Now is the time for research and learning because when the fun begins, we need to be prepared.
A Sense of Déjà Vu in the Market
If you joined the crypto market during the last bear cycle or earlier, you might feel the same familiarity. This sense of recognition is a significant advantage—your past experience in crypto lays the groundwork for the next bull run.
Every bull and bear market differs slightly, but the overarching patterns remain strikingly similar. Based on my experience, here’s how the past teaches us to recognize the beginning of the next bull market.
The First Bull Run and Crash
I entered crypto in late 2017 after reading a BBC article about Bitcoin hitting new all-time highs. My initial FOMO led me to invest in Bitcoin, which quickly doubled in value. Excited, I shifted my focus to newer, cheaper altcoins, relying on logos and vague promises rather than deep research.
The result? I lost most of my funds.
This is a common story for newcomers: greed, naive optimism, and lack of experience lead to losses. Many left crypto permanently, but those who stayed and learned from mistakes gained a better chance at success.
Lessons Learned:
- Avoid impulsive investments—thorough research is essential.
- Diversify wisely—not all shiny new tokens will succeed.
The Second Bull Run and Crash
Curiosity and greed kept me engaged post-2018 crash. By 2020, new innovations like AMPL’s elastic supply and DeFi liquidity mining (e.g., COMP, BAL, YFI) reignited excitement.
DeFi Summer introduced:
- Yield farming: Earn tokens by depositing assets into protocols.
- PvP (Player vs. Player) dynamics: Profits relied on outmaneuvering other traders.
But the hype couldn’t last. As new pools diluted attention and inflows slowed, the market collapsed—again due to excessive token printing outpacing fresh capital.
Key Takeaways:
- Innovative tokenomics drive hype cycles, but sustainability requires real adoption.
- Timing exits is critical—early entrants profit; latecomers suffer.
How Bull Markets Begin and End
SecretsOfCrypto’s "Road to Altcoin Season" summarizes the flow:
- New fiat enters via Bitcoin.
- Funds trickle into large-cap alts (e.g., ETH).
- Momentum shifts to mid/low-cap gems.
But before new money arrives, crypto-native leverage (e.g., staking, lending) recycles existing capital, priming the pump.
The Crash Formula:
- Inflation > Adoption: When daily token issuance exceeds inflows, prices collapse.
- Attention scarcity: Too many projects fracture focus, causing confusion.
This pattern repeated in:
- 2017 ICOs (utility tokens).
- 2020 DeFi (governance tokens).
- 2021 NFTs (PFP mania).
The Next Bull Run: New Narratives, Same Mechanisms
We’re now in a pre-bull phase, akin to pre-DeFi Summer. Two narratives stand out:
1. Restaking (EigenLayer)
- Concept: Ethereum validators “rent out” security to other chains for higher yields.
- Opportunity: Protocols like Stader’s rsETH incentivize early participation.
- Risk: Overcollateralization could strain ETH’s security model.
2. Bitcoin DeFi (Stacks, sBTC)
- Why?: Bitcoin lacks DeFi infrastructure—Stacks bridges this gap.
Key Projects:
- Alex Protocol: BRC-20 wrapper for trading Bitcoin-native assets.
- sBTC: Trust-minimized Bitcoin peg for Stacks-based DeFi.
When Will the Bull Market Arrive?
Macro improvements (e.g., peaking inflation, regulatory clarity) suggest:
- Late 2024: Bitcoin could retest ~$69K ATH.
- 2025: Full-blown altseason with new ATHs.
Action Plan:
- Research restaking/Bitcoin DeFi now.
- Watch for new token emissions—early participation pays.
- Exit before overinflation—set profit-taking rules.
FAQ
Q: How do I spot the next big narrative early?
A: Monitor developer activity (GitHub), VC funding, and emerging tokenomics.
Q: Should I hold tokens long-term?
A: Only if the protocol demonstrates sustainable utility—most don’t.
Q: What’s the biggest risk in crypto cycles?
A: Psychological bias: FOMO and sunk-cost fallacy trap late investors.
👉 Mastering crypto cycles: A strategic guide
The key isn’t predicting the top—it’s knowing when to walk away.