Based on a summary of several bottoming patterns in this cycle, we will conduct some fundamental analysis (long article warning):
1. Reason for the bottom formation between August 17, 2023 and October 16, 2023: Tesla sold BTC.
Duration: 60 days; Number of bottoming attempts: 10; Reason for bottoming out: SEC's Official Twitter was hacked, and news of the approval of the BTC spot ETF was posted; Maximum drawdown: 21.85%
Cumulative increase after the bottom was reached: 196.53%
2. The reason for the long-term oscillating correction structure from June 10, 2024 to October 29, 2024: The German government sold BTC.
Duration: 140 days; Number of instances of price manipulation: 34; Reason for end of the oscillation: Trump's election winning probability surged; Maximum drawdown: 33.56%
Cumulative gain since the end of the consolidation phase: 120.98%
3. The structure from February 24, 2025 to May 1, 2025 was formed due to: the start of the trade war and Trump's introduction of tariffs. Duration: 66 days. Number of instances of tariff manipulation: 12. Reason for the bottoming out: a comprehensive extension of tariffs. Maximum drawdown: 31.95%.
Cumulative gain since the bottoming process ended: 69.71%
4. Reasons for the long-term correction and oscillating market structure from November 4, 2025 to the present: There is no clear landmark event (October-11? Repeated expectations of interest rate cuts? Resumption of trade war? US government shutdown?).
Duration: 44 days so far; Cumulative number of times the gate was drawn: 18; Reason for ending at the bottom: Not yet known if it was at the bottom...
Maximum drawdown: 36.24%
Cumulative gain after the bottoming process ended: ? ? %
Summarize:
Q: Why is it necessary to summarize the bottom or long-term oscillation structure of this cycle?
A: Fans want to know how the current fluctuations differ from the bottoming structures of all the current cycles?
Conclusion: The current sharp correction and prolonged fluctuation we are experiencing are significantly different from the three previous structural corrections.
1. The start of a downtrend wasn't due to a single, major negative event, but rather a series of seemingly insignificant events that ultimately didn't materialize. For example, expectations of an interest rate cut decreased, but one was eventually implemented; the trade war faced the risk of recurrence, but was ultimately postponed...
The US government shutdown prevented the Treasury Department's TGA accounts from releasing liquidity, but the market remained unchanged after the government resumed operations...
A clear phenomenon is that the market lost focus on the negative events during this process, making it impossible for people to concentrate on any particular event; attention was scattered across various angles...
When negative news accumulates rapidly in a short period, people become unable to analyze specific events and are simply enveloped by a general emotional atmosphere. Therefore, once these negative events have ended, the emotions are often irrecoverable...
2. The largest pullback accumulated so far in this correction is the largest in this cycle, which has caused the weekly chart to fall below the historical bull market lifeline MA50. In other words, the overall cooling of sentiment mentioned above has led to a self-reinforcing expectation being realized in the technical aspects.
Poor sentiment itself isn't too fatal, after all, sentiment was also very poor during the past three corrections. Once the sentiment eases, prices can continue to rise.
However, this cooling of sentiment occurred against the backdrop of October 11th. After a large number of market makers left the market, the overall market liquidity was unable to absorb the same level of sentiment fluctuations, which led to the technical breakdown.
However, the technical breakdown actually increased the floating supply, which suddenly reversed the direction of a spring that had been compressed from above, causing it to loosen downwards.
3. Lack of a clear, widely disseminated positive narrative or positive expectation.
The market is no longer expecting anything. Cryptocurrencies are a multi-factor fluctuation system driven by liquidity and sentiment. This correction is unlike previous ones, which simply hit sentiment or liquidity.
This first impacted market liquidity, and then it dampened market sentiment...
Therefore, the helplessness, despair, and even the slogan "Crypto is dead" among market participants today all stem from this double collapse.
Finally, how can we anticipate the signs that this bottoming structure is about to end?
My personal opinion:
First and foremost, liquidity is the key factor. If the issuance of stablecoins can continue to grow at the same rate, then liquidity will not be the biggest constraint. People are simply unwilling to convert their money into risky assets, which does not mean that people are actually short of money.
Currently, the trend of stablecoin issuance has only been paused for one week. Historically, it takes more than four consecutive weeks without any new issuance to be considered a complete halt.
Secondly, there's the sentiment aspect. A positive sentiment outlook is characterized by the emergence of a certain profit-making effect in the primary market, while the spot and contract trading volumes in the secondary market gradually increase (with the increase in open interest).
Currently, trading volume has not increased, and open interest has not shown a clear upward trend.
Therefore, we can conclude that:
The current market liquidity is not very bad; what people have lost is their hope for the future and the expectation that the bear market has finally arrived. Everyone's risk appetite is decreasing, and the increasing popularity of wealth management and fixed-income products is a signal of this.
To end this situation, the market needs a bigger narrative, but it doesn't seem to be one at the moment...
If this situation continues, it will lead to a vicious cycle where sentiment hits technical indicators, and technical indicators continue to hit sentiment, until all potential supply is fully released in the bear market.
Staying vigilant and watching for any new narratives in the market is the primary goal right now; until then, just hold on!
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