Bitcoin nears ‘hope’ stage in the psychology of a market cycle

Bitcoin 51 m    Reading time: ~2 m

Financial markets, like the tides of the ocean, ebb and flow in a cyclical fashion. Throughout history, these markets have experienced a recurring pattern of highs and lows, driven by a complex interplay of investor psychology, economic factors, and market dynamics.

In this context, on Monday, May 29, crypto trading expert Ali Martinez posted side to side comparison of Bitcoin’s (BTC) price chart and the so-called Wall Street cheat sheet, which breaks down the psychology of market cycles and outlines different emotions that traders experience during those periods.

Citing visuals from the cheat sheet, Ramirez said that “Bitcoin is about to enter the ‘hope’ stage in the psychology of a market cycle.” In other words, the expert said that BTC is likely going to attract positive market sentiment in the next cycle, after going through pessimistic stages such as ‘panic,’ ‘capitulation,’ anger,’ and ‘depression.’

Bitcoin to enter more optimistic market cycles

Assuming that Bitcoin’s recent price action is aligned with the cheat sheet, the world’s largest cryptocurrency has been going through the ‘disbelief’ stage most recently, which is allegedly the usual emotion investors experience when a new trend is emerging after a bear run.

According to the sheet, this stage is followed by the ‘hope’ phase, during which an asset witnesses temporary consolidation and retracement, but investors feel more optimistic about its future potential.

‘Hope’ comes before a number of positive market cycle stages, including ‘optimism,’ ‘belief,’ ‘thrill,’ and ‘euphoria,’ the sheet shows.

Bitcoin price analysis

At press time, BTC was changing hands at $27.914, up 2.7% on the day. Over the past month, the leading crypto token lost around 4.5% of its value, due to a mix of factors, including investors’ concerns about the rising possibility of a new interest rate hike in June.

Bitcoin nears ‘hope’ stage in the psychology of a market cycle0

Still, Bitcoin remains sharply up year-to-date, soaring almost 70% since the start of the year in a remarkable rebound from its 2022 year-end levels.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.


Updated: 05/29/2023 — 10:00

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