A Brutal Reset Before the Bull Market: Clearing the Way for Exponential Gains

Before the explosive bull market of 2021, every leveraged long position was aggressively cleared out, a process intensified by the catastrophic “3/12” event. On that fateful day, all long positions were wiped out, and even savvy short-sellers, enticed by the sharp drop, tried to catch the bottom but got liquidated in the process. As the dust settled, the few remaining short-only traders eventually met their fate too, overwhelmed by the relentless price surge that followed.

The 2017 Bull Market: A Complete Reset of Local Traders

The 2017 bull run unfolded under even more dramatic circumstances. At that time, the crypto market was largely dominated by domestic traders. When the “9/4” regulatory clampdown hit, it sent shockwaves through the community. Not only did all local exchanges move offshore, but most retail investors sold their holdings, liquidating positions en masse. As they exited the market entirely, they faced a scarcity of buying options, effectively sidelining themselves.

With the exit of these players, the market cleared of short-term speculators. A mere two months later, Bitcoin and various altcoins embarked on a meteoric rise, with Bitcoin reaching nearly $19,000, igniting a historic surge that left most early sellers watching from the sidelines.

The Cycle: Intense Shakeouts Lead to Stronger Rebounds

The takeaway? The more intense the market shakeout, the stronger the subsequent rally. Veteran traders in the futures markets have countless tales of these cycles, but only a handful can tell them without scars. The advice is clear—steer clear of leveraged trades, hold strong spot positions, and let the market play its course.

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