Technical Analysis of the Cryptocurrency Market

To start with the conclusion, I think analyzing individual stocks does not hold much significance. When market sentiment is good, 80% of stocks will rise, and vice versa. Therefore, determining the macro market sentiment cycle is key. Generally, it is common to look at composite indices to identify market sentiment, but this index is dynamic, always selecting the top or strongest market capitalization stocks as components. This leads to the index either rising or moving sideways, making it difficult to have significant declines, while individual stocks may be plummeting. Thus, the index is a somewhat optimistic indicator.

Additionally, for cryptocurrencies, there is an unlocking mechanism; for example, prices may drop significantly, but the circulating market cap may not drop much. If the initial circulation is 15% and it unlocks to 75%, even if the price drops five times, the market cap remains unchanged.

I currently use a very effective method of observing the stock prices of key companies, such as Tesla or Ethereum, as they seem to better reflect the overall market sentiment. These two appear to synchronize quite well, having started to adjust since 2021, likely corresponding to the fourth wave of Elliott Wave Theory. Therefore, I believe that the fourth wave adjustment is coming to an end, and the cryptocurrency market, as well as the AI and new energy sectors, will experience a few years of rising to reach new highs.

As for Bitcoin, I believe it functions more like a composite index for the crypto market, similar to how buying the S&P 500 can outperform most individual stocks.