In this post, I'll be providing an educational post on the cryptocurrency's market cycle, and how to overcome the fear of missing out, also known as fomo.
It's important to understand that the cryptocurrency market has very clear market cycles. In order to profit in the cryptocurrency market, it's important to think like a whale.
1. To begin with, whales keep their assets in the form of fiat, or tether (USDT) before the beginning of a market cycle 2. Whales buy Bitcoin with their cash at hand, and this is when we see Bitcoin rally alone 3. Since Bitcoin is the only cryptocurrency to rally, Bitcoin dominance soars up along with Bitcoin's price 4. However, the market trend soon changes as the whales, who have profited from Bitcoin, move onto large cap altcoins 5. These are our typical altcoins at the top 20 in terms of market cap 6. After these coins rally, capital then flows into the undervalued coins with a much smaller market cap 7. Because there isn't enough liquidity, these less popular coins tend to break out the hardest, and demonstrate immense risk 8. After whales profit from small cap alts, it's time to convert their assets back to Bitcoin 9. This process is repeated during a bull run, and ultimately converted to fiat in a bear trend.
So, what are we currently seeing in the market today?
Bitcoin - For Bitcoin, we are seeing a textbook bearish divergence - In my previous analysis, I have provided consistent updates, in which the divergences I have spotted, both bullish and bearish, have played out perfectly. - You can check the previous analysis above. - As such, it's reasonable to expect this divergence on the longer time frame to play out as well - The higher highs on the price, and lower highs on the Relative Strength Index (RSI) is extremely concerning - The Moving Average Convergence Divergence (MACD) also demonstrates decreasing bullish histograms, with a potential death cross in play
Does that mean we have missed the train? While Bitcoin may be done for the short term (since the uptrend is still intact, and we are seeing higher lows and higher highs on the longer time frames), but there are opportunities to be spotted in the cryptocurrency market.
Ethereum - Ethereum has been consolidating for a while on the weekly, and has been inactive on the daily - The Ethereum 2.0 Countdown just recently began, providing bullish stimulus for prices - Based on the market cycle theory explained above, Bitcoin's short term bearish signals suggests an opportunity for Ethereum to break out - Considering that Bitcoin dominance is trading within a downtrend over the long term, we could expect price action from Ethereum in the coming days - For my analysis on ETH's long term price action, check my previous analysis below:
Conclusion In summary, seeing everyone else make money while you sit on a pile of cash, might be frustrating mentally. But as I always emphasize, trading is a psychological game. Successful traders have a good understanding of the market psychology and cycles. As such, capitalizing on trading opportunities require a combination of proper knowledge and patience. There will always be opportunities, regardless of the market situation, as beauty is in the eye of the beholder.
idk about fear, but im crushing the missing out part of it.
Michael_Wang_Official
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@prefabsprout, Be patient. There's always an opportunity, and your time will come :)
seferRaziel
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agree. nice one. cheers.
its will be interesting to see if or how all the sealed indictments and NSA data will play in the near-term . if indeed we see full disclosure/DECLAS of these as rumored.
I think some of the high-utility cryptos are wound so tight right now that it may be hard to explain what happens in the coming months.
things are getting spicy.
Michael_Wang_Official
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@seferRaziel, Yes, the past few weeks have been absolute chaos in terms of thinking about causality in the market. Bad news, bullish moves. Who knows what's next? :) Thanks for commenting!
mirowais632
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You literally timed this wrong and fucked up, we are going up.
Michael_Wang_Official
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@mirowais632, Hi Eric. Yes, the bearish divergence did not play out, but that doesn't mean this is a bad post. At least not nearly as bad as the short signals you've been giving since 10k via @XForceGlobal. I recommend you follow me on tradingview. Maybe you'll learn a thing or two :)
@Michael_Wang_Official, Come to think of it, you assuming that was me is pretty sad, hes a supporter :O I’mactually proud that you are utilizing most of the secret sauce to a scalable account with pretty much all of the market psychology and factors to a good chart. Also love your detailed touch ups. It’s hard to be balanced when you’re trying to compete with yourself with pure technicals yet keep it simple for the general public to understand. Touché and keep it up. I ain’t mirin’. Followed!
mirowais632
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@Michael_Wang_Official,
😂
I have been following Eric since few months now. He called the shorts from 12k when everyone was yelling for higher. And followed it up with a long when everyone was waiting for CME Gaps to fill around 9.8k.
Looks like you are selective man. I found u because of the top posts and they actually look so similar i share with eric
Yes the short from 11k didn't went right owing to bullish news following. We took a long and closed in heaps of profits today.
Maybe you should join X Force bro...
We are a loving community.
Good Luck 🙂
realjesseboen
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@Michael_Wang_Official, you are spot on with your post and reply. I would just add that there are times that we have seen the bullish or bearish leg repeat them selves several times before turning completely turning higher time frame cycles.