As traders suggest, predicting the bottom is like trying to catch a falling knife.
The term “the bottom is in” can easily be misunderstood since it doesn’t necessarily mean the price action and the overall sentiment in the cryptocurrency market will suddenly turn positive.
It will all be doom and gloom for a while more.
While we can claim that a few cryptocurrencies reached the bottom, we still observe tokens with unreasonably high valuations.
There is more downside for more than half of the current top-20 cryptocurrencies. A bear market doesn’t end before it washes away the most useless tokens and scams.
We’ve seen it all unfolding before, as investors slowly back out from their support and sell or sometimes even dump their coins/tokens, crashing prices.
Well, the heavy backers and their funds are already in trouble, and in the following months, the projects they backed will suffer.
While the signs are increasing, we still haven’t experienced all that is required for the prices to bottom. The market sentiment will gradually shift to positive, but first, these indicators need to max out.
When Will The Market Bottom?
Influencers reduce or completely stop publishing crypto content, (Tweets, videos, etc).
As interest in crypto fades, content creators also reduce the time spent in crypto. Views and income are low, so influencers and content creators will look into alternatives. It will be the bare minimum and life as normal on social media without the crypto-bros spamming how crypto is changing everything. Best time to buy, is when nobody is discussing crypto.
Most newcomers count losses and call crypto a scam (✓)
Once again, crypto produced massive losses for the latecomers. It is bound to happen like that again and again.
Manipulation exceeds the market dynamics as speculation is the driving force. It will often resemble a scam, and definitely, there are multiple scams involved in crypto, but a great indicator to buy is when these voices are increasing. It is absurd to call the disruptive technology behind cryptocurrencies a scam. Investors in this technology that recognize potential, also identify the fallacy in this stereotypical impression.
Celebrities stop discussing crypto
This indicator works well to locate the top but also great to identify a potential bottom.
A chart with celebrity mentions of cryptocurrencies would serve well as a red alert indicator when approaching close to the top.
Everything down 80–90% from ATH (not there yet).
Centralized tokens with limited progress are overshadowing real potential. Even Shiba-Inu is still in 12th place in market cap indexes.
We shouldn’t expect every cryptocurrency to reach 2018 prices (some already did, though). There is still too much vaporware at the top right now.
Timing of each cycle
We are in a bear market, but prices will not always drop. Some opportunities escape the negative market sentiment and perform independently of BTC price action.
However, we shouldn’t ignore the market cycles. A year before the next BTC halving will be ideal to begin investing without even looking at other indicators.
Mainstream financial media stop mentioning crypto (almost there)
The mainstream media have cooled down reports on cryptocurrencies recently. There should be just sporadic mentioning of crypto in CNBC, Bloomberg, and Forbes close to the bottom.
The bottom is not in without news of troubled miners shutting down.
Conditions for miners’ capitulation exist today, but news of miners exiting will be a definite sign of a bottom. It will take the price of Bitcoin (BTC) to stay below $20k for a while, perhaps lower than $15k.
With the approach Celsius, 3AC, and other funds and companies, their collapse was inevitable.
However, Terra and the UST stablecoin collapse was not an indicator of a bottom. Ponzi schemes usually collapse when the market is at its peak, or at least at a point, it can deliver maximum profit to the organizers.
Wealthy investors (and companies) SODL (✓)
Elon Musk selling 75% of Tesla’s BTC is big news, and there are probably more wealthy individuals that bought in the hype (mania) phase, suffered losses, and now selling at a loss. How is this an indicator of a bottom, though? It is “bad news” that perhaps indicates the worst is over.
Musk’s crypto adventure doesn’t end with BTC, though, since he is a vocal advocate of Dogecoin and perhaps will soon discover a whole new world of utility and potential.
Crypto whales return from their prolongued vacations.
About a year before the next BTC halving, we will notice some forgotten Twitter accounts and YouTubers appearing again with new Tweets and new content. Not the best indicator, but one that we should consider together with the rest.
No, the bear market has not ended yet, but we are getting closer to the bottom. There are still a few more months that can drag the total market cap lower.
Currently, the market is divided between projects that don’t deserve a market cap of billions of dollars and networks that should be higher in the rankings.
Overhyped centralized networks or ERC20 tokens that produce nothing will not stay relevant. The control of a network by a small team of devs destroys the fundamental permissionless nature of blockchains.
Meanwhile, networks that deserve attention are excluded and suppressed by the crypto media and influencers.
Research is necessary. While these indicators signal an opportunity, the opposite happens during the hype moments.
The market dynamics change constantly, yet, these indicators remain.
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Originally published at Read.Cash