The market may start an upward trend in the next month. Considering that the time overlaps with the bull market, this upward trend is likely to be the beginning of the bull market. However, it should be noted that the market trend is a continuous process and will not be achieved in one step.
1. The market has met the "fall long enough, fall too much"
An upward trend usually stems from a sufficient decline. Simply put, the market is a decline, bottoming out, and then rising. In terms of the decline, Bitcoin (BTC) fell from a high of $73,000 to a low of $53,000, a drop of 27.4%. Since 2021, due to the market's consistent bull market expectations, BTC's adjustment decline will not be as large as before. For example, in the second half of 2023, BTC's adjustment decline was only 21%. In terms of time, the adjustment time from March to July reached 4 months, which is shorter than before, but basically meets the requirement of sufficient time for decline. The decline of Altcoin is generally above 80%.
2. Technical indicators show bottom signals
At the $53,000 level in July, the RSI (Relative Strength Index) showed a daily oversold bottom divergence. The RSI oversold divergence has been the bottom of the daily level many times in history, with a very high accuracy rate. After falling to the 120-day moving average (MA120), the market quickly stood on MA120. I have systematically studied various technical indicators and conducted backtests. RSI and MA120 are relatively effective indicators.
3. The market is substantially strong
Why was BTC substantially weak at $70,000 in March, but substantially strong now at a similar price? If you have large funds or deep connections to get key information, you can influence the market. But for ordinary people, you need to check the corresponding trend of BTC based on major market events and broad views to observe the substantial strength and weakness of the market.
In March, ETF funds led the rise all the way, and there were a lot of good news in the market, and the overall bull market was optimistic. But the market stagnated at 70,000, and Altcoin peaked one after another. In July, there were German government sales of BTC, Mt. Gox compensation, and the US government's BTC movement. These were not only bad news, but also real selling pressure. After several months of weak market conditions, many people were bearish on BTC. But the actual trend of BTC shows that despite the bad news and huge selling pressure, the price of BTC is still around $67,000, so it shows substantial strength.
Other issues
Not enough time at the bottom
Indeed, the ideal situation is that after the decline on July 13, the price fluctuated at the bottom and fully changed hands. In the past, it took about 1-2 months. But BTC pulled up again after a short period of 1 week. I was a little hesitant about this. I noticed that BTC pulled up against the trend despite the negative news of the German government selling. There are two possibilities here:
1) The 53,000 level is not the bottom, it is just a rebound
2) There is money in the market to grab chips, because the BTC bull market is approaching, so the bottom will last for a short time
Considering other manifestations, the second possibility is more likely.
Uncertainty of trends
This time the uptrend is less certain than the last time, because there are several uncertainties that could affect the market:
1) The bottom does not oscillate for a long time
2) Mentougou still has more than 80,000 BTC distributed, and the US government's BTC also shows signs of movement
3) US stocks are at a high level, and it is uncertain whether they will adjust
Recommended operating strategy
In terms of operation, we will operate according to the most likely scenario, that is, according to the market that is about to start. I personally recommend holding 50%~60% of the position, and adding to the remaining BTC when it breaks through the previous high of $73,000. If the market trend is a low-probability scenario, you can add to the position during the second plunge. The biggest future profit will come from the Altcoin after the main BTC uptrend. The first stage of BTC holdings cannot expect too high a return.
Finally, there are still many things that are not written down, such as specific opportunities and specific decisions. These things are often not something that can be summarized in one article.
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