Bitcoin Cheat Sheet

Psychology of Market Cycle

To succeed in a market, you need to understand the psychology of the market. Hodling, as well as trading the different phases of the Bitcoin market cycle, is not easy, which is why I bring you the HODL’ers Cheat Sheet, now LIVE available!

👆 Chart now live available!

This is a sucker’s rally! That’s what it might feel like in the stagnation phase of the market cycle.

The HODL’ers Cheat Sheet breaks down the psychology of the Bitcoin market cycle. It shows what goes through the minds of the market participants during the different stages of the cycle, helping you deal with emotions during these different phases.

It combines three powerful concepts. Since the Bitcoin market cycle happens over a 4-year period, the HODL’ers Cheat Sheet combines the 4-year Spiral Chart color-coded with On-Chain data from Short-Term Holders that are most susceptible to emotions and maps the psychology of the Wall Street Cheat Sheet. Let’s quickly discuss these three concepts separately so you fully grasp the power of the HODL’ers Cheat Sheet.

Spiral Chart

If you don’t fully understand the 4-Year spiral chart or need a refresh, I recommend you watch the first minutes of my keynote at Bitcoin Miami, where I go through this in great detail:

Short-Term Holder Cost Basis Z-Score

Short-Term Holders are most susceptible to emotions and price action. Utilizing on-chain data, we can differentiate between bull and bear markets by looking at their cost basis (average purchase price).

The STH cost basis Z-Score is the distance of price above or below their cost basis measured in standard deviations (second part of the graph). The further above, the stronger the bull market; the further below, the stronger the bear market.

Wall St. Cheat Sheet

Adoption in any market never happens in a straight line; it happens in cycles full of speculation and emotions. The difference between being profitable and non-profitable, to a great extent, comes down to controlling these emotions. Natural, rightly appearing emotions at the wrong time often lead to wrong calls in the market. Wall Street came up with a cheat sheet identifying these emotions, the Wall St. Cheat Sheet.

The HODL’ers Cheat Sheet combines the above concepts into a powerful chart to fully grasp the Bitcoin Market Cycle. I hope you find this useful for hodling and trading the market cycle. Feel free to give feedback or questions in the comments below 👊!

-Root