Yesterday, BTC experienced a 91.2K drop and quickly rebounded to 94K, leaving a clear lower wick. This price fluctuation inevitably reminds us of the historical context of liquidity crunch in 2014, especially the sharp reversal that occurred at that time. Looking back at the situation then, we may now be standing at a similar historical juncture, facing the trough of liquidity crunch, and the dawn of a rebound may be approaching.
Reviewing the September Federal Reserve policy meeting, Powell went against the tide and cut rates by a hefty 50 basis points. Does this mean the Federal Reserve has detected the warning signals of liquidity crunch? In fact, the Federal Reserve's actions are always lagging behind market changes, but this lag effect often ends up affecting the market in return.
If we understand it this way, the recent statements from the Federal Reserve seem to imply that the tight liquidity situation has eased to some extent, and the market may even be about to usher in a major rebound. Uncontrollable surges that cannot be curbed by rate hikes are a sign of market overheating, while unpreventable crashes that cannot be stopped by rate cuts are the true signs of market collapse.
This is the principle of "negation of negation". If we compare the trajectory of BTC in 2024 with 2016, we will find that the current situation is extremely similar to the end of 2016 and the beginning of 2017.
As the philosopher said, history always rhymes, but does not repeat.
In the market, we hear many opinions, generally expecting a top in the first quarter of 2025, or perhaps a Double Top structure will form in 2025. This view reminds people of the market situation in 2021. But perhaps they have not experienced the 20-fold bull market from $1,000 to $20,000 in 2017. Maybe they have forgotten.
Just as a goldfish has a memory of only seven seconds, the memory of the "dumb money" is also limited to one cycle. In fact, 99% of the "dumb money" may never live to see the next bull-bear cycle.
The collective memory of the market also usually only lasts for one cycle. People often have a short-sighted view.
Looking back at history, 2011 was a single-top bull market; 2013 was a Double Top bull market; 2017 was a single-top bull market; 2021 was a Double Top bull market. Then what will the 2025 bull market be like?
The human brain is highly susceptible to the way facts are presented when analyzing and attributing. The facts themselves have not changed, but through clever narration, we often come to completely different conclusions.
Finally, there is actually a lot more that has not been written in, such as specific opportunities and specific decisions, which are often not something that can be summarized in an article.
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