Author: Blockchain Blue Ocean
Now everyone is most concerned about two points: Has it fallen to the bottom? If you want to buy the bottom, what should you buy?
The current market problem is the market pessimism caused by fundamentals (declining expectations of interest rate cuts + rising expectations of recession). The main force of the cottage and retail investors are all trampling, causing most cottages to fall sharply.
As for judging the top and bottom of the market, they are all predictions of the market. No one is a prophet, and everyone makes judgments based on their own analysis of the market. The right or wrong of the analysis is not important. What is important is whether you dare to bet based on your own judgment, and whether you dare to admit defeat if you are wrong. If you don’t dare to bet when you guess right, is it useful to give you a certificate at the end?
1. This week, the big cake fell to around 58,500 and then closed the needle and started to rebound. From conventional experience, after a long period of downward trend, it is often impossible to reverse like a flash crash in the bull market, but it takes two or even three times to build a bottom effectively before it can be confirmed. The current rebound strength is not good. Whether it is the bottom on the left needs to be observed, and the probability is not high.
2. Governments and institutions are constantly selling. Recently, the German government transferred about 5,000 BTC, and the US government transferred about 4,000 BTC, which are most likely sold. Mt.Gox has started to pay compensation, and about 140,000 BTC will be sold. These countries and institutions may not directly dump all the cryptocurrencies they hold in the market, but sell them in batches through OTC. But in any case, it will cause a certain degree of selling pressure on the market. When the market is good, the market will fall because of these behaviors. Now when the market sentiment is low, it is more like a sword hanging over the market.
3. Politics and monetary policy. The US election is approaching, and the market will be betting on the election. Different campaign propositions will be favorable/unfavorable to different fields or even the entire market (the Republican Party is more friendly to crypto) depending on the election situation. The game in the middle will be very fierce. The SEC fired at multiple projects and crypto companies, and the Federal Reserve continued to bite its teeth and not cut interest rates. Some members even said that there would be no interest rate cuts this year, which all suppressed the market.
There is no need to analyze the macroeconomics here. The interest rate cut is still the main line, and the others are all branches. The spring is almost pressed to the bottom. Either the interest rate is cut step by step, or it is cut quickly after the economic recession.
4. The market is deserted. Although various concepts are frequently emerging in the currency circle, they are all shouting by the interest-related groups, and the actual market has no money-making effect at all. Both institutions and retail investors are complaining. Institutions are profitable on paper but locked, and retail investors are trapped when they take over. Almost all new projects launched on BN and OK have gone down, and Ethereum GAS has dropped to a new low, which is enough to prove the deserted market.
There is almost no good news in the market at present, and the mood is close to freezing point. Subjectively, I think the market has not yet bottomed out and is in garbage time.
But because the callback is already large (BTC 15%+, mainstream 20-30%, altcoin 30-60%), when the spring is pressed to the limit, the sentiment and market liquidity reach the freezing point, and once good news occurs or panic selling occurs, the reversal may be quite strong. What we should consider here is how to buy reasonably, not how to sell or short.
Attached is a picture, the market here is a bit like March-October last year. Last year was the halftime break after BTC bottomed out from the decline in 2022 and walked out of the bottom range, and now it is the halftime break after the first half of the bull market. I expect it to fluctuate between 5W5-6W7 for 1-2 months, until the expectation of US interest rate cuts or recession intensifies before choosing the general direction.
The difficulty of the current market game and the duration of the shock may exceed the imagination of ordinary people. If you don’t have the ability to trade, it is best to take a break and not toss around during this period, and don’t frequently wear out your principal.
If you want to buy, what to buy?
1. The first choice is still BTC. The market still has faith in BTC. Large investors and institutions are constantly increasing their positions. ETFs are also continuing to flow in overall. At present, market participants are increasingly inclined to buy top assets, so although BTC has limited gains, it is still the first choice for configuration.
2. MEME coins. MEME's performance in this bull market is indeed good. Retail investors do not like to take over VC coins but like to buy MEME. In addition, institutions are no longer biased towards MEME, which has boosted the popularity of MEME. Every time the market rebounds, the increase in MEME coins is also ahead of the market.
3. Deterministic narrative. Buy tracks and projects with deterministic narratives. Although such projects may have had a large increase in the previous market, they are relatively reliable with trends to protect them. For example, AI track, RWA track, ETH, SOL, BNB.
Try to stay away from projects with high valuations and low circulation. Such projects are too highly valued and have limited space in the secondary market, but institutions and project parties are looking forward to unlocking shipments, and the selling pressure is very high. It is not to say that such projects will not rise. Short-term speculation and quick entry and exit are OK. If you have faith in the project, you are likely to be trapped. For example, a well-known L2 project was FUDed by the entire network due to airdrops and mouse warehouses. After it went online, the daily trading volume on the chain plummeted. If you want to participate in such projects, you have to consider whether you have the ability.
Do not participate in pledge lock-up. There are some differences between the current staking and the DeFi in the last bull market. In the previous DeFi market, you can withdraw it at any time to stop the loss if the market is not right. Now the staking of the points system project is either delayed in opening redemption or it takes dozens of days to unlock after being locked. In the current market environment with uncertain trends, try to make your positions more flexible, don't have too much faith in the project, and don't fall in love with the project.
Try to split the warehouse to buy at the bottom and stay away from contract leverage.
XingChi
