The market has experienced a slight panic-driven pullback, mainly due to the 'understanding king' showing inconsistencies regarding China-U.S. trade, leading to a short-term pessimistic market sentiment.
When analyzing issues, it's essential to grasp the primary contradiction and its main aspects. Currently, the U.S. April core PCE has hit a new low since March 2021. Although the Federal Reserve is not lowering interest rates recently, it has ended the balance sheet reduction and still has considerable room for rate cuts, with the expectation of stable coin growth in U.S. Treasuries exceeding a trillion and the recent SEC ruling that ETH staking is not classified as securities, both are long-term favorable factors.
The market has now largely been influenced by the 'understanding king.' However, even the strong 'understanding king' cannot long violate economic laws; prices will eventually return to value. On the other hand, the 'understanding king’s' repeated trade tariffs on various countries have further stimulated the world's demand for cross-border payment in digital currencies.
Technically, I think this callback is very healthy. The violent surge of Ethereum has attracted too much capital to break through trends, and clearing some leverage is very good. Now that more people are shorting, the future will be even more explosive. If there are leftover bullets, it’s excellent to buy some ETH spot during this wave.
Altcoins have collectively plunged, and many retail investors who just gained a bit of confidence are hit hard again, their mentality is on the verge of collapse.
But amidst this dire situation, there is a detail worth noting: Ethereum has not followed the violent drop. Instead, it is working hard to stabilize its rhythm. This may indicate that the main force's strategy has changed — it is no longer 'full-scale clearing,' but rather focusing on clearing altcoins while keeping the main chain stable.
If this judgment holds, then this wave of altcoin's tragic decline may be the last clearance before a major market trend.
The current decline feels very uncomfortable, especially for those who didn’t reduce their positions near 2750. When the price drops, but there are no funds to supplement, the psychological burden becomes unbearable, leaving you just watching.
If Bitcoin drops again, for example, to around 102,000, altcoins may continue to plummet, and market sentiment may be ignited. But the true market often emerges during such 'emotional extreme' moments.
Another detail is that the mainstream voices at the Bitcoin conference generally expect prices to be between 100,000 and 200,000, which is far below the previous heated slogans of 500,000. The main force is actively lowering expectations and quietly gathering strength.
Retail investors are increasingly 'holding dead' and are unwilling to operate frequently. The main force, facing this situation, often uses the tactic of oscillation to wear down willpower. For example, Ethereum rises to 3500, then drops back to 1800, then rises back again only to turn back... making you think it's about to take off every time, but you end up getting slapped in the face repeatedly.
They not only clean up positions but also cleanse faith. The more steadily you hold, the harsher they wash, until you concede and hand over your chips, then the market really begins.
From an overall trend perspective, I still hold a bullish view, especially in June, when we may see favorable policies. In the short term, Ethereum's current decline has already established a preliminary bottom. If it can return to 2100 or even lower, that will be an opportunity for us to heavily invest.
Finally, a reminder: the direction is upward, but the process is bound to be torturous. What you need to do now is stay calm and keep some cash on hand. Every significant drop is an opportunity to get back in. You don't need to bet on the top or the bottom, but you must stay in rhythm.