Don’t Confuse A Bear Market Bottom With The End Of A Bear Market

Even Cycles Have Cycles

The initial stage of any bear market is usually the most deceptive. Oftentimes the market only realizes that a bear market is in play once it has already started. Denial is usually the most common response, which ultimately allows the bear to get its claws in on an unsuspecting victim. Once the claws are in, the market gets dragged down leaving behind it a trail of blood. This is pretty much how bear markets usually play out. However, the worst part of a bear market takes place when a bottom is reached. This is by no means the end of the bear market, it simply means that a lot of the major pain has now been absorbed.

A Further Concern

Even though at this point BTC hits its lowest level in the journey, it does not necessarily imply that alts follow a similar outcome. From here the bear market pushes on and altcoin investors often lose patience. This can mean that alts can continue to edge lower, despite BTC having cemented a bottom. This can also be a bit of a mixed bag in that some may remain relatively stable, while others continue to lose ground over time. Selecting the right alts can be rather challenging, which is why many turn to BTC for shelter even after a bottom is in. Investors then begin to observe the performance of alts before reallocating capital.

Signs Of An Approaching Bottom

In a similar way that investors choose to be in disbelief at the offset of a bear market, they continue to act in a contrary manner. Investors often shift into an overwhelmingly bearish view just before the market is about to bottom. The moral of the story here is that the market is always late. Frontrunning is the only way to truly position yourself effectively in any market.

The winter ahead may indeed be long and cold but it is beginning to look as if we are fast approaching a bottom, which will likely be retested. However, a lot relies on the FED at this point and how they choose to address the overwhelming issue of inflation going forward. Very uncertain times ahead.

Leave a Reply

%d bloggers like this: