Inside A Bitcoin Cycle

On a chart, Bitcoin cycles look obvious. The pattern is clear: accumulation, markup, distribution, markdown. Buy at the bottom, sell at the top, repeat.

From inside a cycle, it feels nothing like that.

At the bottom, the price has been falling for months or years. Every headline is negative. People who used to talk about Bitcoin have gone quiet — some embarrassed, some angry. The dominant feeling is that this time really is different. That it really is dead. Buying at this moment feels not brave but foolish.

As the price starts recovering, the early movers are dismissed as delusional. Surely it’s just a dead cat bounce. The real crash is still coming. Most people wait for confirmation before believing.

By the time the bull market is obvious — when Bitcoin is on the news, when colleagues are asking about it, when the gains are extraordinary — the easy part is over. The people buying now are buying near the top, though nobody knows that yet.

At the peak, euphoria. Everyone is a genius. Price targets get revised upward constantly. This time feels different — like the old rules don’t apply.

Then the crash. And the cycle of disbelief begins again.

Knowing this pattern doesn’t make it easy to act on. The emotions at each stage are real and powerful. But knowing it exists — knowing that the most uncomfortable moments are often the most important ones — is the beginning of a different relationship with Bitcoin’s price.

Tomorrow: the four stages of a bull market — and where most people get hurt.

— The Daily Bit