1.1.0. Five Important Points
Note the following five important details about price movement of a cryptocurrency:
(1). Financial Wave is Repetitive
These three – Ascent, Descent, and Sideways – form a complete Financial Wave of price movement.
Therefore, remember that for every Financial Wave, the price of the instrument goes up (“Ascent”) to reach its Peak, then starts to come down (“Descent”) until it hits the Bottom, after which it swings Sideways for some time until there is a stimulus that will trigger it to start to rise again.
This is the characteristic feature of any financial wave. The wave keeps repeating as long as the financial instrument is viable. In other words, as long as a crypto project is viable, this cyclical pattern keeps repeating.
(2). Financial Wave is the Crypto Cycle
In the Crypto Market, the Ascent Period is the Bull Season (also called the Bullrun). The Descent Period is the Bear Season (also known as the Crypto Winter), while the Sideways Period is the Plateau Season (also known as the Plain Season).
This means the Financial Wave of a crypto is seen by its Crypto Cycle. See Module 3 of Grade 2 of the Secondary SOC.
(3). Difficult to Predict Accurate Peak and Bottom
One interesting aspect of price movement is that it is often very difficult to accurately predict the Peak and the Bottom of a Financial Wave for most financial instruments, including cryptocurrencies. Most such predictions are mere speculations.
This is a very important consideration you should always remember.
When the price of a crypto is in the Ascent movement, many amateur traders are tempted to hold on until the price reaches its Peak before they take their profit. While waiting for the Peak, they wake up one morning to see the price movement has tumbled downwards, leaving them with regrets!
As such, smart traders plan differently. They set specific target for their profit taking. They may set profit target as follows: Sell off 10% of their coins once 25% profit has been made; sell off 30% of their coins once 50% profit has been made, etc.
Don’t forget: Smart traders don’t try to rely on the elusive Peak price before they take their profit.
(4). The Longer You Hold, the Higher Your Profitability
For a good instrument, the more the number of financial waves you allow your investment to pass through, the more profits you will make from the investment.
This is another important point you should always remember. You can easily see this fact with Bitcoin. As at the writing of this manuscript, Bitcoin price movement has passed through three completed waves (see Table 7 on Page 286):
• 1st Wave: 2008 to 2016
Ascent started at Bitcoin birth in 2008/9, reached its Peak in 2013 following the 2012 Halving, and then started its Descent to reach its Bottom (Plateau), where the price fluctuated sideways upto 2016.
• 2nd Wave: 2016 to 2020
Ascent started following Bitcoin Halving in 2016, reached its Peak in January 2018, and then started its Descent to reach its Bottom (Plateau), where the price fluctuated sideways upto 2020.
• 3rd Wave: 2020 to 2024
Ascent started following Bitcoin Halving in 2020, reached its Peak in January 2021, and then started its Descent to reach its Bottom (Plateau), where the price fluctuated sideways upto 2024.
• 4th Wave: 2024 to 2028
As at the writing of this event, 2024 Bitcoin was yet to occur. It is expected to happen between April and June 2024 and this will initiate the 4th Bitcoin Wave.
Interestingly, those who hold on to their Bitcoin from the 1st wave have made more than 500 000 percent profit.
Indeed, for a good crypto project, the more financial waves you allow your investment to pass through, the higher your profitability. Thus, the longer you hold, the more your profitability. No doubt, time is money.
(5). Each Wave Results in Further Maturity
For a good crypto project, like for most other financial instruments, each wave or cycle of a financial movement sets a higher Plateau than the previous.
For example, the price of Bitcoin at the Plateau Period for the past three waves are as follows (see Table 7 on Page 286):
• 1st Wave (2008 to 2016): 540 to 920 USD
• 2nd Wave (2016 to 2020): 4030 to 15 479 USD
• 3rd Wave (2020 to 2024): 20 125 to 45 260 USD
You can see that for each wave, a new Plateau level was set for the Bitcoin price.
In other words, each cycle or wave further matures a financial instrument. Therefore, one way to predict a good crypto project is to observe its previous price patterns. Was a higher Plateau price set with each subsequent cycle? If yes, that is a crypto project to watch out for.
