The market conditions of the past few days, to put it bluntly, are simply dead water with minimal ripples. The trading volume of Bitcoin above $100,000 is currently almost the same as when it just broke $10,000 in July 2020. Four years have passed, and the market has followed the same rhythm; where has the money gone? Liquidity is exhausted, and the market is stagnant. More worryingly, around 105,000 points, chips are highly concentrated; once the main force takes control, leveraged liquidation can happen at any time, and the scenario of 'cutting once, then collecting again' can play on repeat.
Keynes said: "The market can remain irrational longer than you can remain solvent." This phase is strikingly similar.
What’s the outlook for the short to medium term? The Fed's interest rates are likely to remain unchanged in June, and there isn’t much room for rate cuts in July. Without policy catalysts and new incremental funds, Bitcoin can only consolidate at high levels. This position provides neither the sustaining power of a bull market nor a clear reversal signal. However, my uncle wants to say that even if the market corrects later, institutional ETF buying is still injecting capital, and the correction space is controllable, so a crash is unlikely.
On the macro front, CPI and PPI data will be released later this week, and the current market expectations remain high. If there is a significant deviation between the data and expectations, it will have a considerable impact on the current stagnant market. If the pace is fast, it will change; if slow, it will grind. At the same time, traditional finance's embrace of crypto assets is accelerating: Goldman Sachs has quietly expanded its crypto trading team, preparing to make bigger moves in BTC derivatives. "Only when the tide goes out do you discover who’s been swimming naked." — Buffett, this quote is quite fitting for now; traditional finance has quietly changed into swimwear while we in the crypto circle are still spinning in place.
The larger cycles are worth pondering. Last year, with the approval of ETFs, Bitcoin experienced a significant bull run, breaking the old script of the halving cycle. The explosive phase of meme coins on Solana has fundamentally rewritten the pricing and issuance logic of altcoins. Currently, capital is severely polarized, quality assets are scarce, altcoins are rampant, major institutions are reluctant to sell, retail investors are waiting, and the Fed's liquidity faucet is tightly shut, leading the market into a structurally anxious period.
An old friend of my uncle, whom he hasn't contacted in a long time, entered the crypto space in 2017 and bought a house in 2021 thanks to Ethereum and NFTs. He returned to the Solana ecosystem last year, only to step on a landmine now. A couple of days ago, he told me: "The market is too strange now; the bulls don't look like bulls, and the bears don't look like bears." I replied, "This is like boiling a frog; many people aren't even aware of where the pot is."
This boiling water is indeed the breeding ground for the 'largest bubble in history.' On one hand, mainstream coins are deeply bound by ETF institutions, forming a 'debt-like' stable state, while on-chain activity has not increased correspondingly, and valuations have begun to significantly deviate from fundamentals; on the other hand, meme coins and AI narrative coins on the Solana chain are being frantically speculated, and the multiples of on-chain funds leveraging market capitalization have far exceeded those in the last bull market phase. What’s worse is that the capital structure is extremely fragile; the rotation of existing funds is rapid, and once new funds enter, they can easily fuel the acceleration of the bubble.
As Soros said: "When I see a bubble, I run faster than anyone. But before the bubble bursts, I dare to place my biggest bets." The current state of the crypto market is just that: one side is languishing due to low liquidity, while the other is hiding tremendous leverage and nascent bubbles. If the Fed loosens its monetary policy even slightly in the future, combined with the expansion of global M2 over the years (which is already unquantifiable), and if Trump continues to push for some of the US debt funds to flow into the crypto market, this cycle could quickly evolve into the largest crypto bubble cycle in history. By then, the massive influx of retail investors attracted during the FOMO phase may find it hard to escape their positions.
"History does not repeat itself but often rhymes." — Mark Twain.
This time, the rhythm of the crypto market is destined to be anything but ordinary.
BTC: The fundamentals of Bitcoin's market have not changed significantly; excluding the abnormal drop of the past two days, the market has been in a middle-position adjustment phase. On the trend, my uncle's view is still clear: there is currently no capital to support a direct reversal of the market. A prolonged high-level adjustment is accompanied by a certain degree of short-term downward narrative. The difference between today and yesterday is that the short-term market cycle has slightly strengthened for one-hour and four-hour bullish trends. Whether it rises first and then falls or adjusts at high levels, there is a necessity for the market to test lower levels before a structural transfer of chips; thus, those who have already reduced their positions should patiently wait. Technically, the hourly high point is 108,000 points, and the daily high point is 110,000 points. Strong support is at the 100,000 point level and 97,000 points. The bull-bear dividing point is at 95,000 points, which is also the current concentration area of chips. Let's continue to wait for the trend to confirm.
ETH: Ethereum's structure is not as strong as before, and the exchange rate is under pressure, short-term linked to Bitcoin's trend. However, macro-level leading institutions have begun to shift their holdings to Ethereum. If the trend remains this week, we can essentially confirm the trend of the next round of market where Ethereum takes the relay, and we should focus on holding it.
Altcoin markets are fluctuating and tracking closely; the current market is in the final adjustment phase, waiting for the bottom to come after volatility expands.
Other issues can be discussed in the comments section.
The Fear and Greed Index is 62 for the day.
Finally, stay away from leverage and stock up on spot assets!
