The volatility of September 2017 revealed the secrets of the cryptocurrency cycle

The cryptocurrency market experienced critical moments throughout its short cycles of existence. Years ago, during the sharpest declines, the market showed a surprising capacity for recovery that constantly defied skeptics. The true lesson of September lies not only in the numbers but in understanding patterns that cyclically repeat in this volatile market.

The September collapse and the market growth pattern

During periods of greatest uncertainty, such as the one that shook the market in September 2017, the behavior of bitcoin, ethereum, and altcoins revealed fascinating dynamics. What seemed like the end for many turned out to be just an inflection point. After the most severe drops, the market experienced spectacular recoveries: bitcoin revalued multiple times in short periods, while altcoins fell dramatically, creating conditions for the next wave of growth.

In just four subsequent months, the total market capitalization of cryptocurrencies multiplied significantly, going from 150 billion to 800 billion dollars. This exponential growth constantly challenges predictions from those who claim the market has reached its peak.

Cryptocurrency market capitalization compared to other assets

To contextualize the true potential of the cryptocurrency market, it is essential to compare it with other established markets. Currently, the cryptocurrency market has a capitalization that pales in comparison to mature markets: gold maintains a capitalization of 22 trillion dollars, while the US stock market reaches 37 trillion. These figures suggest that there is still significant room for growth in cryptocurrencies, especially considering that in years without an upward trend, the market has remained stagnant.

The gap between these markets is not just a number: it represents the structural opportunity that each new cycle tries to exploit. Those who understand this dynamic tend to hold their positions during the most challenging periods.

Market psychology: real cycles in a speculative universe

A consistent pattern in the history of the cryptocurrency market is how sentiment reverses direction with each new cycle. Severe criticism of bitcoin in its early days has turned into praise once it regained its bullish trend. The same happened with ethereum: when it was discredited by most participants, it later became an asset impossible for new entrants to reach, who hoped to buy at lower prices.

This sentiment reversal is not accidental. Participants who enter late in the cycle, those lacking experience and conviction (resistance investors), inevitably get trapped. Each sharp correction, even 99% drops completed in minutes followed by rapid recoveries, serves a specific function: to separate casual speculators from committed investors.

Market structure: why leverage is a trap

Before each major altcoin bull cycle, the market activates mechanisms of extreme volatility that exploit leveraged long positions. Once the bullish trend consolidates, short positions face massive liquidation pressure. Bitcoin and ethereum follow the same pattern, though with different nuances.

Price movements are not random: each break in the market structure aims to reallocate capital, allowing new layers of investors to enter or exit the game. Those who understand this dynamic maintain their structural advantage over the market.

The cycle as a fundamental law of the cryptocurrency market

Beyond numbers and volatility, there is a fundamental truth: cycles and human nature are the only truly predictable elements in this market. Every prediction of market capitalization, every argument about why it cannot grow further, quickly falls apart once momentum changes direction.

The advice to avoid leverage and short-term trading is not conservative but an observation of how the market structure works. Time and patience are the only tools that allow investors not only to survive sharp changes in September and other stressful moments but to thrive in them. The question is not if the market will reach new highs again but when, and who will be properly positioned when it happens.