SuperEx丨BTC approaching $100K signals the start of the bull market’s second phase.

5 min read1 day ago

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Bitcoin’s price approaching $100,000 in November 2024 is not just a groundbreaking milestone but also a potential indicator of the bull market entering its second phase. Historically, Bitcoin’s price movements have been closely tied to cyclical bull and bear markets, with each bull market typically consisting of several distinct phases.

This article delves deep into the characteristics of these phases, explaining why the $100,000 mark could signal the beginning of the second phase of the bull market, while also exploring the potential future market trends.

Decoding the Phases of a Bull Market

A bull market is shaped by a combination of market sentiment, technological advancements, and macroeconomic factors. For Bitcoin, these phases can generally be categorized as follows:

1. Initial Accumulation Phase

· Characteristics: Prices remain low, with minimal volatility, and most investors adopt a wait-and-see attitude.

· Driving Forces: Long-term investors (often referred to as “smart money”) quietly accumulate at low prices. This phase typically occurs at the tail end of a bear market when sentiment is broadly pessimistic, but on-chain data may already show an increase in holders and a decline in selling pressure.

· Historical Example: From March to October 2020, Bitcoin gradually rose from the pandemic-induced low of $3,800 to $12,000, drawing renewed attention from early adopters.

2. Breakout Phase

· Characteristics: Prices begin to climb rapidly, market interest surges, and new funds flow in. Mainstream media starts reporting on the “return of the Bitcoin bull market,” enticing retail investors to join.

· Driving Forces: Increased demand, reduced supply (such as delayed effects of Bitcoin halving), and institutional entry fuel the rally. This phase is characterized by a mix of growing conviction and early demand.

· Historical Example: Late 2020 to early 2021 saw Bitcoin skyrocket from $12,000 to $40,000, igniting a fresh wave of market enthusiasm.

3. Exponential Growth Phase (Main Bull Run)

· Characteristics: Market sentiment reaches euphoric levels, speculative capital floods in, and prices exhibit exponential growth. This phase often features signs of a bubble and alternating waves of “fear of heights” and FOMO (fear of missing out).

· Driving Forces: FOMO among new retail investors, ongoing institutional purchases, and thriving trends like DeFi and NFTs drive prices higher.

· Historical Example: In Q1 2021, Bitcoin soared to nearly $65,000, alongside synchronized rallies in Ethereum and altcoins. The DeFi sector’s market capitalization also expanded significantly during this period.

4. Peak Bubble and Correction Phase

· Characteristics: Prices fluctuate wildly after reaching all-time highs, some funds exit the market, and adjustments follow.

· Driving Forces: Macroeconomic uncertainties, excessive leverage liquidation, and profit-taking by institutions temper the rally.

· Historical Example: From April to May 2021, Bitcoin plunged from $65,000 to $30,000, with altcoins experiencing even sharper declines.

The Transition from Phase One to Two: $100,000 as the Next Milestone

Currently, the market is transitioning between the first and second phases of the bull market. Bitcoin surpassing $100,000 would signify the true start of the second phase, triggering powerful FOMO sentiment.

If this milestone is not achieved, the market risks a sharp pullback — one that could be severe given the scale of recent gains.

Three Key Factors Behind the $100,000 Milestone

1. A Surge in Market Sentiment

As Bitcoin nears $100,000, optimism is spreading across the market. Increased media coverage and heightened social media discussions are drawing in new investors. On-chain data reveals a decrease in long-term holders (those holding Bitcoin for over a year), signaling that some investors are cashing out, while fresh capital flows in.

2. Brewing New Hot Trends

Compared to the DeFi and NFT trends of 2021, 2024’s focus might shift toward Bitcoin payment ecosystems, Ordinals NFTs, and cross-chain asset flow innovations. Breakthroughs in these areas could expand the market’s imagination, fueling the second phase of the bull market.

3. Technical Analysis Supports the Second Phase Theory

Historical bull market charts suggest that breaking key psychological thresholds (such as $100,000) is often accompanied by surging trading volumes and increased on-chain activity. This signals heightened participation from retail investors, boosting market liquidity and volatility.

Crossing the $100,000 mark would also deliver a psychological release for investors, acting as a powerful catalyst for the main bull run.

If Bitcoin successfully breaks through $100,000, the next target could range between $125,000 and $150,000. Key drivers include expanded institutional adoption, continued inflows of new funds, and favorable macroeconomic conditions.

However, the second phase of a bull market is typically marked by short-term corrections following significant price surges. Even if Bitcoin crosses $100,000, the market may witness healthy pullbacks after reaching certain highs, as price movements are rarely linear.

Conclusion: How to Navigate the Second Phase of the Bull Market

Bitcoin nearing $100,000 is not just a psychological milestone but a crucial signal that the market is entering the second phase of the bull market. In such an environment, investors should consider the following strategies:

1. Invest Rationally and Avoid Chasing Highs: Stay focused on the long-term value of assets and resist being swayed by market sentiment.

2. Diversify Investments to Reduce Risk: Allocate a portion of funds to other major crypto assets or DeFi projects to mitigate the volatility of single assets.

3. Monitor Macro and Regulatory Developments: The bull market’s sustainability depends significantly on the global economic environment and supportive regulatory policies.

Bitcoin nearing $100,000 is just one milestone in a broader market evolution, reflecting the continued maturity of the crypto ecosystem. For investors, the key to seizing this opportunity lies in understanding market cycles and preparing for the long term.