Here are my predictions of what will happen during this bear market. This will include price targets, who’s going to go bankrupt, and more. There’s going to be some hot takes too so if any of them trigger you then just stop reading.
Starting off with price predictions, I’m going to do them just for bitcoin and instead of giving one price target I’ll give three each with their own probability. I give around 30% chance that this 20k level was the bottom for this bear market. This is around the same level as the previous cycles all-time high and people like to point out that bitcoin’s price has never gone below a previous cycle’s high before. But honestly, I think that this time it’s different so I’m giving a 60% chance that it drops down to 12 to 14k instead. I think that as long as we’re in a recession no risk asset is going to be safe, and bitcoin can definitely revisit these lower levels. So that adds up to 90% and the last 10% chance is a shocking scenario where we go all the way down to 4k and liquidate micro strategy along the way.
That would be absolutely crazy, but I do give it a 1 in 10 chance, given how bad the macroeconomic outlook is currently. Do keep in mind that many of us were way off on our bull market predictions. Like so many people, me included were expecting to hit 100k so that means that we could be way off on our bear market predictions too. so just be sure to take these with a grain of salt.
My next prediction is that this bear market will last until mid-2023. I think that the earliest it could end is late this year, but at the end of the day it all depends on macro. Crypto is not going to reverse until stocks bottom and that depends on when the fed is able to reel in inflation and change their policy of rate hikes and quantitative tightening. As long as the fed stays hawkish it’s going to be a painful time for all risk on assets.
Something else I’m predicting is that bitcoin dominance will get back to 70% of the entire crypto market cap. During this past bull market, bitcoin dominance was chilling at around 40% dominant, which is quite low historically speaking. But during a bear market bitcoin falls the least compared to all the other coins out there. So, it’s normal for its dominance to rise.
The consequence of this is that smaller all coins are going to get absolutely wrecked. I mean just look at the price charts for the last bear market in 2018 and 2019. It’s not an exaggeration when people say that most alts dropped like 99% from their all-time highs. If the same thing plays out this time, then a good strategy may be to sell your altcoins, and then dollar cost average back into them, but very slowly, and perhaps at a later stage in this bear market instead of right now. I mean the risk and reward are just not there for small alt coins right now.
Speaking of alts, I’m predicting that many big altcoins will never recover to their previous all-time highs. This shouldn’t be a controversial statement. Just look at the darlings of the last cycle. Most of them never recaptured their previous all-time high in USD value and definitely not in terms of BTC value. Some examples include Neo Eos and Tron from last cycle.
Now, which coins could follow that same fate from this cycle? Well, I’m thinking meme coins like SHIB or DOGE, some DeFi projects that were way too hyped up, maybe some VC projects with bad tokenomics, or even some layer one projects with teams that will just give up and decide to retire instead.
But even then, I am predicting for there to be a handful of 100x to even 1000x opportunities from the bottom of this bear market to the top of the next bull market. This was actually the case for the previous bear market. Look at AAVE’s charts back when it was called ETHLEND in the last bear market you could get one of those for one cent and at the top of the bull market it was at over 600.
Now of course they did a 100 to 1 reverse split during the migration but that is still 600x gains from bottom to top. And this time around there’s so much more innovation going on like some projects that I have my eyes on, haven’t even launched yet. If they launch in a bear market at a super low valuation, it’s going to be an amazing entry point.
If you have some cash and conviction, just think about it. If these projects launched in the bull market they would have started with a valuation in the tens of billions of dollars – so getting in when it’s at tens of millions or maybe even hundreds of millions could be an extremely fair entry point.
My next prediction is about the fate of NFTs during this bear market. Obviously, crypto will get hit hard during this bear market but I’m predicting that NFTs will get hit even harder. Many collections are headed to zero which means that some of y’all who had six or seven figure portfolios were only paper wealthy the whole time. I expect liquidity to dry up big time which means you couldn’t sell your jpegs even if you listed them at a low price. Many projects are also going to abandon their roadmap and just leave their community out to dry.
But on a more positive note, I do expect for there to be some great opportunities to scoop up some blue chip NFTs like BAYC or Crypto Punks at the depths of this bear market. Those looked unattainable for us normal folks back during the bull market but if you manage your capital properly then you may be able to finally scoop one up when the price is low now.
Something crazy that I’m predicting is that some big figureheads will get sued or arrested for the unsavory things they did during the bull market. I’m talking about charges like fraud, illegal securities offerings, and things like that. Keep in mind that regulators and government agencies are slow to act in general. Like they build their cases for months if not years before releasing it to the public. So, all those influencers who promoted pump and dump projects without disclosing properly and all those people who launched their own tokens without any care for the law. I’m betting that they get whacked by the SEC, or DOJ, or any number of other alphabet agencies.
I for one will be happy when this happens because those of us who played by the rules and saw those charlatans get rich will finally get some justice.
So far, we’ve seen several black swan events happen like the Luna collapse or more recently the Celsius network issues. But I’m predicting that we’ll see other big dominoes topple before the end of this bear market. Like there’s already rumors that the famous 3AC got margin called and lost billions of dollars. That’s really shocking news because those guys were some of the best traders that we’ve ever seen in the crypto world.
Also, if prices dropped low enough, we could see Michael J. Saylor and his micro strategy company get liquidated on the loans they took out to buy bitcoin. That would be potentially devastating as it takes bitcoin back into the low thousands of dollars, then that could even lead El Salvador to go bankrupt because their cowboy president bought a lot of bitcoins with their country’s funds. I don’t think he used any leverage on that but if their bitcoin balance is worth pennies on the dollar then they might not have a lot of reserves left to pay off their debts or whatever. I think that if any of these events happen, it could mark the final capitulation that brings us to the true bottom of this bear market.
What comes after true bottom is usually an accumulation phase that leads us into the next bull phase. And I’m predicting that there’s two things in particular that could lead us into the next bull market. The first one is Ethereum’s long-awaited merge. This is huge because this includes a massive reduction in issuance which means way less ETH will be minted for each block reward. That plus their fee burn mechanism could make ETH net deflationary, which would be amazing for its price in the long haul. The second catalyst is bitcoin’s upcoming having in April of 2024. Yet again bitcoin’s block rewards will be cut in half causing a supply shock which should impact the price of bitcoin.
I don’t expect these catalysts to immediately impact the price the day they happen, but they will slowly change the supply side dynamics. And over a long enough period of time, we should start to feel the effects of it. And since ETH’s merge comes first, we could even see the flipping happen in a bear market until we get closer to bitcoin’s having. Now that’s a hot take for you.
My next prediction is that this time things really are different than before. People love to make fun of those who argue that this time it’s different; and depending on the context, they may be right. But this time our macro-economic situation is completely different compared to any time since bitcoin’s inception, so I think we need to throw all the models we have out the window because they are useless now.
We can’t look at bitcoin’s price history and match it with on-chain data anymore. This time We didn’t have a blow off top for price, and none of those on-chain metrics hit their extended zones that would have told us to sell or take profits.
The point is if you are a trader investor. Don’t rely on historical signals too much because that could wreck you during this unprecedented bear market.
