The duration of this bear market

I would like to talk about the possible duration of this bear market.

1. From the perspective of cycle duration, if this bull run that started on July 13 no longer returns to the mid-axis oscillation position but becomes the starting point of the next bull market, then this bear market only lasted 8 months, which seems too short.

By comparison:

The 2014~2015 bear market lasted 1 year and 11 months.

The 2018~2019 bear market lasted 1 year and 4 months.

Therefore, 10~12 months is a more reasonable time span for this round of bear market.

2. The ETH merger and its 90% reduction in issuance are positive news for the value of Ethereum. This is similar to BTC halved supply that impacted the supply and demand relationship, but it takes time for this this positive news to accumulate, probably after a couple of months when less coins are issued, the supply-demand ratio will be reflected in the price.

Therefore, according to the history of BTC halving, the price started to rise a few months after the halving [Figure 1–3], In 2016 the Bitcoin price rose before the halving [figure 2] and then fell back after the halving.

Figure 1
Figure 2
Figure 3

3. The Ethereum price basically doubled from its lowest point before this merge. That’s a significant uptick and is based on the expected timing of the September 19th merger, assuming all goes well. In my experience as a programmer, the implementation of such large software projects is often delayed.

However, the merger will not be delayed. The ETH hard fork at the end of June pushed up the difficulty bomb around mid-September [Figure 4], and about two months after the difficulty bomb, the block time was extended to more than 20 seconds(which will lead to severe transaction congestion).

Figure 4

In other words, the development team is very confident that the merger will be completed by November (otherwise the difficulty bomb would have been postponed for a longer period of time, at the end of June).

The following scenario is likely to be: after the merger of the last test network Görli from August 6th to 12th, the merger scheduled to take place on September 19th will be postponed to the end of October to resolve the issues that have arisen.

Yes, you can understand that I’m taking precautions for the merger delay and the resulting price drop.

Figure 5

4. Although ETH value has doubled from the bottom of $881, it doesn’t mean the bull run is coming. The data shows that the gas fee continues to decline, and it even dropped as low as 3 Gwei (Figure 6, logarithmic coordinates, check the daily low point according to the K-line for gas fee), indicating the on-chain demand for ETH is at multi-year low.

Figure 6

5. ETH is now close to BTC in 2015 in terms of volatility, which had a similar trend: After hitting the lowest bottom of $152.4, BTC went sideways and visited $300 for three times (Figure 7), but the bear run didn’t come to an end until BTC hit $502.

Figure 7

6. However, we have passed the rock-bottom price of this bear run because:

a. Both of the bear markets in 2014 and 2018 plummeted to the lowest point due to the tremendous falling momentum in the final stage of bear market and then went sideways. The current bear run repeated this script.

b. The lowest bottom of the current bear run on June 18 resulted from:

①The Federal Reserve has carried out rate hike and reduced its balance sheet.

②3AC and other large institutions went bankrupt.

③Multiple small and medium-sized exchanges rug pull.

④Various on-chain DeFi projects got liquidated.

That rock-bottom price resulted from a large number of negative conditions and the extreme panic of market sentiment (Figure 8: The Crypto Fear & Greed Index — the biggest deep hole in history). It’s hard for Bitcoin to visit a lower bottom price in the future since it is difficult to accumulate those extreme conditions again.

Figure 8

7. ETH is expected to return to $1180–1380 in the subsequent waves, and then start to rise after ETH 2.0 merge under the effect of 90% ETH’s reduction.

8. My prediction on June 14 now has a 90% probability of success.

So, have you successfully made a bottom fishing?

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