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August 08, 2022

Does History Rhyme? A Hodlr's Analysis Vol. 1

(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

Since I began investing in Bitcoin 6 years ago as a younger lad, I’ve seen more crypto crashes than any healthy individual should. I had expected Bitcoin to hold the $30k level during the summer months, before capitulating down to the $20k range around September, similar to the $6k level during 2018. However, the market left my thesis in the dust.

The latest dump to $17k was perhaps the worst capitulation Bitcoin has seen, and now that the price has started to recover alongside the NASDAQ, people are asking,

“Is this market pump a dead-cat bounce, or is the bottom in?”

Economist Lyn Alden says, “The best time to buy is during periods of forced selling from institutions”. Following the Terra Luna, 3AC & Celsius collapses, the market couldn’t get much more bearish in June. It was a great time to buy, right?

In hindsight 1 month later, YES! However historically, Bitcoin tends to bounce from a low, and come back down to retest the bottom one more time, before moving higher for good. The 2020 covid capitulation is a perfect example of retesting the previous cycle’s bottom. Bitcoin hasn’t lived through a global recession before, and due to the global economic environment & political tensions, I think it pays to be patient.

Given the recent comments of the Fed & price action, I’m of the humble opinion that Bitcoin & ETH have most likely bottomed, but that prices will stay down at these levels for a few more months at least.

Should the market come back down to touch the $19k level again, I’ll be ready to buy heavier. In the meantime, I’ll be here continuing to DCA (dollar-cost average) into blue-chips weekly, and building DeFi & NFTs for the next bull run.

Some say history repeats itself... I’m in the camp that it rhymes.

Hayden Todd

Product Manager at Ember Fund

Investing in BTC since 2016


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