If you were involved in crypto and bitcoin back in 2017 you probably remember how volatile even the bull markets were.
Most like to talk about how it went from roughly $1k to almost $20k in the course of the year and sort of romanticize it in a way.
Saying things like all you had to do was buy at the beginning of the year and hold until the end of the year and you made 20 times your money.
However, that was hardly the case...
Bitcoin had 6 corrections of roughly 30% from the time the bull market started in late 2016 to its peak in late 2017:
Many remember almost a straight line up, but 30% corrections followed by 100% surges were pretty much the entire cycle.
Michael Saylor says that the volatility this time around is likely going to be less now that institutions are here.
In fact, he even said that 80% corrections are no more in this Podcast Series the other day:
He said that was evidenced by the fact that the recent correction only went down around 31% or so instead of an 80% collapse.
However, I disagree.
I do agree with Michael Saylor that perhaps we see less 30% corrections this time around, I mean having 6 of them in a 16 month stretch is pretty extreme.
But I don't agree that we won't see another 80% correction.
Animal spirits are going to take over like they always do and drive the price up higher than it "should" be.
Once it gets high enough and it runs out of buyers, the price will topple over just like it always does.
The end result will be a brutal bear market that takes prices down something like 80%.
It's the same pattern we've already see play out 3 previous times, in fact it's 3 for 3 thus far.
This time will probably be no different.
After going up to something like $200k at the peak, I expect we will see another massive bear market that takes the price down 80% or so over the course of a year. A 40% drop from $200k would take the price back to $40k or so.
Ironically enough, anyone that sold at $40k and is waiting to get back back in may get a chance at their sell point, except they may have to watch the price go to $200k first.
In conclusion, I agree that overall volatility may continue to decrease as we go forward, but I still think we are going to see another brutal market after we peak that takes prices down roughly 80% from the top.
History doesn't always repeat, but it sure does rhyme an awful lot.
Stay informed my friends.
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