I wanted to cover the topic of seasonality and cycles in Web3 and the typical user journey and share my experience of several cycles. Sketched observations on the chart.
Observations: Each cycle runs ± the same way. Not always exactly the same, but the basic pattern is this:
When Bitcoin starts to rearrange to react to negative news, then smart money starts to accumulate position -> Bitcoin starts to react to positive news. Like halving or rumors about preparing for the entrance of institutional -> against this background, a breakthrough direction appears like smart contracts, DeFi or NFT -> the number of mentions in the media is growing -> awareness and speed of attracting users who go through the funnel of application categories is growing:
• CEX (exchanges), Web2 services that act as bridges to Web3. Subscribe to telegram channels, twitter, discord.
• Then they get acquainted with Web3 infrastructure: Metamask, Trust Wallet, Blockchain explorers.
• They learn through the community or from influencers about applications in which they can spend the earned cryptocurrency, greedily and in a hurry, scattering everything and smearing their portfolio, not considering that it is difficult to get out of such a portfolio later and what kind of liquidity it is.
• Having understood the basic principles of the device of this system, they move on to independently study other ecosystems, blockchains and search for super-profits, meeting scammers along the way and sharing their knowledge with other users.
• As the outside noise reaches its climax and the rate of attraction slows, assets are redistributed between smart money and weak hands while positive news is still in play.
As a result of this life-and-death battle, weak hands lose their hard-earned hands, and those who have a little more experience or are more sensitive to trend changes, if they have time, take profits and wait for a new trend, and they will move into the category of crypto apologists in the future .
At the stage when FOMO reigns in the market, FUD is thrown into the media, which briefly affects the price and throws the most impressionable from the bullrun, while the price of bitcoin manages to withstand and continue to grow and so on several times.
As a rule, this is regulation news from China, the USA, Korea, the largest hacks.
The most negative news comes mainly from Bloomberg crypto or other dubious sources. This non-linear cycle of news and the resumption of growth of bitcoin forces to make mistakes, develop resistance and reinforce the idea that “bitcoin will rise forever”. Every time “authoritative Wang analysts” appear in the media, they raise the bar for the predicted price of bitcoin: $20k, $50k, $100k, $300km, $1M. It's like they're in competition.
Not reaching the cherished goal, after distribution to the public and exit, a black swan appears, pushing the market down. Many still have hope for recovery. Bitcoin is the future. "Analysts promised $1M". The ghosts of the past creep out. Mt. Gox, hacks, Regulatory News and so on, but bitcoin is already starting to react more strongly to them, and weaker to the positive.
When the flow of any news decreases, those who somehow remained working in web3 and the most successful traders and users remain in the market. During this period, the most interesting discussions and reflections begin, followed by innovations and changes in approaches. The overall skill level of the community is growing.
There is no time to experiment during the global media mania, and there is no need to. Everything grows on the bullrun, and if everything grows, then you can do the same. those who are in search of extra earnings will want to enter the project at an early stage. The spray and pray strategy works great.
The remaining price-locked participants each time set new bottom targets in the hope of a rebound, but do not take into account that bitcoin, just like it is growing powerfully and unpredictably, is also falling. It hurts and mercilessly, breaking the fate of people.
Those who survive are mainly inventing new approaches, experimenting with new models, and advising other participants in anticipation of a new cycle.
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