Source: Talk Li Talk Outside
In the previous article of Talk Li Talk Outside, it was mentioned: We continue to maintain our personal expectation (guess) that BTC will reach a price of $100,000-$120,000 in this cycle, but with Trump's victory leading to a rapid breakthrough of BTC's historical high, coupled with the positive measures Trump may take against the crypto market and the continued rate cuts by the Fed, we even believe that BTC may reach as high as $150,000 next year (2025).
However, even so, when BTC officially broke through $100,000 on December 5th, I still sold off 10% of my position according to my original plan, because I will strictly abide by my own trading discipline. As shown in the figure below.
Then, a friend left a message asking: I was just about to buy, and you started selling? Can I still buy BTC now?
This question may need to be answered on a case-by-case basis.
As Hui Sister said in the group yesterday: Don't ask me directly whether to buy or sell, this is not a decision that others should make.
Or as Boss Heng said in the group yesterday: It depends on how you consider it. Assuming this bull market will rise to $150,000 and the bear market will fall to $50,000, and the next bull market will rise to $250,000, as long as you are willing to ride the roller coaster, then holding on completely is not a problem.
In fact, many people are unable to make trading decisions, which ultimately comes down to their own confidence in the market (or the underlying asset) and their own position management (including capital allocation, investment portfolio, goal setting, execution cycle, risk management, etc.).
In short, money can't be earned forever, but it can be lost completely. If you want to lose money in a bull market, you can easily achieve it by doing the following:
- Lack of focus
In a bull market, many people will forget their original goals or trading discipline, and then see what story is hot, and chase in to buy it, trying to seize every market opportunity, the result is often becoming the bag holder for others.
- Failure to take profits
Once in a bull market, many people will be influenced by various news, and many KOLs will also tell you that the bull market has just begun, and you just need to immediately buy the various tokens they recommend. But we need to learn to revere the market, the bear market has no bottom, and the bull market has no top either. If you are lucky enough to make money, then you need to take profits in batches according to the plan, some of the investment can be realized and used to improve your life, and some can be kept for the future.
- FOMO
Almost everyone knows that they should not let themselves fall into FOMO, but it seems to be easier said than done. In a bull market, there are too many temptations attracting people all the time, one moment a certain project has multiplied several times, the next moment the neighbor has become rich again... Then you can't help but chase those so-called opportunities in front of you, but the result is often: others buy and it goes up, but when you buy it goes down.
- Excessive trading
In a bull market, because of the irresistible temptation, many people will unconsciously destroy their position management investment portfolio, and may even imitate others' operations without thinking. But in fact, the more frequent your trading, the more complex your trading process, the more difficult it will be to execute. That is to say, your excessive trading will lead to a decrease in your final returns, an increase in trading fees, an increase in trading slippage... At the same time, it may also lead to the bad habit of revenge trading.
- Lack of patience
In this cycle, we ourselves have been investing in BTC since 2022, and it was not until this month (December 2024) that we made a 1 time selling operation according to the plan, a process that took nearly two and a half years. And during this process, I myself rarely watched the market closely, basically only when I needed to write articles, and most of my time and energy was spent on writing articles and content output.
Often, trading requires a certain amount of patience, and trading is often against human nature, because an impatient mindset will cause you to give up trading too early, and the more you are obsessed with the price every day, the more likely you are to lose your position.
- Ignoring risks
For example, in trading, many people will not be able to resist the temptation, and will chase the profits they have already realized again to some Altcoins, often ignoring the greater risks they may face.
Another example is that some people simply resort to quackery, friending strangers and being willing to follow the so-called teachers to operate, and end up being scammed. Remember, no matter what stage the market is in, the risk issue should always be given priority, otherwise you may lose everything in a short period of time.
In short, if you want to lose money in a bull market, just do the above. On the contrary, if you want to make money in a bull market, you need to overcome the above problems as much as possible.
Next, you can continue to think about a few questions:
Over the past two years, many people have believed that this bull market is most likely to occur in 2024-2025, and BTC is most likely to rise to $100,000. So, with BTC rising from around $15,000 to the current $100,000, a 550% increase, have you made money?
Although many people now also believe that BTC may continue to rise in 2025 and may even rise to $150,000, so the question is, will you buy BTC now?
Suppose you buy BTC now, and the market experiences a pullback, can you hold on and not sell? Do you dare to continue to add positions during the pullback? Will you set a stop loss plan? Or at what level of pullback will you consider stop loss?
Do you really believe that BTC will rise to $1 million in the future?
Perhaps many people have not carefully thought about such simple questions as the above, because they always hope to find a universal answer or definitive conclusion from others. But as we said in our previous article, any so-called forecast is only a probabilistic thing, the key thing you need to do is not to ask others directly for a definitive answer, but to figure out how much you are willing to pay for certain probabilities.
Take the example above, if there is a 90% probability that BTC will continue to rise to $150,000 in 2025, how much risk (how much capital to invest, how long the investment period) are you willing to take on for this 90% probability?
Some may be willing to pay 10% of their net worth for this, some may be willing to pay 100% (even with leverage), and some may still believe that BTC is a scam and won't buy it...
But if you believe that BTC has a chance to reach $150,000 next year, and you are also willing to make some sacrifices and take on the corresponding risks, then you should go and understand BTC and the market now, because only when you understand it yourself can you really hold on.
In the previous article on the Ethereum topic (December 6th), we mentioned some factors affecting the price of ETH, some of which are macroeconomic factors that also apply to BTC (and even the overall crypto market trend). Next, let's continue to give you a breakdown of BTC from the four dimensions of time, macroeconomics, demand, and on-chain!
1. From the time dimension
From the current price trend of BTC, it seems to still follow certain historical patterns, closely related to past cycles. If we directly compare the previous two bull markets and the current one, we can see some basic rules. As shown in the figure below.
History does not repeat itself, but it often rhymes. If we carve the boat according to the comparison chart above, then it seems that we are now entering the most explosive price acceleration stage (the middle and late stage of the bull market) of the bull market cycle.
Of course, we have only looked at the comparison of historical cycles. If you also want to get more reference from the time dimension, you can consider referring to the article we published last month (November 18) through the talk outside the talk: 15 Reference Indicators for Escaping the Top of the BTC Bull Market.
2. From a macroeconomic perspective
The bull market in 2021 was partly due to the global liquidity changes caused by the pandemic, and this round of the bull market also has some similarities with the previous one in terms of liquidity. BTC seems to have become a global macroeconomic asset, and in addition to the four-year cycle and halving driving the price, the correlation between global liquidity (loose monetary policy) and BTC price is also becoming stronger and stronger.
From the current Fed policy, interest rate cuts are expected to continue until 2025, which will further create a relatively favorable macroeconomic environment for risk assets (including crypto assets). As shown in the figure below.
3. From the demand perspective
Take the well-known MicroStrategy as an example, they announced a financing plan called the 21/21 Plan in October this year, planning to raise $42 billion in new capital over the next three years to buy BTC. As shown in the figure below.
This will further impact the demand for BTC. In addition to MicroStrategy's own continuous and active buying power, their actions will also attract more capital to join this field.
In addition, we should not forget the BTC ETFs, US spot ETFs currently hold more than 1.1 million BTC, which has exceeded Satoshi Nakamoto's wallet, as shown in the figure below. And the approval of ETFs has been less than a year, which seems to be just the beginning.
Perhaps in the past, some people might have used the threshold of buying BTC or the high price of BTC as an excuse, but now, people in the traditional financial field can easily buy BTC ETFs (IBIT, FBTC, GBTC, etc.), which will further stimulate the long-term demand for BTC. As shown in the figure below.
4. From on-chain data
Through on-chain data, we can intuitively find that the demand from retail BTC investors is surging, reaching the highest level since 2020. As shown in the figure below.
With BTC breaking through the psychological barrier of $100,000 this month, the crazy reporting by the media seems to have once again ignited the attention and buying demand of retail investors, who appear to be increasingly interested in BTC.
For old hands, the large-scale entry of retail investors often also means that long-term holders may start to take profits, but in this process, the market will usually also continue to welcome the most crazy moments. The current breakthrough of BTC above $100,000 is just the beginning of attracting retail investors, and we are still some distance (time) away from the theoretical bubble of this round. Perhaps around $150,000 will become the threshold of the bubble in this round.
Next, we should focus on monitoring the activities of retail and institutional investors. The strong enthusiasm of retail investors often indicates the maximum degree or intensity of the market's optimistic sentiment, while the interest and dynamics of institutions determine whether they can provide a power base for sustaining this sentiment. Remember, in the end, only a small portion of people in this market can make money.
As for Altcoins, let me add a word at the end of the article. We still maintain our previous view: the large-scale entry of retail investors, the rotation of the Altcoin sector, these performances are often one of the signals that the bull market is entering the middle and late stages. If you don't want to lose money in the bull market, then you should adhere to the most basic principle of "don't touch what you don't understand, preserve your capital". DYOR, don't chase highs, don't use leverage, or simply don't touch Altcoins.
