BTC. Growth phases, cycle measurement and reaching $100,000 in 2021-2022 for BNC

Bitcoin has experienced 4 booms and busts in 10 years of its existence. At the same time, in 2018 alone, he was buried 90 times already. The regularity is impressive, but it is not accidental. Market cycles govern any market, be it traditional or cryptocurrency. In short, one market cycle is a rise in price (uptrend or bull market) and its further fall (downtrend or bear market).

What will be the new all-time high of Bitcoin in this bullish trend? Analysts at the Kraken cryptocurrency exchange are confident that the $98,000 zone may well become a long-term goal for investors, but after reaching it, a bear market may soon begin. This conclusion was made based on a comparison of the current growth of the cryptocurrency with its dynamics in previous cycles. Let’s talk about this important study in more detail.

On Thursday, May 5, the crypto community celebrated another mini-anniversary for Bitcoin : Cryptocurrency is exactly half way to its next halving. This happened on block number 735,000, which was mined by the Poolin pool with an income of 0.16215354 BTC or $6402.45 in commissions. Halving in the Bitcoin network occurs every 210 thousand blocks, that is there are a little less than 105 thousand blocks left until the next such event. Let’s talk about the situation and its importance in more detail.

Investment time or unjustified risk?

A bear market or a trend is a state of the market when the price of most currency pairs is declining. Most traders are set to sell currencies in order to fix profits.

Figuratively speaking, “a heavy bear pulls a rope with a cryptocurrency down with its paws”, which leads to a fall in the price of a coin. And this is the very stellar time when you can diversify your portfolio and enter the crypto market. So, relatively recently, I talked with a familiar investor and asked if he was currently investing in startups, to which he replied that now is the time to invest in crypto and all other tools are much less profitable. Therefore, my recommendation is to take a closer look at cryptocurrencies as a way to expand investments and, thus, manage risks wisely.

How to recognize the transition to a bullish trend in time?

In a bull market, investors are more confident about the future, as they expect further price increases over time (although it is actually quite difficult to predict trends). The key factor influencing the formation of a new bullish trend remains the growing acceptance of bitcoin and other coins as means of payment, investment assets, the use of blockchain technologies and applications in new areas of business. As well as legislative and tax changes, which entail an instant market reaction.

ONCHAIN ​​CHARACTER

In a bear market, interest in Bitcoin usually wanes, and by the end of it, only avid Bitcoin maximalists, smart money and miners remain. They all have the same goal: to accumulate as many bitcoins as possible.

As far as on-chain data is concerned, the patterns and fractals that we see in bear markets are largely determined by these holders. The chart below shows the accumulation of long-term holders and the change in the graph during the most difficult times.

A bull market is a completely different matter. The dynamic between supply and demand is in constant flux as new speculators and old hodlers compete for block space, profitability and test their resolve to get through epic price increases. In a bull market, the oldies usually start selling their expensive coins into the hands of the new speculators (who return the favor to the bears by selling cheap coins at a loss to the hodlers).

BITCOIN SUPPORTERS AND SMART MONEY

Both tend to have similar working methods. Their incentive is to accumulate as much BTC as possible and profit at the end of the bull cycle (if possible). Thus, their total holdings rise during bear markets as BTC is hoarded and sent to cold storage.

We can see this in the HODL wave metric when the older bands (cold colors-shades of blue) increase in thickness, indicating that the coins are in strong hands. The thicker these cold bands become, the more coins long-term holders have.

Conversely, as old coins are spent, they flow into young coins (warm colors-shades of yellow) with a corresponding increase in the thickness of the young HODL wave. Typically, coins from smart money wallets are only spent at the end of a bull market, and when younger age groups start to increase in size, this could indicate a change in macroeconomic sentiment. Please note that coins older than five to six months are generally considered HODL coins.

Age ranges give an idea of ​​the age distribution of all coins spent on a particular day. The table below has been filtered to only show coins older than one year, indicating hodlers. We see that old coins tend to be spent mostly during periods of high volatility, in particular:

Also notice how in the current bull market the spending of old coins has slowed down recently. This suggests that market participants prefer to hold rather than spend their assets.

The older the coin, the more coin-days it will accumulate, and when it is spent, these coin-days are “destroyed”. Coin Days Destroyed (CDD) tracks the total amount of coin days destroyed each day. We can use this metric to monitor macroeconomic spending patterns and changes in the behavior of long-term holders.

The more Bitcoiners there are, the less old coins are spent, and CDD tends to be low. In the later stages of the bull market, old coins are increasingly spent for profit, which leads to a sharp increase in CDD. Applying a long-term moving average (eg 90DMA) can help smooth out the noise and reveal these macro shifts and even bring market tops and bottoms closer.

Short-term speculators

It is well known that Bitcoin’s volatility is created to “shake out weak hands”. The market often rewards long-term holders who are patient and punishes more inexperienced market participants and late bull cycle participants. Long-term holders recognize this and tend to wait for the market hype to peak before making a profit on expensive coins.

This creates a cyclic transfer of Bitcoin value.

As hodlers sell coins to new hands, the supply of young coins will grow in volume. Waves of the HODL Realized Cap is the perfect tool to track this transfer of wealth by increasing the supply of young coins. In the chart below, you can see that in the later stages of the 2013 and 2017 bull markets, the height of the young coin (warm colors) bands rose on three different occasions. These peaks largely coincided with major rallies and corrections.

In the current bull market, we have witnessed the first major surge in the supply of young coins. Interestingly, the warmest colors (the youngest coins) did not reach such a high level in this cycle. This probably reflects two phenomena:

With this transfer of value in mind, we can observe the share of the supply of old coins (1-2 years, blue) and compare it with the supply of young coins (1 week to 1 month, orange).

At the end of the bear market (green zones): supply of 1-2 year old coins is the maximum, and young coins from 1 week to 1 month is the minimum. This is the accumulation of holders that we talked about earlier.

At the end of bull markets (red zones): the supply of 1 week to 1 month old coins is relatively high (as more new speculators appear), while the supply of adult coins has decreased significantly due to the sale .

Using this observation, we can construct a Realized HODL Ratio (RHODL) that shows the ratio between coins a few years old and young coins (1 weeks old) in the form of R waves. HODL and creates a cyclical oscillator that accurately tracks mood on the market.

This indicator describes the cyclic nature of value transfer events.

At the peak of a bull market, old hands sell coins to new hands, increasing the liquidity supply (maximum new holders, high RHODL).

At the bottom of a bear market, more experienced players buy back most of the coins from newcomers to the market, reducing the supply of liquidity (maximum strong hands, low RHODL).

MINERS

In the final part of the study, we will take a look at the miners (PoW). Miners are some of the biggest bulls in the field as they have invested heavily in ASIC hardware, logistics rigs, and power consumption.

Observing the income and balances of miners is often useful in determining their moods and beliefs. The chart below shows the miner coin balance since 2016 and we can see three typical milestones:

We can analyze the profitable part of the miner’s equation by looking for periods of profit or loss. Miners usually work with long-term horizons. Given the price volatility of coins, miners will evaluate revenue streams using long-term averages to make economic decisions.

The Puell Multiple is a metric that builds on this observation by taking the ratio between a miner’s current earnings and their 365-day average. This creates an oscillator based on the aggregate profitability of the miner.

What will you learn in this article?

Let’s start with what every person who has chosen this difficult path of a speculator in the field of cryptocurrencies should know about.

What is a cryptocurrency?

Cryptocurrency is a digital asset and at the same time a payment system that uses a cryptographic function to encrypt records. Cryptocurrencies are based on distributed ledger technology called blockchain. Cryptocurrency is considered an alternative to fiat money, which is issued by the state.

That’s sorted out. We flew further.

A token is a digital asset that is related to a specific project and is issued on the basis of a cryptocurrency. For example, on the basis of the Ethereum blockchain platform, it is possible to create ERC20 standard tokens, including the well-known USDT stablecoin.

What is a stablecoin?

Stablecoin is a token with a fixed exchange rate. Most often, quotes of such coins are tied to the dollar. There are other options. For example, Tether launched the XAUT stablecoin, which is worth as much as one troy ounce of gold.

Simply put, 1USD is 1USDT (It’s very simple).

Let’s get back to tokens. What is the name of the most important token on the cryptocurrency exchange? – That’s right, Bitcoin (BTC).

Bitcoin is the first cryptocurrency. It was released in 2009 by a person (or group of people) hiding under the pseudonym Satoshi Nakamoto. At the moment, bitcoin is the leader of the crypto market with a share of 40-60% (the indicators change, but it is not going to retreat).

Okay, this point is clear. Let’s get under the hood of this beast.

Block – a list of transactions in the cryptocurrency network that have been processed and confirmed by miners. Blocks are created once in a certain period of time, for most cryptocurrencies it is different. For example, in the Bitcoin blockchain, a block is generated every 10 minutes. The block, after formation, is added to the previously found blocks connected in a chain. This is how the blockchain is formed.

Blockchain (from English – a chain of blocks) is a distributed ledger consisting of a chain of blocks, inside each of which transactions are recorded. Each subsequent block is linked to the previous one. This sequence cannot be broken or modified, otherwise the data in the cryptocurrency network will become invalid.

I know, I know… sounds boring. But there’s nothing you can do about it. Let’s move on…

Wallet is an application for storing cryptocurrency. It allows users to access digital assets, transfer them to other addresses, use them for payment and other purposes.

There are several types of wallets. Cold or hardware – wallets in the form of a separate device, similar to a flash drive. They are considered the safest, since you can use the cryptocurrency only with direct access to the wallet and knowing the password from it.

Browser-wallets are wallets that are built into the browser as an extension.

Desktop wallets are special applications installed on a computer.

Exchange wallets are wallets that users receive by opening accounts on exchanges for cryptocurrency trading. This method of storing funds is considered the most unsafe.

And how to send your coins?

For this there is: Address – a set of characters that is used in the cryptocurrency blockchain to designate a specific wallet or smart contract. By address, you can transfer funds within the coin network. Addresses can also be presented as a QR code.

And how to protect?

For this, there is a Key – a set of characters that is needed to gain access to a cryptocurrency wallet. There are two kinds of keys.

Public – aka address – allows anyone to view the contents of the wallet.

Private – this key is required to spend funds from the wallet.

Well actually…

Transaction – an operation in the blockchain, for example, transferring coins between wallets or using a smart contract.

Most often you have to wait.

Pending is a transaction that has already entered the blockchain, but has not yet entered the block and is awaiting processing by miners.

Now let’s deal with contracts.

You thought that they are only in the world of paperwork) But no:) here they are everywhere.

A smart contract is a specific algorithm recorded in the blockchain. Smart contracts are used to conduct complex transactions, such as issuing tokens or exchanging assets through decentralized applications.

Let’s go back a little.

We have fundamental coins (such as Bitcoin (BTC) and Ethereum (ETH)).

But there is also:

Altcoins is a term that describes all digital assets alternative to bitcoin. The first altcoins appeared in 2011, they were Litecoin and Namecoin coins.

And there is also:

Shieldcoins is a conventional name for coins that have low capitalization and unclear prospects. (Shitcoin) – from the word (Shit) – well, you understand 💩.

Now let’s move on to the terminology of the exchange players for a quick and clear explanation of our thoughts and arguments.

Bulls (the opposite of bears) are market participants who expect the price of an asset to rise and buy or hold it in order to fix profits in the future. When a bull sells a cryptocurrency, it can go over to the side of the bears, who play for a fall in the price.

Bears (the opposite of bulls) are market participants interested in falling asset prices. They can wait for the asset to fall in price in order to buy it at a better price or play short – that is, keep a short position.

This is such a zoo.

And what is the name of the process when the graph covers it here and there?

Volatility is the degree of cryptocurrency price fluctuations over a certain period of time. The higher this indicator, the stronger the coin became more expensive and cheaper, for example, within a month. Assets with greater volatility carry more risks, but at the same time provide more opportunities to earn on strong exchange rate fluctuations.

Let’s move on to positions:

Long or long position — a deal in which a trader or investor buys an asset and expects its value to grow.

A short or short position is a transaction when a trader borrows a cryptocurrency from an exchange against the security of his assets, immediately sells it and waits for its price to decrease. When the price falls, the trader will be able to buy the same amount of coins that was borrowed, but cheaper, and return the debt to the exchange.

Flat or sideways movement is a situation when the market or the rate of a particular cryptocurrency does not rise or fall, but is clamped in a certain range (corridor). For example, if the bitcoin exchange rate fluctuated in the range from $55,000 to $58,000 for a month, then it was in a flat all this time.

Let’s move on to the big players. They don’t fit in a zoo.

Whales are big players with a lot of money. They may have enough capital to manipulate the price of an asset.

What can whales afford?

Pump is a deliberate overpricing of a cryptocurrency. Several users with large capital can team up to “pump” a coin and then sell it to other users at an inflated rate. Almost always, the pump ends in a sharp drop, and the profit is fixed mainly by the organizers of the scheme.

Well, actually…

Dump – the deliberate sale of a large amount of cryptocurrency in order to bring down its rate.

The smallest animal closes our zoo.

A hamster is a novice trader who tends to make erroneous decisions due to panic and emotions.

Many whales were also once hamsters. (It is possible to shed the skin of a hamster and transform into a shark (becoming a whale is very difficult), but for this you need to be able to turn on your head and suppress emotions in yourself.

Speaking of head and emotions.

Risk management is a strategy for working on absolutely any market, in which potential threats and possible profits are assessed. Its principle is that you can set a certain deposit bar and a loss limit, upon reaching which trading will be stopped. Risk management is a fundamental skill that anyone who wants to be confident in the stock market should have.

Also, one should not forget about the main enemy.

Fear of missing out (FOMO) – fear of missing out. It is inherent in novice traders who are ready to invest in cryptocurrency, fearing that they have missed the growth of its value.

You won’t earn all the money from the stock exchange. And if you suddenly earn money, then after such stresses, you won’t return your nerve cells for any money. Psychology is very important. Without it, nowhere. Each potential trader must understand that he will have both plus and minus trades. The main thing is to maintain internal balance and not make unnecessary movements on a drunk head.

Yes, before I forget. Also important to understand:

Decentralized Finance (DeFi) is a field of decentralized services, which include exchanges and platforms for opening deposits and issuing loans secured by cryptocurrency.

Decentralized Application (Dapp) – decentralized applications and services that are open source, built on the blockchain and work autonomously.

A few more interesting terms.

Altseason – a stable and calm change in coin quotes is replaced by a rapid rise in their price. It is the period when entire groups of tokens begin to rise in price rapidly that is called the alt season.

BullRun — the market is dominated by bulls. And push the market up.

Hodl or Hodl is an abbreviation resulting from a distortion of the English word Hold – to hold. It implies the purchase of a cryptocurrency and its storage for a long period of time due to the belief in the future growth in value. Stands for Hold On for Dear.

A rocket is a slang term meaning a sharp rise in the price of a cryptocurrency in a short period of time. On the asset chart, it looks like a big, green candle.

Snot is a slang term that means both a sharp decrease in the price of a cryptocurrency in a short period of time, and a sharp increase. On the asset chart, it looks like a large, red or green candlestick.

In other words, it is a collection of liquidity.

And of course everyone’s favorite and expected term:

Tuzemun – translated from English “to the Moon” means flying to the moon. This implies a rapid increase in the price of cryptocurrency.

So, we are done with the introductory terms… Did you think that was it?

This was just the beginning)

There will be some information here. I’ll tell you about the main thing.

Orders

An order on a cryptocurrency exchange is a key instrument for buying or selling a specific digital asset at the best possible price. Now we will consider the types of orders and understand which of the options is better to use in certain situations.

Order categories:

1) Limit order – This is, in fact, the basic order type, which is best for beginners to start trading with. Its peculiarity is that the user specifies not only the desired amount of coins to be sold / purchased, but also the desired price for himself. This type of order is beneficial in situations where a sharp jump or decline in the rate is expected.

2) Market order is an ideal option for those who want to quickly buy / sell cryptocurrency. The order is placed at the current market price and carried out in just a couple of minutes (sometimes less). The bidder specifies only the number of coins he wants to buy or “drain”.

3) Stop loss (there are two types) – type one: an order that is often used by experienced traders. It allows you to protect yourself from the loss of funds when the exchange rate falls or to make a profitable deal at the growth stage. In such cases, a lower limit is set for selling an asset (to get rid of it before it depreciates greatly), as well as an upper limit for buying (in order to have time to buy a coin before it rises even more).

type two: ideal for profiting from short-term ups and downs of cryptocurrency. This is an instruction to send a buy or sell limit order when the specified trigger stop price is reached or exceeded. . orders to buy or sell at a given price or better).

Take – translated from English take profit (take profit) literally means “take profit”. If the stop loss limits the amount of losses, then the take profit limits the amount of profit.

Now let’s deal with trading strategies:

Scalping is one of the strategies of intraday speculative trading, when a trader makes a large number of low-profit transactions, as a result of which he receives a high total income. . Traders using this strategy choose those cryptocurrencies that fluctuate constantly and as sharply as possible in price.

Day-trading – speculative trading on the stock exchange during the trading day without transferring open positions to the next day.

Swing trading (from the English word “swing” – fluctuation, turn, swing) is a medium-term trading style based on the cyclical price movements. The main idea of ​​this method is early recognition of the beginning of the cycle and the most efficient use of its dynamics.

Well, the final type is a long-term type of trading. In other words, “investment”.

OTE – Optimal trade entry.

As the name implies, OTE is the optimal entry point for the Fibonacci grid.

All Time High (ATH) – the historical maximum value of the cryptocurrency. For example, the bitcoin exchange rate has recently set its ATH at $69,000.

If you are a beginner and do not yet have a deposit as such – participation in projects of the type: ICO / IDO / IGO, this is what you really need.

Now I will quickly bring you up to date:

ICO (Initial coin offering) is a form of attracting investments in the form of selling to investors a fixed number of new units of cryptocurrencies received by one-time or accelerated generation.

IEO (Initial exchange offering) is an alternative to ICO. The principle is the same, but the project organizes the initial sale of tokens using a specific exchange.

To put it another way: There is a team of people who have created some kind of project that does not yet have positions on the stock exchange. In order to attract attention and publicity to their offspring, an event is held during which people perform certain actions to help promote this project, and for this they get the opportunity to win the right to purchase a token of this project before the token itself goes into circulation on the exchange. Thus, the winning person receives potential X from the newly minted token, while having 0 cash investments.

There are also options for obtaining the so-called guaranteed allocation. To do this, the creators of the project are asked to keep in their portfolio a certain number of coins of the already published token from these developers, or to keep in their pocket a coin of a certain exchange – for example, a BNB token from Binance, or HT (Huobi Token) from the Huobi exchange.

Sometimes, according to the terms of the project, the coins should simply lie on the spot wallet in the public domain. And in other cases, coins need to be farmed or thrown into staking.

Of course, the queue for such projects is wild, but no one bothers to approach the matter with intelligence and ingenuity, and make a bunch of accounts for friends in order to increase your chances of getting that very allocation.

Approximately the same schemes work for the following types of projects:

IDO (Initial dex offering) is a fundraising method in which a crowdsale is carried out through a decentralized exchange, using liquidity pools, through which traders can easily and quickly buy new tokens on the DEX.

IGO (initial game offering) – offers users a blockchain-centric gaming experience on Seedify, which is also offered by ICO, IEO and IDO. Blockchain game projects can implement the initial offer of their tokens on Seedify. Thus, IGO allows the owners of gaming projects on the blockchain to enjoy these benefits, while investors can connect to the project and invest in it without intermediaries.

To bish: There is a game (pharmaceutical), playing which you can earn real money, but you will receive it in project tokens. The same tokens can be obtained by participating in the same events that I wrote about above.

AirDrop is another way to get some tokens, literally from nothing.

Airdrop is a way to attract new users to a project, which implies a free distribution of cryptocurrency. You can get tokens for nothing or for completing simple tasks, for example, for registering on an airdrop platform, or for inviting other traders to register.

Now let’s deal with the internal terms of such projects:

Whitelist (Presale) — to take part in the events listed above, we need to fill in all possible whitelists. This is a form in its classical sense. There you enter your first name, last name, id of twitter, telegram, discord, public address of your metamask wallet … and then complete the tasks. Typically, tasks consist of subscribing to the project’s telegram channel with announcements, project chat, subscribing and retweeting a post with an announcement on Twitter, subscribing to a discord server. The wallet is needed for further verification on the site, in case of winning. Whitelists also help developers keep track of the actions taken so that everything goes smoothly and all conditions are met.

In most cases, the whitelist link leads to gleam.io

The type of allocation draw option, when a certain number of people will receive coins randomly (i.e. 20,000 participants, and only 1000 people will receive the right to purchase) is called FCFS.

The second option is a guaranteed allocation (I wrote about this above). You are guaranteed the right to buy a coin before entering the exchange, provided that you hold a certain amount of certain coins in your wallet.

Let’s fly further.

IPO allocation is the degree of satisfaction of an application for the purchase of shares at the time of their initial placement on the market.

That is: you took part in the project and your number was winning: you got the right to buy a coin for a certain amount, i.e. received allocation.

TGE (Token Generation Event) is the way in which tokens are distributed to the first owners.

Westing and Cliff

The conventional vesting scheme covers a four-year period with an annual threshold (cliff). This means that until your participation in the startup is one year old, you will not receive a share of your coins. On the first anniversary, you will receive 25% of the agreed share, and then you will receive the rest on a monthly basis.

In other words:

There are projects that give out a certain amount of coins for use (let’s say 30%), and you will receive the remaining 70% linearly within three months after the coin is listed on the exchange.

But in most cases, when you win an allocation, you get all 100% of the tokens at once and you can actually sell them at least immediately after they have entered the exchange.

This is actually what it is – Opening of coins.

Listing — the token is listed (listed) on the exchange.

Staking is an opportunity to receive passive income from locked coins. This process allows users to participate in transaction verification (similar to mining) on ​​a proof-of-stake (PoS) blockchain. Staking is associated with blocking funds on a cryptocurrency wallet in order to maintain the operation of the blockchain in exchange for receiving passive income. Unlike landing, in staking, not the coins themselves are transferred, but only their rights. The coins continue to belong to the owner, protected by a smart contract.

Cryptocurrency farming – consists in receiving rewards in native protocol tokens for providing loans or obtaining loans, or for providing liquidity to decentralized exchanges and applications. Simply put, farming is a mix of landing and staking. A way to use cryptocurrency to earn even more cryptocurrency.

Are you still here? Everything is fine ?

Be patient. There is very little left …)

Now let’s analyze the topic of NFT, which is now very progressing.

It would seem: “Just some pictures…”

But everything is much more interesting than it seems at first glance.

By selecting projects, members of our team earn a lot of money from these pictures.

Yes, you understood correctly, just buying a picture and reselling it for 10 times the price won’t work. This could have been done earlier, when the NFT topic was known in narrow circles and the first people who believed in this direction were found.

Let’s figure it out:

NFT – Non-fungible token (NFT, non-fungible token), also a unique token – a type of cryptographic tokens, each copy of which is unique (specific) and cannot be exchanged or replaced by another similar token.

Mint – buying NFT directly through the project website upon release.

OpenSea is the largest platform for the sale of NFTs, it operates mainly on the ETH, WETH network.

MagicEden, SolSea, Solanart are the largest NFT trading platforms on the SOL network.

WhiteList (Pre-Sale) — access to buying NFTs at a reduced price before the public sale. (and, accordingly, you can sell before everyone else at a higher price)

Gas war – when the number of transactions in the NFT network grows, so does the gas, and, accordingly, the fee for each completed transaction in the ETH network.

Gas — transfer fee.

ImmutableX — Layer2 platform for selling NFTs on the ETH network. There is no Gas war in it.

Discord is the main place where new projects appear, where they get into the whitelist and where the project conducts all its activities.

Useful commands on Discord servers:

!rank (/rank, alevel, arank) — level check on the server

-invites (/invite) – check the number of invitations to the Discord server by your unique invite link.

We have a separate discord channel and chat where you can learn more about the specifics of working in the field of NFT, as well as choose a project for participation.

If you have read up to this point, then you already know much more than any of our team at the start of their journey in this area.

There is a lot of information, do not try to remember everything at once (this still cannot be done).

You will open this article more than once. this knowledge will be useful to you in the near future, and only the path that you will walk with us will help you remember all this.

We hope that this information will help you choose a direction (there are a lot of them now) and get your first profit using this knowledge and the community you are in now.

ⓒ CryptoHub Team 🤍

Our official Telegram channel:

1 cycle 2009-2012

The first cycle is considered to be since the creation of bitcoin. In the network, it is often called the genesis block, because there were no blocks before it. The development of cryptocurrencies unfolded from scratch, the main one was Satoshi Nakamoto, the creator of bitcoin. After a couple of years, the first crypto startups could be observed. The legendary Mt. Gox – it was on it that Bitcoin first began to be traded. This benefited the main cryptocurrency: the price rose from $1 to $31. As expected, everyone started talking about bitcoin: ordinary people and Wall Street bigwigs, media, forums. It is worth noting here that even dedicated crypto enthusiasts have treated bitcoin as an experiment. They could not even imagine that its value could approach the value of shares of traditional companies, and in the future it could completely change the financial system.

According to the stages of the crypto cycle, a little more than a year later, bitcoin began to fall in price, talk about it stopped. However, people began to come into the industry who brought ideas with them, maybe not new ones, but given that the market was not busy, they worked. Of the main ones, it can be distinguished that Litecoin and Namecoin appeared in 2011, the appearance of the first crypto wallets and mining pools. Also, in 2011, Vitalik Buterin co-founded Bitcoin Magazine.

2nd cycle 2012-2016

By the end of 2012, the price of bitcoin began to grow rapidly. This trend continued at the end of 2013: on December 2, the main cryptocurrency updated its all-time high of $972. This growth meant the beginning of a new cycle, because people started talking about cryptocurrencies again, because such an impulse growth is hard not to notice. True, there was one significant difference with the first cycle: if then only those who understood what was at stake (technologists, programmers, financiers, cryptologists) paid attention to cryptocurrencies, now everyone started talking about them. Ordinary hard workers were interested in the possibility of quickly increasing their savings, although they did not understand anything about cryptocurrencies and blockchain. Thus, the influx of new faces in the second cycle was 10 times greater than in the first.

We can say that this cycle gave life to the crypto industry, because during its time the following projects were launched: Ethereum, Monero, Ripple and Dash. These cryptocurrencies are still in demand, ETH and XRP are in the TOP-10 in terms of capitalization. A lot of crypto projects are deployed on the Ethereum blockchain, because it is considered the most important decentralized platform using smart contracts.

In 2016, the price of bitcoin no longer showed such growth, and the correction began at the end of the year.

3rd cycle 2016-2019

This cycle was remembered by the entire crypto industry and it can rightly be called the most significant. I CO – initial public offering of tokens, appeared during the third cycle. Although the first ICO was held back in 2013, it began to be used on a massive scale only in 2016. It was then that fundraising began for many crypto projects. Most likely, you do not need to be reminded that half of these projects were scammers, if not more. Therefore, many ICO investors simply did not receive their funds back. For this reason, we do not see activity in the ICO now: who wants to get involved with alleged scammers?

In any case, there were those projects that honestly spent the funds received on development, so during the third cycle, even more crypto companies appeared than in the previous two. As for bitcoin, they began to buy it en masse. By the way, in 2017, for the first time, the guys from Wall Street were suspected of fraud in the crypto market. At the beginning of the year, the market capitalization was only $19 billion, and given the kind of money found in traditional markets, it was not so difficult to manipulate the price. Moreover, the crypto market is not regulated, therefore, there will be no criminal punishment for this.

By the end of 2017, bitcoin updated its all-time high, reaching $20,000. Shortly after that, the “crypto winter” began: the capitalization of the crypto market decreased from $800 billion to $200 billion, and a protracted downtrend prevailed in the price of all cryptocurrencies.

4 cycle 2020-?

So we got to our time. November 2020 can be considered the beginning of the fourth cycle. A few months earlier, the price of bitcoin also grew, but not as fast as it happened at the end of the year. Just think about it: on December 11, 2020, Bitcoin was worth $17,800, and on April 14, 2021, it hit an all-time high of $64,600. If you look at the percentage, this increase is much less than it was in previous cycles. But if we consider bitcoin in absolute terms, there is no more expensive asset on the financial market.

Here everything is the same as in the previous cycles: as soon as the price of bitcoin began to rise impulsively, they began to talk about it everywhere. It is worth noting that we have witnessed a historic event in the crypto industry: institutional investors began to invest in cryptocurrencies. Here we were talking about completely different money, which prompted bitcoin to such growth.

In addition, traditional financial companies that provide their services around the world have either already implemented cryptocurrencies or are actively working on it. Their list includes: Visa, MasterCard, PayPal, JP Morgan, Tesla, Citigroup and others. Also, the countries of the world have begun work on state cryptocurrencies.

Although DeFi and NFT are not new directions in the crypto industry, they have received active development only since the beginning of the fourth cycle. Many projects have appeared that consider themselves to be new areas of the sector.

As a result, the crypto industry now has huge support from the traditional financial sector. Therefore, the question arises here: if you look at previous cycles, then the growth of the crypto market continued for a year and a half, subject to a cycle length of 3-4 years. But then there were no institutional investors on the market, and cryptocurrency did not begin to take root in ordinary life processes. How long can growth last now?

We can say with confidence that the growth will be until the end of 2021, because there are no factors stating the opposite now. In order not to miss the opportunity to earn money, use the services of RevenueBot. The service offers the creation of trading bots for trading on top crypto platforms. You can learn more about RevenueBot on the official website of the service.

When will the rise in the price of bitcoin resume? Understanding with the help of on-chain indicators

Cryptocurrencies are unique in that on-chain analysis is applicable to them, which is impossible for traditional financial instruments. Public blockchain data allows you to learn a lot about the activity, moods and motivations of market participants, identify patterns and predict the most likely price movement scenarios.

ForkLog collected and analyzed the most interesting and relevant on-chain indicators and found out what to expect from the bitcoin price in the short and medium term.