Cold thinking during BTC pullback: befriend time and dance with the trend

Every pullback moment is a ticket reserved by history for the sober-minded. This article is sourced from an article by Daii and reproduced by Foresight News. (Background: Analysis: BTC is a healthy pullback rather than a bear market, five major indicators reveal adjustment or end). (Background supplement: Call for an annual purchase of $500 million BTC reserves, can Texas be the first to build an encryption utopia?). BTC broke below the $77,000 mark this week, currently oscillating around $80,000. The market seems to have entered another 'pullback moment'. Facing the price fluctuations, I believe many frens are pondering the same question: Is it time to 'get out of positions for hedging' or 'get on board on dips'? This question seems simple but is actually complex. Especially in the cryptocurrency market, short-term fluctuations are intense, various information noises intertwine, easily leading people astray. When we are in a 'pullback moment', a calm analysis is needed, shifting our focus from the immediate price fluctuations to examine the broader 'trend' and 'cycle' framework. Indeed, whether BTC can continue to move forward is a common question for all 'passengers'. But as we will discuss today, hidden above 'trend and cycle' are key clues to answering this question. Today, through the framework of 'trend and cycle', I will guide you through the mist and conduct a cold analysis of the BTC 'pullback moment' together. First, let's start by understanding the basic concepts of 'trend' and 'cycle'. A picture is worth a thousand words. The following diagram can give us a quick intuitive understanding of 'trend' and 'cycle'. Please note that the vertical axis of the diagram is a logarithmic coordinate, where the height from 0 to 1 equals from 1 to 10, designed to clarify early price changes. Trend: The continuous upward red arrow represents the long-term rising trend of BTC prices. Will this trend continue? This is the key question we will answer in detail later. Several important long-term indicators will give you confidence in BTC's future. Cycle: Four blocks of different colors represent different stages of a cycle. The division of stages in the first three cycles is relatively clear, but the division of the fourth stage starting from 2023 is not only incomplete but also highly controversial. This is also what I need to explain to you today. An important Reverse indicator should easily help you make a decision to 'get on board'. Through the above diagram, I believe you should have a more intuitive perception of trend and cycle. Now let's seriously understand what trend is and what cycle is. 1. What are trend and cycle? Understanding any market should first distinguish between the two key concepts of 'trend' and 'cycle', and the encryption market is no exception. Trend (Trend): The trend is the long-term direction of development, a grand and lasting force. It represents the most fundamental and core direction of things, like a rushing river, once formed, it is hard to reverse. Cycle (Cycle): The cycle is the short-term fluctuation presented in the development process, rhythmic changes around the trend line. In short, the cycle is within the trend. However, mere inclusion is not enough to express the complex relationship between them. If 'trend' is likened to a tree trunk and 'cycle' to the annual rings on the trunk. Just as a tree trunk determines how high and in which direction it will ultimately grow. However, the growth of trees is not smooth sailing; it is affected by factors such as seasons, climate, soil fertility, leaving 'annual rings' on the trunk. Applying this analogy to the BTC market. BTC's long-term trend is shaped by macro factors such as technological innovation, global adoption, institutional entry, policy evolution, determining the long-term upward or downward direction of BTC prices. Once this trend is formed, like a rushing river, even if the road ahead is winding, it is difficult to change its macro direction leading to the sea. BTC's short-term cycle is influenced by short-term factors such as market sentiment, macroeconomic views, sudden events, and capital flows, like the waves in the river, although tumultuous, they are ultimately temporary phenomena in the river of trends. In the BTC market, the alternation between Bull Market and Bear Market, the short-term price fluctuations, all fall under the category of cycles. However, many times, we cannot clearly distinguish between what is trend and what is cycle. Why is that? 2. Why is it difficult to distinguish between 'trend and cycle'? The reason is simple but deeply rooted in human nature and the complexity of the market. The human brain is naturally more sensitive to 'change', especially short-term and dramatic changes. Imagine standing in a forest, the swaying leaves in the wind, the squirrels jumping on the branches, are what initially attract your gaze, not the towering ancient tree. Similarly, in the 'digital forest' of Cryptocurrency, our brains are more easily drawn to daily price fluctuations, confused by short-term 'waves', and neglect the long-term 'rivers' - long-term trends. Especially in the BTC market, the intensity of fluctuations can be described as a 'digital stormy sea'. Within a day, a 10% or even 20% big pump or big dump in price is common. Under such intense fluctuations, investors' brains are like small boats in turbulent waves, constantly impacted by the looming waves, how can there be leisure to consider the vast ocean currents behind? Moreover, human nature inherently dislikes losses, seeking profit and avoiding harm. Price declines, account shrinkage, the instinct of 'loss aversion' makes us extremely anxious, wanting to 'stop loss' and exit quickly, how can we care about 'long-term trends'? Price big pump, the desire for 'greed' drives us to get on board due to fear of missing out, afraid of missing the opportunity to 'get rich quick', without calm consideration, is this the power of trend or just the pulse of the cycle? What's even more bizarre is that the cyclic fluctuations in the BTC market are often highly deceptive, they often 'change faces', disguised as a 'trend reversal', making it difficult to distinguish between true and false, hard to see the truth behind. Even more complicated is that the BTC market is filled with various 'noise' information, these 'noises' are like 'fog', interfering with our judgment, making it difficult to capture the true 'signal' - the guidance of long-term trends. Worse still, many 'noise' information is usually artificially created, smoke bombs deliberately released by market 'dealers' or 'institutions', aimed at confusing and misleading retail investors, to achieve their undisclosed purposes. For example, in a market decline, they spread various fear, uncertainty, and doubt information, creating panic, inducing retail investors to Cut Loss at low prices; and in a rising market, they release various optimistic messages, creating a cheerful atmosphere, attracting retail investors to buy at high prices. So sometimes, it's understandable why we can't distinguish whether the current decline belongs to a 'cyclical pullback' or a 'trend reversal'. So, what kind of situation is BTC in right now? Cyclical pullback. In fact, this answer hides an important premise - Bit...