Source: Airdrop Reference

The market seems to have entered a "callback moment" again. Faced with the price fluctuations, I believe many friends are thinking about the same question:

Should we "get out of the car and avoid danger" or "enter the market on dips" now?

This question seems simple, but it is actually complicated. Especially in the cryptocurrency market, short-term fluctuations are violent and various information noises are intertwined, which can easily make people lose their direction. When we are in a "callback moment", we need to think calmly, pull our eyes away from the price fluctuations in front of us, and look at them in a larger "trend" and "cycle" framework.

Authentic, whether the Bitcoin "car" can continue to move forward is a common question for all "passengers". But as we are going to discuss today, there are key clues to answering this question "above trends, between cycles".

Today, I will use the framework of "Trends and Cycles" to take you to clear the fog and have a cold thinking about Bitcoin's "callback moment". First, let us start by understanding the basic concepts of "trend" and "cycle".

A picture is better than a thousand words. The following picture can quickly give us a sensory understanding of "trends" and "cycles". Note that the vertical axis of the figure below is a logarithmic coordinate, the height from 0 to 1 equals from 1 to 10, which is to see the early price changes.

Trend: Red arrow that keeps up. Represents the long-term upward trend of Bitcoin price. Will this trend continue? This is the question we will focus on answering today, and we will talk about it in detail later. Several important long-term indicators will give you confidence in the future of Bitcoin.

Cycle: Four color blocks of different colors. They represent different stages of a cycle. The division of the stages of the first three cycles is relatively clear, but the division of the fourth stage, starting from 2023, has not only not been completed, but it is also very controversial. This is also what you need to explain to you today. An important reverse indicator should easily allow you to make the decision to "get on the car".

Through the above chart display, I believe you should have a more intuitive perception of trends and cycles. Let’s take a closer look at what is a trend? What is a cycle?

1. What are the trends and cycles?

Understanding any market, one should first distinguish between the two key concepts of "trend" and "cycle", and the crypto market is naturally no exception.

Trend: Trend is the long-term direction of the development of things and a grand and lasting force. It represents the most essential and core direction of things, like a rushing river, which is difficult to reverse once it is formed.

Cycle: Cycle is the short-term fluctuation presented in the development of things, and is a rhythmic change that swings up and down around the trend line.

Simply put, the cycle is in the trend. However, simple inclusion is not enough to express the complex relationship between them. If "trend" is compared to the trunk of a tree, and "cycle" is like the rings of annual rings on the trunk.

Just like the trunk of a tree, it determines how tall it can eventually grow and where it grows. However, the growth of trees is not smooth. They will be affected by various factors such as season, climate, soil fertility, and these effects will leave the mark of "year rings" on the trunk.

Compare this to the Bitcoin market.

The long-term trend of Bitcoin is shaped by macro factors such as technological innovation, global adoption, institutional entry, and evolution. It determines the long-term upward or downward direction of Bitcoin price. Once this trend is formed, it is like a rushing river. Even if the road ahead is tortuous, it is difficult to change the grand direction of its final convergence into the sea.

Bitcoin's short-term cycle is affected by short-term factors such as market sentiment, macroeconomics, emergencies, capital flows, etc. It is like the rolling waves in the river. Although it is magnificent, it is ultimately a temporary phenomenon in the long river of trends. In the Bitcoin market, the alternation of bull markets and bear markets, and the rise and fall of short-term prices, all belong to the category of cycles.

But, many times, we cannot distinguish what is a trend and what is a cycle. Why is this?

2. Why is it not easy to distinguish "trend and cycle"?

The reason is simple, but it is deeply rooted in human nature and the complexity of the market.

The human brain is naturally more sensitive to "change", especially short-term and drastic changes. Just imagine, when you stand in the forest, the first thing that attracts your attention is the leaves swaying in the wind, the squirrels jumping on the branches, rather than the tall standing of the century-old tree. Similarly, in the "digital forest" of cryptocurrency, our brains are more likely to be attracted by daily price fluctuations, bewildered by short-term "waves", and ignore the long-term "river" behind them - long-term trends.

Especially the Bitcoin market, the fluctuations are so violent that it can be called a "storm" in the "digital ocean". Within one day, prices soared by 10% or even 20%, which is commonplace. Under such violent fluctuations, the investor's brain is like a small boat in the stormy waves, always being impacted by the huge waves in front of him. Where can I have time to take care of the vast ocean trend?

What's more, human nature is naturally averse to losses and seeks profit and avoids harm. Prices fall, accounts shrink, and the instinct of "loss disgust" will make us extremely anxious, and we just want to "stop loss" and leave as soon as possible.Where can I care about the "long-term trend"? As the price surges, the desire for "greed" will drive us to enter the market because of FOMO (Fear of Missing Out), for fear of missing the opportunity to "get rich", and not calmly think about it. Is this the power of the trend or just the pulse of the cycle?

What's even more strange is that the cyclical fluctuations in the Bitcoin market are usually extremely confusing. They often "change faces" and disguise themselves as "trend reversal", making it difficult to distinguish between true and false, and it is difficult to see the truth behind it.

More complex is that the Bitcoin market is filled with various "noise" information. These "noises" are like "fog", interfering with our judgment and making it difficult for us to capture the real "signal" - a guide to long-term trends.

What's worse is that a lot of "noise" information is usually artificially created, and is a "smoke bomb" deliberately released by the market "market makers" or "institutions". The purpose is to confuse the public and mislead retail investors, so as to achieve their ulterior motives. For example, when the market falls, they will spread various FUD (Fear, Uncertainty, Doubt) messages to create panic and induce retail investors to cut their losses at low prices; when the market rises, they will send various optimistic messages to create a pleasant atmosphere and attract retail investors to take over at high prices.

So, sometimes it is understandable that we cannot tell whether the current decline is a "cyclical pullback" or a "trend reversal".

So, what is the current situation of Bitcoin?

Periodic callback.

In fact, this answer hides an important premise-Bitcoin's continued upward trend has not changed. Is this really the case? This may be the biggest question mark in your mind. So, we should figure out this problem first. Because, only by first figuring out where a "ship" is heading, you need to decide whether you should get on the "ship".

3. Why has the upward trend of Bitcoin not changed?

The answer lies in the grand and lasting forces, the cornerstones that shape the long-term trend of Bitcoin. Even in the fog of a short-term market pullback, these cornerstones are still as solid as rocks, shining in the direction that guides the trend.

3.1 Global adoption rate: 96% "no man's land", heralding a broad space for growth

By 2025, only 4% of the world's population holds Bitcoin.

This data may seem disappointing at first glance, but from another perspective, it contains incredible growth potential!

Imagine a huge market with a population of 10 billion, only 4% of the current development, and 96% of the "no man's land" are waiting for us to explore and cultivate. It's hardIsn’t Tao an exciting “blue ocean” market?

River's research report also confirms this: Bitcoin has achieved only less than 4% of its maximum adoption potential. This means that the road to global popularization of Bitcoin is still only in the "infancy stage", the road ahead is still long, and there is extremely broad room for growth.

It is particularly worth noting that developers and regions will be the main force in the future growth of Bitcoin adoption rate. The report shows that North America is currently the region with the highest Bitcoin adoption rate, while Africa has an adoption rate of only 1.6%. This just shows that Bitcoin still has huge room for popularity in economically underdeveloped areas.

So what does this more than 3% mean global adoption? River's report gives an analogy, see the figure below.

Such a low adoption rate is equivalent to the Internet in 1990, online banking in 1996, and social media in 2005. That is to say, this is an era full of opportunities. Even if you haven't gotten on the boat, it's time to do it. Taobao is not the first to do e-commerce, Google is not the first to do searching, and Nafi is not the first to do online videos.

It's just the beginning. This 96% "no man's land" will be the most solid "demographic dividend" for Bitcoin's long-term upward trend!

3.2 Three troikas: Institutional entry + Clear supervision + Reserve

Bitcoin, which was once "sneered" by traditional financial institutions, has now become a "hot commodity" they are pursuing.

Standard Chartered Bank predicts that the price of Bitcoin will reach $500,000 during Trump's tenure, and clearly states that "growth of institutional adoption" is one of the key drivers. Geoffrey Kendrick, head of digital assets research at Standard Chartered Bank, believes that institutional participation will not only reduce the volatility of the crypto market, but also improve the market security. Also, Standard Chartered is the only institution that accurately predicts Bitcoin’s current bottom - 69,000 to 76,500.

Standard Chartered believes that another driver isThe establishment of a clearer regulatory framework in the United States.

Trump not only set up a "strategic Bitcoin reserve", but is also actively promoting stablecoin legislation. U.S. Rep. Bryan Steil publicly stated that the United States has huge legislative opportunities in blockchain technology, Web3 and cryptocurrencies. Steyer currently chairs the U.S. House of Representatives Subcommittee on Digital Assets, FinTech and Artificial Intelligence.

CoinShares' research report also pointed out that establishing strategic Bitcoin reserves in the United States will have a more profound long-term impact on Bitcoin adoption than the launch of ETFs. The current market has seriously underestimated the value of US strategic Bitcoin reserves and is more trapped by short-term liquidity.

In Europe, banks such as DekaBank have begun to support cryptocurrency trading, and Boerse Stuttgart Digital is also actively promoting institutional-level applications of cryptocurrencies. All this indicates that institutional funds are accelerating the influx of the Bitcoin market, and traditional financial giants are "running into the market".

As the supervision continues to be clearer, institutions and Bitcoin holdings will become increasingly large, becoming the dominant force driving the long-term rise in Bitcoin prices.

3.3 Macro improvement: PMI and M2 point to "active reversal"

Although in the short term, Trump's tariffs and the strengthening of the US dollar index have brought certain "headwinds" to the Bitcoin market. However, from a more macroeconomic and perspective, Bitcoin’s long-term upward trend is still strongly supported.

The US manufacturing PMI has entered an expansion mode for two consecutive months (greater than 50), which is seen as a signal of a "active reversal of the business cycle." Real Vision founder Raoul Pal noted that PMI is leading the economy about a month ago, and, moreover, it is leading the economy not just, it is leading all assets. He believes that with the upward trend of the business cycle, Bitcoin is expected to peak by the end of 2025 or even early 2026.

S&P Global Market Intelligence research supports Pal's point of view, see the figure below. You will find that when the PMI on the right is greater than 50, GDP will increase to varying degrees. The study believes that the PMI data predicts “every turning point in earnings over the past 14 years.”

Another indicator worthy of attention—the global M2 money supply—has also seen a “sharp rise” trend. Real Vision's research shows that the price of Bitcoin usually reflects changes in global M2 in about 10 weeks.

Analyst Colin Talks Crypto even used data analysis to accurately calculate the "46-day and 72-day time lag" that affects Bitcoin price global M2 changes. Lyn Alden also pointed out that “Bitcoin changes in the same direction as global liquidity 83% of the time during any given 12-month period, making it a powerful barometer of liquidity conditions.”

This means that the improvement of global macro liquidity will provide a strong "boost" to the rise in Bitcoin prices.

3.4 Summary: The three cornerstones of Bitcoin's long-term trend

Bitcoin's long-term upward trend has not changed, and its core support comes from three irreversible macro forces:

96% blue ocean market: Currently, global Bitcoin holders only account for 4%, and the adoption rate of developers is less than 2%. Its penetration rate is equivalent to the Internet in the 1990s, and its growth potential far exceeds that of the market's short-term fluctuations.

Institutional and Strategic Entry: Standard Chartered Bank predicts that Bitcoin may reach $500,000 during Trump's term, the United States is establishing "strategic Bitcoin reserves" and accelerating stablecoin legislation. European banks such as DekaBank have opened up cryptocurrency trading, forming a triple thrust of "institution + regulation + sovereign reserves".

Macro cycle resonance: The continuous expansion of the US PMI indicates a reversal of the business cycle, the global M2 growth rate is related to the 46-72-day lag relationship with the Bitcoin price, and liquidity easing forms a long-term synergy with the Bitcoin "digital gold" attribute.

So, the short-term 77,000 pullback is just a cycle wave, and the trend rivers are still rushing forward. So, is the price of 77,000 yuan the end? Is this a good time to enter?

In fact, if you agree with my above argument for trends, the answer is self-evident. Although you may not be able to buy at the lowest point, you will not buy at the highest point either. The only thing you need to control is your desires, don’t add too much leverage.

Conclusion: Be friends with time and dance with trends

History will not be repeated, but it always rhymes. When gold flows from the American continent to Europe, it creates the wealth myth of the Age of Discovery; when the Internet goes from laboratories to thousands of households, it reshapes the way human civilization connects—Today, we are at the forefront of the digital asset revolution and witnessing the epic leap of Bitcoin from code to a global value carrier.

When 96% of the global population has not yet held Bitcoin, when sovereign funds begin to include crypto assets on the balance sheet, and when blockchain technology becomes a new battlefield for the game between great powers—this galloping “digital ark” has just left the dock to build it.

The secret to dancing with trends is not to predict the shape of the waves, but to understand the rhythm of the tide. Investors who stick to Amazon when the Internet bubble burst and visionaries who have a heavy position in Apple during the budding period of the mobile Internet are well aware of one truth: the trend is never a smooth straight line, but an upward spiral composed of countless cycles of oscillations. Just like this, the 77,000 US dollar fluctuation is just a brief chord in the crypto civilization symphony, and the main melody always rises towards the trust high built by hash computing power.

Real dancers never need the spotlight to shine the entire road. When 96% of the audience are still watching, and when the sovereign fund begins to adjust the rhythm of the dance, smart people have already marked their own notes on the blockchain music score - maybe they will step on the wrong beats, or they may stagger for a short time, but as long as their feet are always standing on the crustal movement belt of the technological revolution, they will eventually witness the re-stitching of the financial continental shelf.

The trend is the sea, the cycle is the boat, the fool calculates the height of the waves, and the wise calibrates the angle of the sail. Trends determine the overall direction of the market, and cyclical fluctuations are short-term phenomena that fluctuate along the trend. When the dusk of the fiat currency system meets the dawn of the crypto economy, instead of chasing shadows in the K-line maze, it is better to jump into the torrent of digital civilization and climb to the ark supported by the wave of the times.

Every callback at this moment is a ticket reserved by history for the sober.