressure increases in fourth quarter
- Let our Altcoin soar
Let's take it step by step.
1. A healthy adjustment in the crypto market
No asset can continue to rise without a pullback. Corrections are healthy and set the stage for building a strong bull market. Each cycle, $BTC gets rejected from its previous all-time high multiple times before a strong breakout occurs.
But why is this so?
Traditional investors sell and new investors buy.
In the process, $BTC moves from weak hands to strong hands. This is a very bullish sign! Investors who bought Bitcoin in the $50k and $60k range will not sell at $73k. They will hold their BTC longer with the goal of making huge profits.
Lately, whales have been buying heavily!
In July, whales purchased $4,000,000,000 of BTC at the fastest pace since April 2023. And now it’s the middle of the month!
As a result, the supply of $BTC on exchanges continues to decrease. Sooner or later, once buying pressure returns to the market, this will result in a supply shock that most people severely underestimate (more on this later).
First let’s add more bullish news!
2. The 90-day “dead zone” after the halving is almost over
History doesn't repeat itself, but it rhymes! Historically, Bitcoin and the entire crypto market have always faced significant corrections before and after Bitcoin halving events.
This period is also known as the re-accumulation phase, during which BTC changes hands (as mentioned above, traditional investors sell and new investors buy).
On average, the "dead zone" after the halving lasts about 90 days. And we're already 85 days old. But it gets better…
3. Selling pressure eased in the third quarter!
The market works very simply. The price of an asset is determined by supply and demand.
- Are there more people buying than selling? → Prices rise.
- Are there more people selling than buying? → Prices fall.
During the second quarter, BTC faced significant selling pressure. Who sold BTC in Q2, causing my position to fall?
- Bitcoin Mining Company
- Grayscale and BTC ETF
- german government
- Mt. Gox Fear Uncertainty and Doubt (FUD) Increases
Together, these events resulted in significant selling pressure on BTC. And Altcoin always follow Bitcoin’s movements.
The good news is that selling pressure is easing.
- Grayscale sell-off slows significantly
- The German government is out of BTC
- Bitcoin Mining Firms Sell-Off Is Almost Complete
- Mt. Gox will slowly refund creditors in the third quarter, rather than all at once as everyone thought...
In the third quarter, there will still be some selling pressure
But not as much as in the second quarter. Once the market absorbs these BTC and sellers run out, the price will stabilize.
But simply easing the selling pressure is not enough to push our position higher. We also need buying pressure. And we'll get it in the fourth quarter
4. Buying pressure increased in the fourth quarter
Who will push our position higher?
- US election
- U.S. interest rates cut
- Bankrupt exchange FTX refunds customers
This is very important, so let's do it step by step. The US market is a major player in the crypto industry. Therefore, the dynamics of the U.S. market and changes in crypto policy can have a significant impact on the entire industry.
In 2024, we are witnessing some crazy changes that even cryptocurrency industry veterans did not expect.
Cryptocurrency has become a key issue in the US election.
Trump calls himself the "crypto president," and the Biden administration quickly adjusted its anti-crypto stance after seeing the success of Trump's pro-crypto stance. Both parties are vying for the support of crypto voters. The future is promising!
The US election will be held in November 2024. As Election Day approaches, the situation will become more intense as the two parties strive to win the support of crypto voters. This will increase awareness of cryptocurrencies among all U.S. citizens, as well as those around the world who are watching the election.
They will attract more ordinary investors to enter the market.
Let's see the benefits!
As U.S. inflation cools, a rate cut becomes increasingly likely. The probability that the US Federal Reserve will announce an interest rate cut in September is 94.4%.
Interest rate cut = rising risk asset prices
After every interest rate cut, holding cash in a bank account becomes less attractive as the bank's annual interest will be reduced. The wealthy will rebalance their portfolios and increase exposure to risky assets, including cryptocurrencies. This will increase liquidity in risky markets such as cryptocurrencies.
So far, so good. But things will get better.
Another special factor will significantly increase the buying pressure in the fourth quarter: that is that FTX will start refunding customers in the fourth quarter!
A quick recap of what happened:
FTX was one of the largest cryptocurrency exchanges in the United States during the 2021 bull run. However, the exchange engaged in fraudulent practices that resulted in the loss of billions of dollars in customer funds in 2022.
In the fourth quarter, FTX will distribute $16 billion in cash to its clients.
Why is this good news?
Because most FTX users are big fans of cryptocurrency. It is likely that most of the money will flow back into the crypto industry.
This could lead to significant buying pressure.
5. Capital inflows will drive our Altcoin prices skyrocketing!
Let's look at this chart again. What do you see? Can you spot any patterns?
That's right! We are getting closer and closer to the second phase of this bull market, the phase of exponential growth. Once Bitcoin breaks out and hits new highs, it will bring our Altcoin with it!
It's just a matter of simple market dynamics.
Buying pressure is greater than selling pressure = rising prices
To summarize, the selling pressure eased in Q3 and the buying pressure increased in Q4, so...just a little more patience and we could have Altcoin prices soaring.
The only question that needs to be asked is, are you ready?
