Since I publicly called for ETH and started dollar-cost averaging in March, today the E guardians finally have a voice. This wave of three consecutive daily green candles has not given the market any breathing room. There is currently a lot of divergence, with many believing it is about time for a rebound rather than a reversal; others are calling that a big bull market has arrived. So what exactly is happening?
First, let's look at the macro data.
1. Brokerages lead the way
Major exchange platform tokens have generally broken through the 200-day line because more newcomers will enter during a bull market! Newcomers registering on exchanges is positive for platform tokens, so before the bull market arrives, brokerages lead the way by pushing up coin prices! Generally, there will be a rise in platform tokens before a bull market.
2. Institutional and on-chain whale accumulation.
On-chain data shows that addresses holding over 10,000 ETH 'whales' have quietly conducted large-scale strategic accumulation before this round of price surge; ETFs have also shown continuous net inflows! Moreover, on May 10, a whale bought 138,511 ETH, worth 297 million USD!
3. National strategic reserves of Bitcoin and Ethereum
Trump has stated that BTC, ETH, and other valuable cryptocurrencies will become the core of reserves, and he has explicitly expressed optimism about Bitcoin and Ethereum. Although there was a subsequent crash, the narrative remains, which is a positive for the long term!
4. The number of Bitcoins on exchanges continues to decrease
In the past 7 days, major exchanges have seen outflows, indicating a large amount of coins being bought up!
My opinion: News is greater than all data and K-lines.
1. The essence of the previous crash and this round of increase!
Although there are no bearish reasons in the data and K-lines, this round of decline was caused by tariff issues leading the US stock market to drag down Bitcoin. The new trade agreement between the UK and the US, as well as the China-US trade talks, are positive in terms of news, with the US stock market warming up, leading to rebounds in Bitcoin and Ethereum!
2. 'Short squeeze' upward spiral
Currently, since May 8, short positions have been liquidated at 830 million, far exceeding long positions, nearly 8 times that of long positions. The sharp price increase has forced short sellers to buy ETH to cover their positions, further pushing up the coin price and forming a typical 'short squeeze' upward spiral.
3. How should retail investors respond?
If you are like me, a guardian of E, holding your position is the best choice. If you have no position, it is indeed not a very good time to enter now!
This round of China-US trade talks is more likely to be an exchange of 'mutual bottom probing.' If progress goes smoothly, there is hope to set an agenda for the next stage. I think the first wave of negotiations will likely collapse, and at that time, it is highly probable that there will be a decline. When everyone experiences FOMO, it is possible that negative news will be released, leading to a drop and potentially causing a short squeeze!
If you want to buy, waiting for that time to come in would be more appropriate!
