Lets get some of these standard disclaimers out of the way:
1. This is part 1 of 2 in my series. Part 1 will give more of a crypto market overview as a whole rather than ICX specifically. I will focus on the token more in-depth in Part 2.
2. This is not investment advice. All thoughts are purely my own opinion and thus, very speculative and subjective at best
3. I’m certainly not insisting these scenarios “will/must happen no matter what” but rather trying to make a case why the chances of them playing out are actually not that unrealistic.
4. I try my best to provide some general, objective advice throughout this piece. Would suggest not nitpicking at some seemingly outlandish claims, but rather try to focus on the bigger picture I’m trying to convey.
5. Follow up to the previous points, I’m aware none of these theories are “rocket science”, but general, simple observations. Occam’s razor ftw!
History of bull and bear markets in crypto — generally cyclical
If you think about it, the cryptocurrency market itself is still in its infancy stages when you compare to how long other asset classes such as equities, fixed income, and currencies have been established. For a quick comparison, FX has around a 1.5 trillion average trading volume, which is easily 1000x of BTC. Add on top of that the lack of clear cut regulations and it’s no secret that crypto is widely regarded as a manipulated market.
Many attempts have been made to model the behavior of the market historically. One theory that’s risen in popularity over the past couple years is the “4 Year cycle” by Bob Loukas. He has an entire video series that goes into detail about this that I suggest checking out (original video), but to tldr it — Bitcoin tends to move in 4 years cycles, where the first 3 years are a bull run (the 3rd year typically being parabolic in the late stages) followed by 1 year of a bear market. If you look at the past decade, his claim seems to be true for the most part: 2011–2013 was a major bull run followed by a catastrophic crash in most of 2014. 2015–2017 is probably the most fresh in everyone’s minds with 2018 again ending the party with apocalyptic conviction. If we extrapolate this (and I certainly acknowledge past performance doesn’t guarantee future results), what will 2019–2021 bring?
Lets add onto the fact compared to 4 years ago, the market is mature more than ever from a fundamental perspective. The legitimate projects have ramped up funding, business relations, and the technology. It’s hard to argue against the trend that there is rising interest in crytpocurrency adoption as evidenced by the moves from institutional money and even figures who once strongly renounced cryptocurrencies. “That makes them more attractive as investments, not less.” For a full reflection on similar comparisons to previous market cycles, please read this article.
Main takeaway message: Crypto has been historically cyclical so far and there seems to be some strong suggestions another bull market is imminent now that we’ve weathered the recent bear market.
New bull markets tend to be bigger than the last
“Does all of this mean prices will stop going down anytime soon? Does it mean the next bull run is around the corner? Who knows. There’s always a chance that 2017 was really “the last one” — but history indicates otherwise.”
For fun, I took a “historical snapshot” of the peaks and troughs of Bitcoin’s cyclical price history. Lets have a look at the first bull run:
Lets now fast forward to the worst of its subsequent crash:
And yet again, lets check out the peak of the following bull run:
Few observations here: 1. The entire market grew a significant amount when comparing from very bottom to the top. 2. Some of the top projects in following bull markets rivaled Bitcoin’s marketcap from previous cycles (Rank 10 IOTA $11B in 2018 vs Rank 1 BTC $11B in 2013). 3. Even many irrelevant “shitcoins” were along for the ride and grew considerably in “value” despite offering no fundamentals. If this trend holds while the market also matures, can you imagine how much the legitimate projects will appreciate over time?
“Outlier” observation: Some projects in crypto don’t have steady, sustained growth but rather move in unpredictable, out of the blue, explosions — whales’ doings perhaps?
Going back to my earlier stance on manipulation, I’m a strong believer that many of the “real gems” of crypto are being manipulated to some extent for whales to accumulate massive holdings.
Lets take a look at XRP for example (just to make it clear, I think XRP should not be in the top 10 and doesn’t warrant its current status, but this is still a good example in terms of price action.)
For nearly 2 years, XRP price ranged stayed between $0.004 and $0.006 before doing an incredible 75x+ to $0.45 all within a month around April/May of 2017. For the remainder of that year, it was more or less a “stablecoin” of $0.20 before another massive pump to $3+ all in the span of a month later that year.
Lets take a look at a more “accepted” crypto in Neo, it has a similar narrative: For almost a year, it struggled to be no higher than $0.20. Then summer came along and it had another explosive growth to $45 before retracing again, went through another so called “accumulation” before finally peaking at $150 at the height of the bull mania. It’s just the nature of the market that so many projects fare like this for seemingly months, if not years of dormancy before finally awakening the beast.
My theory — ICX may potentially be within this category that may seem explosive growths down the line rather than a steady trend. Until we see another clear bull run though, expect a lot of boredom price action wise barring some random scam pumps and subsequent retraces.
People might say but what about Chainlink? Why are they popping off? My honest brutal answer: it’s overrated (please don’t mistake me calling something overrated vs saying something is shit. I think LINK is a fine project but is and has been way overhyped). Bold take: I think ICX will overtake it in by the end of the next bull run, if not, at least give it a good run for its money.
Main takeaway message: Don’t be surprised by years of sideway movement with the massive “pumps” happening out of nowhere for certain projects.
A quick different perspective: Market is still very irrational
Following up to what I said about the legitimate projects eventually taking their rightful place in the pecking order, look at the current rankings by marketcap. XRP is # 4. Bitcoin SV is #7. LTC is somehow still #10. Tron is 16. UNUS SED LEO (seriously wtf is this?) is 17. Ethereum Classic 23, Dogecoin is 30. Do you really think these are accurate reflections of the “True” intrinsic values of these projects? I certainly don’t think so, but to each their own.
Some friendly advice
To quote a wise man: “If you’re invested in a project, and you believe in it, you do that. If you believe that your project is worth investing in, and you know that it has an excellent value proposition, what exactly are you worried about? Let me tell you something right now. People who are successful investors aren’t spending time on Reddit looking for a reason to invest in a new blockchain project, and opinions from people on socials aren’t swaying them. You do your own thing, and worry about yourself.”
Everyone is different. People will have strong opinions about certain projects more than others. And that’s fine. I’m happy to share my perspective and opinions candidly if somebody asks. What I don’t like to do is stare at the charts every hour and tweet “ICX is gaining some heat, we finally going to $1” when it moves 2% and later save face by tweeting “Buy this dip! It was obvious ICX was going to retrace” when the price goes back down. It just reeks insecurity and I just find it counterproductive that I have to go to social media and try to justify myself.
You have to keep in mind social media like Twitter, Telegram are literally filled with 12 year old “day traders” who don’t know better. If they’re attacking, FUD’ding, whatever, it’s just not worth the energy and time to argue back. Now, if there’s someone that’s genuinely confused/doesn’t fully understand a certain concept and would like clarification on a project, that’s a whole different story, but that’s rarely the case these days. There are many other projects there I have a strong distaste for and ridicule frequently but guess what? I don’t spend hours going on their subs and instigate verbal wars and attacking their projects. Instead, I’m going to use that time to educate myself and formulate my own opinion. If I’m wrong, at least I’ll have learned something new and make an even better evaluation in the future. That’s called life. Don’t get swayed by the short term noise and instead, keep an eye on the end goal and bigger picture.
If you read all of this so far, I really appreciate it! Again, this part was more of a broader commentary on the crypto market, but in the next piece, I’ll do a deeper dive on ICX specifically. Any feedback is welcome as well.
