2022 ended in a brutal, “crypto winter.” But then, the sector came back to life in early 2023. Here’s our (unusual) take on why.
by Nico Isaac
Updated: April 28, 2023
I recently listened to a podcast about the power of deep listening — only to realize that, well, I probably retained a fraction of the content because according to said podcast, humans have an 8-second attention span (less than a goldfish), absorb about 20% of information they’re told out loud, and generally misconstrue what another person says based on their own personal preconceptions, fears and desires.
This cartoon from the podcast summarizes this listening bias best:
A woman and her husband are watching TV when she turns to him and says, “You never listen to me. You only hear what you want to hear.”
To which her husband replies: “Thank you, yes, I do want a beer.”
If this sounds familiar, shame on yourself!
No, but seriously, ladies and germs. It made me think about the all-too-common listening bias of mainstream financial analysts. It occurs especially often in highly charged markets, when speculation is rampant and the ability to think let alone hear clearly about where prices are headed is compromised. Generally, the current tenor of price action is predicted to be the future tenor regardless of signs to the contrary.
One sector that is regularly on the receiving end of this type of tunnel hearing is cryptocurrencies. When the sector is hot and prices are soaring to the moon — which happened a dozen times since Bitcoin first popped on the scene back in 2009 — mainstream experts seem to hear the ch-ch-ching sound of perpetual gains.
And then when the sector deadfalls — which has also happened more times than I care to count — the sound of never-ending losses drowns out everything else. It happened in 2017-9, 2021 and most pertinent to this story, in 2022.
In case you had earplugs in five months ago, here’s what happened. Last year, the crypto market endured a painful drubbing when altcoins like FTX and Terra and their constituent mining platforms came crashing down. The established top-tier tokens like Bitcoin, Ethereum and Litecoin, already down hard from their late 2021 highs, inched even closer to eating soil.
By the end of last year, Bitcoin, Ethereum and Litecoin were down 70% plus to yearly lows as more than $2 trillion was wiped off the value of the entire cryptocurrency market. And, according to the mainstream powers-that-see, the sounds coming from cryptos were the tight crackling of a formerly liquid sector icing over. For the foreseeable future. Here, these news items from the time replay the bearish tune:
- “‘Cryptopocalypse’–Coinbase CEO Issues Serious ‘Contagion’ Warning After Bitcoin And Ethereum Price Crash — Dec. 24 Forbes
- “2022 was the year crypto came crashing down to Earth. ‘I think people are starting to think of crypto as this big scam that they would not want anything to do with.’ — Dec. 29 NPR
- “Never underestimate how quickly things can deteriorate in a sector as volatile as crypto, especially in a bear market. Prices can always go lower in the depts of crypto winter and casualties can multiply overnight.” — Dec. 29 Forbes
- “Can crypto markets really get any worse? Industry experts say yes — and break down 3 worst-case scenarios for 2023.” — Jan. 8 Markets Insider
The listening bias of mainstream analysis was apocalyptic because the crypto sector was singing the blues after a bear-tch of a year. But that’s more of an echo than a forecast, wouldn’t you agree?
There’s one way to honestly listen to a market’s trend without bias. And that’s through the filtered, objective sound of technical analysis. Elliott wave analysis takes it to another level, by focusing first and foremost on 5 core Elliott wave patterns, and whether they can be confidently identified within a market’s price chart.
Patterns don’t have opinions; they don’t have a dog in the fight and are not swayed by emotion. They just are. And if you can see them unfold, you can anticipate where prices may be headed.
And, at the end of 2022, our analysts heard a very different sound coming from the crypto sector; namely, the drip, drip, and drip of a thawing winter. Here, on December 30, our Crypto Trader’s Classroom walked subscribers through what elements qualify a market for “watchlist” status. The Dec. 30 Crypto Trader’s Classroom instructor Michael Madden first explained what wouldn’t:
“If deep down you are looking at price action and are anxious because you want to be part of a trade or you have the fear of missing out, which is one of the number-one hindrances that make people fail as traders.”
By contrast, Elliott wavers have the tools to develop the patience…
Read More: Cryptos: From “Cryptopocalypse” to “Stunning Comeback.” AGAIN?! :: Elliott Wave