Today is Monday, after a few days of holiday, which has relaxed me. With more energy to watch the market in this new week, let me start with a summary and my views on the future of the market:
Looking at Bitcoin, I previously mentioned the ultimate target of $96,166, a key point calculated in February. Now the direction seems correct; after the last surge by the Americans on May 2nd, bulls began to retreat, and bears started to take control. In recent days, the market has been crashing continuously, and the 4-hour K-line chart has clearly shown a downward trend; visual analysis is the most straightforward. Where it will pull back to, and how it will move after that pullback, we'll discuss later because it will be clearer after it comes down.
I know many people are eagerly waiting for the Ethereum Prague upgrade on May 7th, but Ethereum has always been a 'good news turns bad' veteran. Recently, this strong wave has already overdrawn the upgrade benefits; it is more apparent from the K-line that after the surge on April 23rd, the price has been swinging near the moving averages like a headless fly, with both sides fighting fiercely. If the support line breaks, it could head straight for $1580 or even lower without discussion.
This wave of Bitcoin's daily-level decline cannot possibly reverse in a direct V-shape; the rebound on May 2nd has already cooled off, indicating that the upward trend has completely rested. Next, we will focus on the key price levels: if it stabilizes, we will enter to bottom fish; if it doesn't stabilize, we will continue to watch, waiting for the market to find new support levels before taking action.
Written before BTC breaks $150,000!
I don't want to talk again about how much BTC will rise in the future; I am just inferring what is likely to happen from the existing information. Trading is essentially about studying probabilities (one is the win rate, the other is the odds).
From the global M2 liquidity over the past four months, we have already entered QE; whether the Federal Reserve is still pretending QT, other countries' printing presses have been running at full speed. The Chinese yuan unexpectedly appreciated these days, indicating that the dollar index still has to fall. M2 first enters gold, then the stock market and BTC, and finally risk assets (ETH and altcoins, etc.).
We are now in a process where one phase has just ended, and the second phase has just begun. Based on the speculation that BTC is three times more volatile than gold, this round of BTC's rise may exceed everyone's expectations. If BTC's rise exceeds 100% by June and breaks $150,000, I wouldn't be surprised.
Market logic is quietly changing; are we on the eve of a huge market shift?
Recently, market trends have become increasingly bizarre. US stocks have surged; logically, the dollar should also be strong, but it hasn't moved, and US bonds continue to fall. This 'counterintuitive' phenomenon clearly indicates a logical misalignment. Normally, when market confidence recovers, the dollar should strengthen, but now it is moving in the opposite direction. Asian currencies have collectively surged in recent days, which is not a coincidence; it indicates that funds are accelerating their exit from the US and shifting to other markets. This is not wait-and-see; it is a retreat.
I previously mentioned 'Dollar Tide 2.0'—large funds have completed their layouts during the interest rate hike cycle. Many people did not keep up with this round of Bitcoin's rise; the reason is that their thinking is too habitual: thinking that rate hikes should lead to declines, and rate cuts should lead to rises. The market evolves in rounds, but the paths often differ; replicating past experiences often leads to losses.
Now, the correlation between the dollar, US stocks, and US bonds has completely broken. The dollar no longer moves in sync with US stocks; instead, it is retail investors propping them up while institutions are reducing their positions. Goldman Sachs' research report clearly points out that this wave of stock market rise is driven by retail investors 'buying more as it rises', while institutions are slowly exiting.
Many people say that capital has gone to buy gold for hedging, but gold is also showing clear signs of peaking, and the shorts have nearly been washed out. Traditional safe-haven assets like the yen and euro are also weak, and funds are starting to speculate on some non-mainstream currencies, such as the Hong Kong dollar and Thai baht, which is similar to how altcoins are speculated in the crypto space—indicating that mainstream assets are no longer safe.
What is the essence? The market is looking for an escape route outside the dollar system, even if it is riskier, they want to get out. Buffett's statement about not selling Japanese trading companies for the next 30 years is essentially a judgment on long-term hedging demand.
What does this have to do with cryptocurrencies? If the dollar's credibility continues to collapse, the next wave of capital looking for an exit will likely be in crypto assets. Currently, altcoins and commodities that are still at low levels are potential points of explosion.
Let's talk about several tracks that are promising for the long term in this bull market!
I am optimistic about the LSD track's LDO; after the ETH staking ETF passes, this sector will definitely develop in the long term.
I am also optimistic about the development of AI; WLD, VIRTUAL, TRUBO, and RENDER can be considered for holding, but they are not suitable for all-in bets.
MEME is the main line of speculation in this bull market. The old leader DOGE and the new leader PEPE go without saying; I am optimistic about HIPPO and MOODENG.
Additionally, new public chains often have parts of the market in every bull market; for example, S SUI BERA can also be considered.
DeFi will definitely continue to develop, such as AAVE, CRV, and PENDLE.
The blockchain gaming sector is bound to throw out a big dark horse. NFTs cannot only have one bored ape; I am optimistic about BIGTIME. If these tracks are to develop, it will also promote the development of layer two solutions, and blockchain gaming will definitely promote the development of public chains. The upcoming SUI is focused on developing for blockchain gaming. It is born to serve blockchain gaming. I believe SUI has great potential.
These are relatively certain directions; I believe these coins can earn several times without much problem!
Recently, ETH-related altcoins are likely to be speculated in the short term; focus on making some swings!
ETH is upgraded on May 7th; ETH-related altcoins are likely to be speculated in the short term. Today, ETH is still rising. I have screened several ETH-related coins with good rebound potential; their gains in the past few days will definitely outperform most coins. Focus on making some swings, not on long positions. ETHFI OP SSV IMX, LDO VELODROME AAVE PENDLE.
The above-mentioned coins rebound very quickly. When bottom-fishing, prioritize these strong coins that rebound quickly, take profits from this upgrade wave, and then switch to sectors you are optimistic about. For stability, buy ETH; for greater returns, buy lower market cap projects, depending on personal trading preferences.
