Crypto enthusiasts, hello everyone! Your humble servant is back, and today we are discussing the hottest news in the crypto world. Buckle up because the market, as always, continues to surprise, but we, as experienced investors, look at it through the lens of reasonable caution.
Bitcoin and its 'mysterious' sideways movement - A sign of maturity or calm before the storm?
So, our old friend BTC continues to behave like an experienced poker player, not revealing its cards. In recent weeks, we have observed fairly stable sideways movement, with BTC price fluctuating between $60,000 - $65,000. Trading volumes have somewhat decreased, with the average daily trading volume for BTC around $20-25 billion, compared to peak levels of $40-50 billion during active rallies. BTC dominance is also holding around 52-54%.
* My view - I have always maintained that Bitcoin is the foundation, and everything else is just an extension. This sideways movement is not a reason for panic, but rather a sign of the market's growing maturity. Major players are likely accumulating positions, but we must remember that there is always room for unpredictable corrections in the market. I would consider this an opportunity for averaging down, but without unnecessary hype. Don't forget that the history of cycles shows that after every rise comes a pullback. It is important to monitor trading volumes: if they continue to decline, it may be a signal for a deeper correction.
Ethereum and rumors of 'flippening' - Don't jump ahead
ETH continues to hold strong, trading around $3,300 - $3,500. Talks of a potential 'flippening' (surpassing BTC in market capitalization) are gaining traction again, especially considering the upcoming updates and the successes of L2 solutions. The total locked value (TVL) in Ethereum-based DeFi is currently around $60-65 billion. Average gas fees have decreased to 10-20 Gwei during normal times.
* My view - Let's be realistic. Flippening is certainly a catchy headline to attract attention. Yes, Ethereum shows enormous potential in ecosystem development, and its utility is undeniable. But putting it on par with Bitcoin is still premature. BTC has the first-mover advantage and the status of 'digital gold', which is not fully available to ETH. I would recommend looking at projects on Ethereum that solve real problems, but always remember the risks associated with new technologies and their regulatory uncertainty. Do not put all your eggs in one basket, even if that basket looks very promising.
Altcoin Season - To be or not to be? - Time for a conservative approach
Some altcoins are showing impressive growth. For example, some projects in the AI token sector have seen a 30-50% increase over the past week, while meme coins from the 'second tier' have risen by 100-200%. The total market capitalization of altcoins (excluding BTC and ETH) is around $600-700 billion.
* My view - My experience suggests that 'altcoin season' is always a double-edged sword. For a conservative investor, this is more a time of increased risk. Yes, you can catch big gains on certain projects, but the likelihood of losing a significant portion of investments on so-called 'hype' coins is much higher. If you haven't taken profits at the highs, now is the time to reassess your portfolios. I would advise focusing on projects with strong fundamentals that have already proven their viability. Diversification and prudent risk management are not just pretty words; they are the foundation for capital preservation in such periods.
Regulatory pressure is increasing - A necessity that must be accepted
News of potential tightening of crypto market regulations in various countries continues to come in. Discussions are ongoing about new requirements for stablecoins, which may require 1:1 backing and regular audits. Further actions by the SEC regarding token classification are expected in the US.
* My view - Regulation is not evil, but a necessary step in the development of any market. It will filter out fraudsters and bring much-needed stability and transparency, which will ultimately attract more institutional investors. Yes, this may cause short-term fluctuations, but in the long run, it will benefit the entire crypto space. We, as investors, must be ready for changes and adapt our strategies. The key is the clarity of the rules of the game, not their absence.
DeFi and NFT: Where are we heading? - Caution in innovations
The DeFi and NFT markets continue to evolve, but with different dynamics. In DeFi, we see the emergence of new protocols and growth in volumes. For example, TVL in Liquid Staking Derivatives (LSD) increased by 15% over the last quarter, reaching $40 billion. As for NFTs, after a peak of $40-50 billion in trading volume in 2021-2022, the market is currently in a correction phase, with monthly trading volumes around $0.5-1 billion.
* My view - DeFi is undoubtedly a breakthrough in the world of finance, but let's not forget about its inherent risks: smart contracts can have vulnerabilities, and the regulatory framework is still being formed. Investments in this sector require a deep understanding of protocol mechanics. As for NFTs, after the initial euphoria, the market, as expected, is going through a 'cleaning' phase. Most projects lacking real value will fade into oblivion. I would recommend focusing only on utilitarian NFTs and those backed by strong brands with confirmed value in the real world. And remember, not every NFT is an investment; most are just a digital collection.
In conclusion
The market has always been and will always be unpredictable. Do not succumb to panic and do not chase ephemeral 'moons'. Always conduct your own research (DYOR!), manage risks, and remember the long-term perspective. And most importantly - do not invest more than you are willing to lose. In crypto, as in life, moderation and prudence always yield the best results.
What aspects of the current market situation concern you the most in terms of capital preservation?