Hackernoon logoBitcoin Bull Market: Comparing 2020 against 2016 by@blackmambaventures

Bitcoin Bull Market: Comparing 2020 against 2016

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@blackmambaventuresBlack Mamba Ventures

Black Mamba is a venture capital fund for projects with the potential to become the Unicorns

The uptrend period when Bitcoin approached $ 18,000 and what's going on reminds us of Cycle Theory in the past, as well as the uptrend of 2016 - 2017, simply because the market could change. change, but human psychology is the same. We will look back at the two phases: 2016-2017 and the current period, so that investors can draw their own conclusions about what to do when the market is in the FOMO phase.

Some highlights: Bitcoin trend increases asymptotically important levels, Google Trends and Multi-level, player psychology and market cycles, factors participating in market cycles, overview of defi world, ...

I. Market Context.

Another crazy day with Bitcoin, when Bitcoin broke a series of resistances from strong to weak, and is now approaching the 20k $ / BTC mark - the old peak of 2017-2018.

This time and what's happening reminds me of Cycle Theory, as well as the uptrend of 2016 - 2017, simply because the market can change, but the human psychology is the same. . This article of mine will compare more carefully the two phases: 2016-2017 and the current period, so you can draw your own conclusions what to do now.

II. Similarities.

1. Bitcoin has a strong uptrend, approaching important levels.

One common point, which is also the omen of the entire 2016 and 2020 market, is that Bitcoin enters a relatively strong uptrend, and breaks all important resistances.

If by definition normal critical resistance, then most people would think current resistance is $ 20,000. But to the writer, right now, Bitcoin is likely at its true peak: $ 18,000.

Looking up at the key milestones of 2017 peak is Weekly Close, Bitcoin has never actually closed at $ 20,000. $ 20,000 is just a beard, and most of the trading volume according to VPVR happens around the $ 14-17,000 zone. And if all goes well, the BTC weekly candle closes on it then team short will have a relatively painful time in the next round.

Saying this to confirm one thing, $ 20,000 is essentially just the psychological block of Bitcoin. And what is psychological block, will often be easily broken.

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And this is also the first common point between the market 2016 - 2020. Prices go up in the suspicions and fear of those who have lived too long in downtrend, creating liquidity for buyers.

From this doubt, we have the emergence of the indispensable similarity between the two seasons: Google Trends and the sons of Ponzi.

2. Google Trends and Multi-level.

One thing that is quite interesting about Bitcoin's rise just now is that although the price is up, it has not attracted too much attention from the outside cash flow. Looking at Google Trends, our index on Google Trending is at a relatively low level. Unlike the peak of 2017 ($ 20,000) or 2019 ($ 14,000), Bitcoin's Google Trending is currently around 15-20. The keyword "how to buy Bitcoin" is also at a relatively low level. This keyword increased at its highest level in mid-2017, when Bitcoin's price climbed, and peaked when Bitcoin's price peaked. Based on Google Trends, we will see this is just the beginning, when the outside crowd has not yet FOMO bought in, as well as the price goes up in suspicion of the majority of the market.

Actually, the price is very high, but the market is still very careful. Not seeing too many newspapers writing about Bitcoin (except for financial channels like VTV Money), there is no story about "Grandma selling vegetables" talking about Bitcoin. And when the crowd is still not FOMO, the price is still likely to move up as Bitcoin's chart and momentum are still relatively nice.

And when the chart and momentum are good, there are people who will not stand still like most traders today. They are people who are very good at seeing opportunities: multi-level teams / teams.

3. Ponzi's

And multi-level 1 again has, and will continue to grow in the future. In 2019 - 2020, we have witnessed an extremely impressive momentum run by multi-level teams like BTCV. Currently, it must be recognized that even if the price drops, BTCV will not die like Bitconnect in any year, but still remains around the $ 70 mark (and must also admit that whoever started in the first place was still profitable).

However, the above thing leads to an excited psychology among teams in Vietnam: Using Crypto to make products running MLM. And this will be extremely common, at least in Vietnam in the next 2 years.

Why Crypto? There are two main reasons for this.

The first reason is that the chart of Bitcoin is relatively strong, stimulating the greed of those who want to make money fast. And from Bitcoin, multi-level teams will steer to a different direction to flash new people. Sample sentences like "When Bitcoin is $ 1000, everyone will be skeptical. $ 10,000 everyone doubts. $ 20,000 everyone doubts. If you missed the opportunity with Bitcoin, buy coin abcxyz โ€is too familiar to all players for a long time, but very new to those who have never played Crypto or finance. And usually this is the object with the most money.

The second reason is that raising capital and trading Crypto in Vietnam is not yet sponsored by the state. Vietnam's legal framework is also relatively sketchy. So this is a "gold mine" for the multi-level groups out there. If unfortunately the cord collapsed, then the deceived person could only swallow bitterly, but who could sue? This is perhaps better than ever with iFan 2017.

In general, the fact that there is a new MLM wave entering the market is also a factor contributing to the market going up. Up to now, MLM is still one of the factors attracting new capital into the relatively strong market. MLM players tend to invite friends and relatives to play with them, pushing money into the market more.

4. Player psychology and market cycle

No matter how the player changes, the mentality of the player remains the same. Everything is still going cyclical, like the way humans have functioned from past to present.

The current stage in my opinion is the Disbelief phase, where the majority of market participants are people with little experience (and trauma) with Crypto. Therefore, when prices go up, people look at and doubt. Even though the player composition between 2016 and 2020 is quite different, the overall sentiment remains the same.

Meanwhile, those outside the market are looking at Crypto with two attitudes. Attitude 1 is generally still skeptical, and disbelieving. The second attitude is curiosity and excitement. Since the trauma has not been experienced yet, when looking at growth they will see opportunities. And after Disbelief will be Hope - the stage of Hope and recovery.

And these are the similarities between the 2 phases of Market 2016 and 2020.

For me, all are very good signs for a new bull season. However, this crypto bull season also has a LOT different from 2016-2017. And if you do not understand the rules of the game, you will most likely be left.

II. Different points.

1. Market background

The biggest difference between the bulls is probably the market and world scene. 4 years ago there was no COVID, the world was not facing a strong economic recession. And of course, no bailout package of several trillion dollars has been poured down by the US government with interest rates approaching flat.

America is not everything, however. To analyze Crypto, we have to look to China. After the Covid 2020 season, China stepped out in a blatant way, with a much more developed economy than those in Europe and America. And while Crypto is still a legal controversy in the US (Up to now, ETH and XRP are still disputed), China has voiced its support for Blockchain, and led the way. in currency / digital settlement.

And when the oldest was first, the juniors also followed. Gradually, the neighboring countries of China will also apply Blockchain as well as have the necessary laws for Crypto Market to develop. This is also good news for the market.

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Currently, many institutional investors, large investment funds, Wallstreet and Banking are participating in the Crypto market. Therefore, the rules of the game have changed a lot. Instead of just knowing a few concept tricks or technological manipulations to be able to show off chickens, most players now know Technical Analysis. Projects, including scam projects, also have to work a lot better. The current cash flow in the market is a relatively smart and knowledgeable one, so the market will be much more fierce. In 2016 - 2017, the concepts of leverage as well as Shorting exist, but are still relatively little known. By 2020, with traders knowing more Technical Analysis, derivatives and leverage grow like mushrooms. Buying and holding doesn't seem like an interesting choice anymore, at least for smart cash flow (as they can short hedge when holding coins).

This pool of smart cash flows at the same time makes the volume flow into the relatively larger market. It is no coincidence that USDT capitalization is so big. Even compared to 2016 when Market cap peaked at $ 800 billion, Tether's market cap was $ 2.2 billion. Currently, the market is reaching a capitalization of $ 500 billion, Tether USD capitalization has accounted for nearly $ 18 billion, 8 times more than the previous period, not to mention a series of other stablecoins such as BUSD, USDC, etc.

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This drives a change in projects as well as how money flows in the market. As before, money flowing into the Market is required to flow into Bitcoin and then flow into Altcoins. Most of the top 10 coins only have Altcoins / USDT pairs. (Even as of early 2018, Binance still doesn't have top coin / USDT pairs.) Therefore, if BTC increases, Altcoins will withstand a very strong heat shock, and when BTC drops, Altcoins will suffer even more severe heat shock. This impedes the development of both Altcoins Market and prevents Traders from being able to freely trade.

By 2020, most Altcoins will have USDT pairs. Therefore, the influence of BTC on them has been more or less reduced. Players trading Altcoins are also much more comfortable than before, creating a premise for the development of projects. And therefore, projects in 2020 are much better than before.

3. Project.

If most of the new projects in the 2016 - 2017 season follow the trend of drawing and applying Blockchain in all aspects of life (although most are not necessary), in the 2020-2021 season, the projects will be the perfect choice. much more.

It can be said that the cake projects in the current period are still relatively many, but many projects are really looking for a way to "Find a solution for a problem" rather than simply "Find a problem to solve" as before. And if 2016-2017, many projects focus on the payment segment (which is extremely difficult), now they are focusing on solving two problems: DeFi Development and Infrastructure Improvement (Infrastructure) of Blockchain.

Looking at DeFi's increasing Total Locked Value and the value DeFi is bringing, DeFi really has been one of the most evolving factors in the coming years. Ultimately, Blockchain has and is actually having a real effect, and this is what the majority of Blockchain projects in 2016 have been, are, and are still lacking.

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The opening of DeFi also brings a new source of capital from ordinary people who do not know anything about Crypto into the market, and that is why they will need payment gateways from Fiat - Crypto and vice versa. And one more thing, far different from 2016, and will create more opportunities for market growth.

4. Fiat - Crypto and Crypto - Fiat

From 2016 to 2020, it's a very long way. And indeed the writer must take his hat off to respect the parties who are still working daily to improve the experience of reaching Crypto. The loudest, perhaps to mention Binance.

It can be said that it has never been easier to buy Crypto. If in the past, you wanted to buy TRX, XRP or any Altcoins, you would have to find black markets, or separate parties like Santienao, Remitano (or in the US, Coinbase) to top up fiat, exchange for Bitcoin. , then use Bitcoin to transfer to exchanges like Bittrex or Binance to buy Altcoins. All will take a lot of time, effort, and money too.

However, with the development of Binance, you can even use a credit card to buy USDT or BTC. If not, you can trade USDT for cash directly via Binance P2P. Just transfer money from the Bank to the seller's account, USDT will be transferred to your wallet easily. And you can also withdraw in a very simple way, not as complicated as before. And not only with USD / USDT, Binance even allows for Crypto trading with currency pairs like Euro or British Pound. However, the writer has not experienced in depth about this feature, so I dare not write much. But it seems that across local markets, Local exchanges are offering this feature as well.

And as users everywhere have access to more Crypto, they will also be more likely to put money in the market. This is an essential factor driving the market up in the next coming period.

III. Conclude.

In general, even though Market Cycle and player sentiment are still the same, the Crypto market has been changing a lot in 2016-2020. For me, most of the changes are positive, and Development always presents a great opportunity.

However, to seize this opportunity, players also need relatively more knowledge than 2016. And to start, you can find and read the articles of BMV Academy for newbies.

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