Autumn Reflections

Is this peak Capitulation?

My X feed over the last weeks has been filled with bearish posts and sentiment. R.I.P. Crypto?! I mean sure, a flash crash of like 85%+ is crazy, especially when it happens at the end of a cycle. Essentially Q4 of Q4. But here we are and many have lost a lot or everything. Personally, I am glad that I didn't make use of leverage since I definitely would have been long. So while I didn't lose money in the crash (at least until I sell at a loss), my portfolio is like essentially break even after 7 years of being in crypto. What does that mean? Have I made bad invetment choices? Did I hop onto the narratives of each year too late? Or did I actually have good risk management since I am not down? Whatever it is, I never thought that this would be the state of my portfolio at the end of this cycle.

Of course all of this doesn't feel like an euphoria peak that comes with a blow off top. Have people ever been this bearish at a top? I doubt it and posts like this seem to confirm that we are at peak capitulation:

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I guess many people tried to outsmart the market. While this does tend to work in shorter time frames, like 99% of the time one breaks even again or comes out at a loss when looked over a longer time period. So if you made some lucky trades, maybe it's time to stop. Yeah, that's the hard part...

If we take the infamous psychology trading chart, it does rather seem that we are at the bottom, rather than at "Thrill" or "Euphoria", no? I don't see how the market could possibly peak in the coming months, even if we get a good run until then.

If so, the market could actually continue moving up in 2026. While that sounded heretical until now, I definitely think that we might be stuck in this "4 year cycle narrative". It has to break at some time, right? And when not now when everybody has jumped on this band wagon? Markets always stay unpredictable; if everyone could simply cash out every 4 years and buy back lower it couldn't work more than a couple of cycles (which is where we are at): The first cycle is new, the second begs the question if it will repeat and by the third time it's already unlikely to just follow in the path of the first two. As soon as there is a pattern that is too consistent, it opens up doors to profit from counter trades.

If the cycle does continue in 2026, this would be the unexpected part. And I feel something like this is even necessary for a true bull run with a blow off top to occur.

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Conclusions

Like always, we will know one way or another in the coming months. Personally, I have powered up Hive again and I tend to keep my bag until we are back over $1. But it also feels smart to diversify in more projects - like actually solid ones. There is a good chance that many projects/chains will actually die in the coming years. And it's something that has to happen when there are millions of coins...