The cottage is dancing wildly, and Musk is going backwards. Is the bull-bear cycle about to start switching?

Putting aside the fog, the driving force of the current bull market is still the institutions, the cottage tide is actually not that significant.

One of the questions we were asked the most during the May 12 Sina Weibo live broadcast was: When will the bull/bear cycle come? And our last article discussed whether the rampant junk coins represent a bull market on the way?

The V-God donation on May 13, which essentially strengthened the morality of MEME coin and gave it more of a story, didn’t necessarily seem like a negative. But on the other hand V-God’s brutal sell-off shows the industry’s elite protest against MEME and Animalcoin as a whole.

However, Musk’s attack on traditional POWs consuming energy and the claim to be looking for a new cryptocurrency that consumes less than 1% of Bitcoin’s energy seems to be triggering the next wave of cottage coins. It is well known that cottage coins are less POW. Musk’s interest in dogcoin continues unabated, with his latest statement to get involved in improving its trading capabilities.

On May 13, there was an increase in the cottage coin index compared to May 12. Forty-three of the top 50 tokens have outperformed Bitcoin in terms of returns over the past 90 days.

The cottage is dancing wildly, and Musk is going backwards. Is the bull-bear cycle about to start switching?

The summer of cottage coins is still not over, will it accelerate the bull-bear transition?

There is a view that the crazy zoo coins will be an important factor in accelerating the bull-bear transition when the bull-bear cycle shifts, because analytically, the crap projects generally have three characteristics.

First, apart from the rise and fall of the coin price, these projects have no external extra value of income. Therefore, if someone makes money, someone must lose money.

Secondly, people know that junk projects go to zero at any time, so they are all speculative short term, with extremely short holding time, extremely low loyalty, and extremely low tolerance for losses by retail investors.

Third, the junk project marketing power is very strong, attracting a large number of retail investors outside the circle. Combined with the first two points, the plunge came when a large number of retail investors outside the circle generated a large number of losses, causing huge pressure at the emotional level, and even causing huge pressure at the policy level. This is also the logic of the 2017-18 collapse.

But: 2017 and 2021 may not be comparable

Chatting with Bitcoin Fawn’s chief researcher Lu Jiayi, he said: 2017 and 2021, in fact, are difficult to make a simple analogy. If you look at bitcoin’s coin price trend alone, the market may now have stepped into August or September 2017; content-free junk coins are flying all over the place, again a bit like just entering the second half of 2017; and the cottage season market started and bitcoin’s ruling value broke down, which is more akin to the second quarter of 2017.

So in fact, from 17 years of experience, cottage season is precisely not the tail end of the bull market, but the imminent top. From 17 years, the core reason is that cottage coins have pulled in a lot of off-site newcomers with capital participation. This is the reason why many retail investors believe that the top is not yet in sight.

However, this simple analogy is also wrong.

Can the experience of 2017 be repeated in 2021? We think it is almost impossible. Essentially, the two driving forces are completely different. 2017 was driven by retail investors, and the cottage season pulled in a lot of retail investors, so the bull market started to climb to a higher peak. Coming to the top and then falling, there was the aforementioned crash effect.

Putting aside the fog and pointing straight to the core: the driving force of this bull market is completely different , the essence comes from the epidemic impact of the United States crazy money printing, so a large number of institutions to buy bitcoin, mining machines, ethereum, etc. to fight inflation.

Bitcoin is already a $1 trillion market cap, ethereum is climbing like crazy, and the current market cap is already half of bitcoin, and it is expected that it may even approach or even exceed bitcoin’s market cap after the completion of EIP-1559 in July. All kinds of animal coins are coming together with a lot of momentum, but they are less than 1/10th of Bitcoin’s market cap, including dogcoin, which is the world’s “number one” crazy cry for orders.

So, of course, when we talk about the transition of the bull and bear cycle, we have to go back to our roots and still point directly to the changes in US monetary policy. The Federal Reserve has proposed many indicators to judge the adjustment of QE, such as 75% vaccine completion rate, 2% inflation, good new employment for many months, etc.. When the inflation rate came out in April and grew at an alarming rate, global cryptocurrencies and stock markets fell, which is the core reason.

It is very clear that there are no eggs under the tide, zoo coins, cottage coins and junk coins, which rely on market sentiment, and it is by no means possible to break away from bitcoin and ethereum to get out of the independent market, as was the case on the morning of the 13th. Ask: If bitcoin falls below 30,000 and ethereum falls below 2,000, won’t cottage coins mostly go to zero? If you believe that, then it will come true.

When we look at the real dynamics that drive the industry, for the zoo animals, we really just need to look at it as part of the multiculturalism of cryptocurrencies and not have to be too FOMO or panic. One implication is that maybe all future projects that are in the marketing test will become more popular and interesting, and all kinds of animals may have to be underused.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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