Based on market cycle psychology, depression is the state where people have lost all hope in the market. They believe that the downtrend is a bottomless pit and the market will never again reach its former glory. This discourages everyday investors from entering the market when in fact, this is the point of maximum financial opportunity. Time and time again, markets bottom out when ordinary people have abandoned them.
This is exactly what we’re seeing in Bitcoin (BTC/USD). The hype that surrounded the cryptocurrency almost a year ago is completely gone. The interest over time, when looking at google trends, is at its lowest in 12 months. More importantly, many people believe that it can go significantly lower.
Current market sentiment maybe depressive but the charts show that the end is almost near. In this article, we show how Bitcoin may be transitioning from depression to disbelief.
A Comparison of Market Cycle Psychology Chart and Bitcoin Chart
Disbelief is the state where the market shows signs of life but participants ignore them. They do so because they think that the downtrend is not yet over and the rally is just another pump and dump scheme to slaughter newbies.
We believe Bitcoin is getting ready to make you a non-believer. To understand why we have this point of view, allow us to first show you the market cycle psychology chart.
Disbelief comes after a boring and depressed market. If you’ve been following Bitcoin’s price action since September, you’d know that the past few months have been the longest. Volatility has been almost non-existent. There were times when Bitcoin traded within a $10 range. At that point, we knew that Bitcoin was in a state of depression.
If you’re skeptical, the next chart should help alleviate your concerns.
Bitcoin daily chart over market cycle psychology chart
We overlayed the Bitcoin daily chart on top of the market cycle psychology chart and we have an almost perfect representation of market sentiment over the last twelve months.
Currently, the market is so depressed that…