The Bitcoin market cycle is the same as a Wall St. stock market cycle

[outatime1]

One important thing I have learned over the last few years is that all markets have the potential to "behave" the same.  This is because the "behavior" of the market is simply the result of the emotions of human beings.

These emotions are our fears, greed, FOMO, or whatever you want to call them.  Humans will always tend to act and react in predictable ways.  This is easily illustrated with the following charts.

The first is a commonly known "Psychology of a Market Cycle" chart for stock market bubbles.  It shows all of the phases of a market cycle from the start of a bull run, to the exponential rise and peak, to the crash and depression, and back to the normal.

The next 2 charts are the last 2 Bitcoin cycles that saw a exponential rise and crash in 2017 and 2013.  As you can see, the Bitcoin market "behaves" the same way that the stock market cycle "behaves".

This is important and valuable information as we approach the potential beginning of another Bitcoin cycle.

[moviebuff777]

It is amazing how similar those charts are..even the second increase called the Complacency right after Euphoria can be seen in the Bitcoin charts.

I think we are either right at the end of one cycle or beginning a new cycle, but there probably is some overlap.

[bitvalak]

Some commodities and stocks that become trending almost have the same and recurring patterns, in contrast to stocks and commodities that are less desirable.
This is because human behavior is the same as you explained above. Most of human behavior is unprepared when it receives a loss, and tends to hold back when it is profitable.
Fear and greed always happen, that is what forms the true market pattern.

[rijaljun]

Short period Bitcoin chart compared to the whole chart of stock market?

I would like to think this is just a coincidence. Even though sometimes stock market affects crypto prices, I don't think there is correlation between those cycle.

[outatime1]

Short period Bitcoin chart compared to the whole chart of stock market?

I would like to think this is just a coincidence. Even though sometimes stock market affects crypto prices, I don't think there is correlation between those cycle.

It's not the whole chart of stock market.  It's a market cycle.  A market cycle could be a couple of years or a decade for example.  The stock market has had many cycles.  And I'm not talking about the affect the stock market has on Bitcoin.

[rijaljun]

It's not the whole chart of stock market.  It's a market cycle.  A market cycle could be a couple of years or a decade for example.  The stock market has had many cycles.  And I'm not talking about the affect the stock market has on Bitcoin.

I might have been wrong about that, still Bitcoin market is very young compared to stock market. Bitcoin price cycle could change in next years, this one for me is just a very weak proof and never enough to say Bitcoin and stock have same cycle.

[Captain Corporate]

 These pictures have been shared a ton of time and never shows what happens after the disbelief part. Look at stock market, it does go up, than go down a lot and than keep going up as well. Look at what happened in 2008 and look at whats going on now, hell even last year there was a huge fall and its still better than 2008. The prices of stocks are so healthy right now due to 10 years of growth (and mainly inflation and greedy corporations always finding a way to make more profits every single year so they get bigger and bigger) even at a scale of 2008 if a drop happens the prices won't hit back on the pre-2008 good prices neither for most of them.

 Crypto is the same yes, it is thought that people eventually will realize how corrupt the system is and will leave and will be in disbelief how they believed in such a thing etc etc yet none of that will ever happen and when we drop to a lower price after our next all time high, we will drop to something over 20k, we had a 1.4k all time high just 3 years ago and after the new 20k we "fell" to 3k at most, twice as much as the previous all time high.

[The Sceptical Chymist]

Short period Bitcoin chart compared to the whole chart of stock market?

I would like to think this is just a coincidence.

No, OP is right--the data he showed looks just like a single cycle, and I've thought about this sort of thing before and I agree that pretty much all markets in which there is enough liquidity behave in a similar fashion.  I definitely think there's enough liquidity to bitcoin's market, and its history does seem to support what OP is saying. 

The takeaway message for me is that you need to buy when everyone is feeling pessimistic, which would probably describe the general mood for the past few months.  And although I haven't exactly been buying large amounts of bitcoin, I have been accumulating it in anticipation of another upswing.  I'd read enough gloom-and-doom threads on the forum to know that it was probably a good time to be buying and holding bitcoin, and I hope I made the right call. 

[exstasie]

Short period Bitcoin chart compared to the whole chart of stock market?

I would like to think this is just a coincidence.

No, OP is right--the data he showed looks just like a single cycle, and I've thought about this sort of thing before and I agree that pretty much all markets in which there is enough liquidity behave in a similar fashion.  I definitely think there's enough liquidity to bitcoin's market, and its history does seem to support what OP is saying.

Any asset in a global bull market will perform like this. That's why the cycle applies well to stock indices and BTC alike. I don't think it's applicable to just anything though. Lots of weaker assets plummet to the floor and never recover.

The takeaway message for me is that you need to buy when everyone is feeling pessimistic, which would probably describe the general mood for the past few months.

Yep, the depression/despair phase represents a recurring accumulation phase in a long term bull market. Sentiment has been in "fear" or "extreme fear" for the last couple months straight. Taken in combination with bullish technical signs on the weekly/monthly charts, that's a good sign for a bullish Q1.

[outatime1]

Just to be clear, my point is that any market has the potential to behave this way if you look at the original post.  I think Bitcoin is behaving like stock market cycles and other makets have the potential too as well.

[thecodebear]

Well yeah. It's not that bitcoin is behaving like the stock market. It's just that both are markets, so they are both behaving like speculative markets behave.

Markets are ruled by mass psychology on the grand scale, and emotions on the small scale. Fear, greed, boredom, FOMO, etc. are the driving forces of speculative markets, whether made of stocks or cryptocurrencies or whatever. Each has their own types of events that play into emotions and the psychology of the markets (earnings reports and news and other stuff for stocks, halvings and news and whatnot for bitcoin). Obviously the duration and volatility and overall size of the stock market and bitcoin market cycles are very different, and the specific kinds of events and analysis that influence the market are also different and appropriate to each market, but they are both markets and so are both ruled by the same ruling powers of humanity: emotions and psychological outcomes.

[adaseb]

I agree with those charts and all but it doesn't really help because you have no idea where the bottom will be.

Basically we hit $6400, had a double bottom and now looks like we might moon. However many are expecting the $5500 area to get retested because it needs to test the 200 WMA. And what if the $5500 is not the low, what if it goes lower to like $4000.

Any of these prices could be the bottom of the cycle and it all depends on when you buy. Some can buy at $6400 and sell at $4001, some can put in a buy order at $3999 and it never will reach their price and start to moon.

So its a fundamental way of trading it doesn't really help because nobody can predict the bottom of a stock market or a bitcoin market.

[figmentofmyass]

I agree with those charts and all but it doesn't really help because you have no idea where the bottom will be.

the point isn't about predicting tops and bottoms (in terms of price). it's about recognizing the market psychology that corresponds to each part of the market cycle.

have you ever gotten greedy at the top, or maybe sold the bottom? that's what this chart is taking aim at. it's not a crystal ball but it's a healthy reminder to play against our emotions when trading rather than to give in to them.

so when the market is in euphoria ("i am a genius! we're all gonna be rich!") you should probably be selling. when it's in depression ("my retirement money is lost!") then the bottom is probably close.

interestingly, i'm sensing a lot of disbelief ("this is a sucker's rally") right now. you know what that means.

[pooya87]

when you claim two things are the "same" then you should also include the charts for those two to prove they are the same. right now all you have is the abstract shape showing the cycle in theory accompanied by only bitcoin charts.
i am not denying there are a lot of similarities but being "similar" is not the same as being the "same". in fact the bitcoin market is a completely distinct beast of a market that has been moving on a very different path than we have ever seen in any other markets.
besides all these cycles are subjective since there is no default time frame defined by that "theory" above. for example one may consider the time frame to be a month while someone else may consider 3 years and you can also consider the 20 year period as the actual cycle. and all of them would be true if you look at the charts in the same time frame!

[rijaljun]

No, OP is right--the data he showed looks just like a single cycle, and I've thought about this sort of thing before and I agree that pretty much all markets in which there is enough liquidity behave in a similar fashion.  I definitely think there's enough liquidity to bitcoin's market, and its history does seem to support what OP is saying.  

A single cycle won't make me easily believe they are the same. It is just too weak for me to take a result. Even though I can't deny the fact that OP could be right in the future as probably traders habit and emotion are cylcing the same, I don't it is the right time to justify this.

We need more clue, this one is just a starting clue. As we are in the way of making more cycles, I will keep it as a coincidence.