The Accumulation Period Before the Bear Market Arrives — Interpreting the Cryptocurrency Market Value Cycle Under US Stock Performance

The mid-term rally in the crypto market is nearing its end, and against the backdrop of strong performances in traditional assets like US stocks and gold, a bear market is only a matter of time. This judgment is not baseless but based on the fundamental laws of capital markets—funds always chase expectations, and when reality hits, they sell off.

Macro Imbalance: Strong US Stocks and Gold, Crypto Market Cap Lagging

The current liquidity injection exceeds previous levels. Impressively, while policymakers show a tough stance on the surface, actual operations remain accommodative. The market cap of US stocks and gold has expanded several times compared to historical highs during this cycle, while the crypto market cap remains stagnant. Behind this phenomenon of global assets rising together, with crypto market cap lagging, lies a macroeconomic warning—market capacity and industry fundamentals are signaling that there is still room for prices to rise.

Echoes of Historical Patterns: Expectations from Past Cycles

History never repeats exactly, but it often rhymes. By examining the endings of the last two bull markets, we can identify clear patterns.

In 2017, after four years of sideways movement, the market cap suddenly exploded in the last three months, jumping from $50 billion to $800 billion.

The story in 2021 was similar—after four years of consolidation, the market cap soared from $600 billion to $3 trillion during the final phase of the bull run.

This pattern reappears this year, with the market cap still in consolidation. According to the logic of historical cycles, the standard target for this cycle is $75 trillion, with an advanced target of $100 trillion. But before reaching these heights, the market will still need to go through corrections and a bear market washout.

Investor Psychological Traps: Why “One Lives, Ten Thousand Die” in Bull Markets

One of the key principles of a bear market is that participants find it difficult to pass the six tests of a bull market.

First is information asymmetry—not everyone can recognize the arrival of a bull market in time.

Second is confidence—even if one recognizes the bull, the dual shocks of price charts and news can trigger fear.

Third is action—knowing it’s a bull doesn’t always translate into taking action; psychological hesitation causes missed opportunities.

Fourth is execution—buying in is not enough; sticking to positions amid volatility is challenging.

Fifth is timing—holding positions is one thing, but exiting at the right moment is another. Many investors hold onto gains of hundreds of times but end up losing everything, while others cash out early with small profits.

Sixth is the market’s selection mechanism—bull markets do not require everyone to believe. Through the process of mutual selection between the market and retail investors, only the truly steadfast holders will come out on top. It’s a dual test of capital and psychology.

Three Keys to Cycle Success: Direction, Chips, Patience

Industry insiders repeatedly emphasize that the core elements in market cycles are only three: judgment of the overall direction, decisive accumulation of chips at the bottom, and sufficient patience.

All three are indispensable. Correctly identifying the direction but failing to accumulate chips at the bottom means missing out on gains in the bull market; having chips but misjudging the direction results in losses; having the right direction and ample chips but lacking patience to hold at high levels also leads to failure.

When the bear market finally arrives and the linkage between US stocks and crypto markets becomes more apparent, both opportunities and risks will emerge simultaneously. The key is whether investors can overcome psychological barriers and stick to their initial judgments.