Source: Talk Li Talk Outside
In the past few days, the market seems to lack some emotional heat. Bitcoin continues to oscillate in the high range, and the overall trend appears relatively stable. Most people (capital) are likely still observing or waiting for some important news, while daily discussions among group partners mainly focus on some hot news topics:
(1) The ancient whale with 14 years of dormancy awakens
I briefly looked into it, and this news seems to have originated from a tweet released by Lookonchain, which indicates that a Bitcoin holder with at least 80,000 BTC has begun to awaken after 14 years of silence and has gradually transferred their holdings of Bitcoin, as shown in the image below.
Subsequently, this message began to spread rapidly across major crypto media and self-media platforms, followed by various speculations from people, such as: Some say this ancient whale is an independent miner from 2011, some say it is a Chinese national who has completed their prison sentence, and others say this is a super player testing the market's reaction...
As for whose 80,000 Bitcoins they are, suddenly choosing to wake up now seems to imply potential huge selling pressure on the market? Or is it merely a test by the super players? We cannot know this for now, but from Bitcoin's price movements over the past two days, it seems that there is no sign of a rush to exit due to this matter.
I view this kind of news quite calmly. If everyone is interested, you can use on-chain data tools like Arkham to monitor the transfer movements of those Bitcoin addresses in real-time.
Since we are talking about whales, let's take a look at the overall dynamics of Bitcoin whales at different levels:
By observing on-chain data, Shark wallets (holding 100–1K BTC) are still actively increasing their holdings, while Whale wallets (holding 1K-10K BTC) and Humpback wallets (holding >10K BTC) have been generally in a selling trend over the past year, as shown in the image below.
From this data, we can further speculate that Bitcoin seems to be entering a structural capital redistribution process over the past year, with early whales starting to exit, while some institutions/funds and medium-sized players are beginning to take over and gradually build positions. I believe that in the medium to long term, whale selling is not necessarily a bad thing; Bitcoin becoming more decentralized can help reduce the risk of whale price manipulation to a certain extent. In other words, in the short term, whale sales may suppress the price of periodic trends, but as long as medium-sized players can continue to accumulate, the market should still be worth looking forward to in the medium and long term. However, in this game of human wealth migration, it is likely that those who will suffer more in the end will be the Crabs (wallets holding 1-10 BTC) or Shrimps (wallets holding around 1 BTC).
(2) The U.S. House of Representatives votes to pass the 'Big and Beautiful' Act
In last month's article, we highlighted two bills, namely the GENIUS Act (full name: Guiding and Establishing National Innovation for U.S. Stablecoins Act) and the CLARITY Act (full name: Crypto Legal Accountability, Regulation, and Transparency for Innovation in Technology Act). Both of these bills are closely related to the crypto market. The former is an important bill to regulate and legalize the stablecoin industry, while the latter will establish clear rules to classify digital assets as commodities or securities.
The recently passed Big and Beautiful Act (One Big Beautiful Bill), although seemingly unrelated to the crypto market, means that (the Trump administration) will continue to initiate a more aggressive fiscal expansion plan.
We can look at this from two angles: In the short term, the series of related measures brought about by the Big and Beautiful Act will certainly enhance employment, stimulate consumption, and revitalize the stock market to some extent. However, in the long term, it may also bring risks of debt imbalance and lead to continuous devaluation of fiat currency.
However, looking at these bills comprehensively, they seem to be long-term bullish for scarce assets like Bitcoin and will further enhance Bitcoin's digital gold attributes.
(3) Does the FTX compensation plan exclude Chinese users?
Regarding the FTX compensation issue, we have discussed and tracked it several times in previous articles. Originally, many people had been waiting a long time to receive compensation, which could be considered a relatively hopeful thing. However, there has recently been news that creditors from 49 jurisdictions, including China, may lose their claim rights. These creditors' claims account for 5% of total funds, valued at approximately 825 million USD (calculated based on 1.65 billion USD total compensation assets), of which 82% belong to Chinese creditors, with claim assets valued at approximately 676.5 million USD.
The memory of the FTX collapse in 2022 is likely still fresh for many people. After more than three years of long waiting, the promised bankruptcy liquidation may ultimately result in a 'legal plunder', and those Chinese users excluded from the legal system have no recourse. Currently, they seem to have to try to obtain the compensation they deserve through special means (such as transferring claims to entities outside China or transferring claims in the name of trustees or other entities outside China). This situation is indeed quite tragic.
Nothing is more painful than losing money in trading than seeing your money being taken away so blatantly by others, while you are powerless to do anything about it.
In summary, this market always seems to have various news that can catch people's attention. The market does not seem to let us feel too lonely; whenever the market is relatively dull, we often see some interesting news like the above suddenly breaking out. However, regarding the overall market trend in the future, we still maintain the main viewpoint (speculation) from the previous article: Although there are still many uncertain factors ahead, if the script remains unchanged, we are likely to see Bitcoin break new historical highs in the third quarter (or delayed to the fourth quarter).
Still, if you value long-term opportunities, just continue accumulating more Bitcoin according to your trading plan. If you value short-term opportunities, it is still the stage to continue focusing on and looking for stable project's timing, without needing to expend all your energy on various news reports and create extra FUD for yourself.
So, how can we better and faster discover phase opportunities?
(1) Based on technical perspective
For example, many people pay attention to K-lines every day, but most likely, they are merely watching the prices on the K-line. If we can use K-lines to identify some price leading and lagging reactions, we can quickly identify some potential Alpha opportunities.
We previously briefly sorted out some basic knowledge about K-lines in our small account (Talk Li Talk Outside DAO), such as breakthrough structures, golden crosses of moving averages, MACD, RSI, and volume-price resonance, etc. We will not elaborate on this here. Those interested in this aspect can refer back to historical articles.
However, we need to remind ourselves to pay attention to the time cycles we are using (hourly, daily, weekly) and also to identify the trading volume/trading depth of the tokens, especially for those small or shoddy coins; the K-line reference is not very meaningful (the market makers can draw it however they want, without any bottom line).
(2) Based on data perspective
Since the beginning of this cycle, it has become relatively difficult to earn considerable returns directly through altcoins, as there are thousands of new coins launched every day, with liquidity more dispersed than ever. Moreover, there is a recent trend of tokenizing U.S. stocks (stock on-chain), which, while bringing some new liquidity and attention, also further dilutes existing liquidity.
As long as the market's volatility remains, and narrative speculation can continue, using some corresponding tools to study and track data, and thus discover some possible opportunities, remains an effective way.
Regarding data tools, we have already included a lot in the 'Talk Li Talk Outside Toolbox', and we shared some in last year's e-book (Blockchain Methodology). Here are a few to recall:
For example, Dexu, which is a data platform based on on-chain and social analysis that provides a series of data such as hot narrative rankings, narrative price performance, industry analysis, project analysis, and market signals, as shown in the figure below.
From the above figure, we can see that the three narratives with the fastest growth in the last 7 days are L1, Crypto Stocks, and Sweet-spot. Among them, the top three projects in price performance for L1 are PLUME, CELO, and ETH, while the top three projects for Sweet-spot are PENGU, AAVE, and HYPE. This also seems to align with the recent market performance, as the speculation around the Crypto Stocks concept has been quite popular recently, while L1 carries technological integration and Sweet-spot supports ecological landing. These are some of the reasons for the good price performance of such projects.
Regarding Crypto Stocks, let's discuss this a bit more. Many people now see Crypto Stocks as a significant bearish factor for the crypto market because it could lead to a diversion of existing liquidity. This is theoretically correct, as we mentioned earlier. However, I believe that Crypto Stocks are historically significant for the development of the crypto industry, and we do not need to view the entire crypto industry negatively just because of this development. It needs some time to practice. Moreover, compared to the traditional stock market, there are still some interesting aspects regarding Crypto Stocks, such as:
- People can invest in unlisted private companies like OpenAI and SpaceX through platforms like Robinhood, which was previously difficult for retail investors to do (although currently participating in this form does not represent true shareholder rights).
- If the related Crypto Stocks can be used permissionlessly in DeFi in the future, the imagination around this matter is indeed significant.
Currently, the global stock market capitalization is about 122 trillion USD (according to WFE report data), while the market size of Crypto Stocks is only 425 million USD, as shown in the figure below.
Let's imagine that in the near future, people can directly use protocols like Pendle to bet on the future dividends of American companies, or use protocols like AAVE to collateralize on-chain stocks for lending. They could even continue trading stocks on-chain during traditional stock market closures. Compared to traditional stock trading, on-chain trading can achieve lower fees, better trading experiences, and higher capital utilization. Doesn't that seem like an interesting thing? Of course, Crypto Stocks will also face regulatory issues next, but with the advancement of regulations and related bills (mainly from the US) concerning the crypto industry, there will certainly be corresponding solutions for this in the future. Let the bullets fly for a while.
For instance, Artemis, which is a comprehensive on-chain data analysis platform that provides various data analyses, including data comparisons across different chains, data comparisons between different protocols, stablecoin data across various chains, developer activity across chains, and comparisons of on-chain capital inflows and outflows, as shown in the image below.
From the above figure, we can see that the three chains with the highest net inflow of funds in the last 7 days are Ethereum, Polygon, and Unichain. The activity on Ethereum may be mainly based on the recent hype around RWA topics (as many RWA projects are built on Ethereum), and it may also be related to the expectations surrounding ETH ETF staking. Polygon is likely benefiting from the recent popularity of the Crypto Stocks concept. As for Unichain, UNI, as a typical Sweet-spot, may have also received some capital interest recently.
Due to limited space, we will simply list Dexu and Artemis as two data tools here. Interested individuals can refer to our previous compilation of the 'Talk Li Talk Outside Toolbox' for more on-chain tools. Additionally, apart from the technical and data-based tools mentioned above, you can also make auxiliary judgments based on macro perspectives and news dimensions, and these choices should depend on your own capital size, investment cycle plans, and personal risk preferences.
Of course, the examples above do not mean that we should blindly buy related project tokens just because we see certain data performances in the past or recently based on some dimensions. The main purpose of using data and other dimensional tools is to help us identify narratives and projects that are worth further research. After all, there are now over 200 narratives (tracks) in the crypto field, and we cannot possibly have enough time and energy to study them all. Data and other dimensional tools are meant to help us make directional choices.
Based on this directional choice, if we want to invest in a certain project or several projects, we still need to observe with certain angles, including how the token economics of the project looks (such as token distribution, token utility, large unlocks recently, etc.), the community activity level, product experience, product data performance (such as Fees/TVL/Revenue, etc.)... In short, you need to research the aspects you care about the most. DYOR, and only consider investing after it aligns with your preferences.
Moreover, the above studies are all basic-level research; the price performance factors in the market are often determined by multiple aspects. Especially in a clear upward trend, the price trend seems to pay little attention to the project's fundamentals. Emotion and capital speculation can directly make a token (represented by MemeCoin) take off. However, in the long run, investing in projects with good fundamentals is certainly much safer than investing in shoddy projects, especially under overall severe market conditions. Tokens with good fundamentals are at least relatively more comfortable to hold.
However, our advice remains unchanged when choosing such matters: newcomers should add first and then subtract, while veterans should directly subtract. Learning is a process of reducing from many to few, and most people's investment journey is also like this. Under the premise of mastering necessary basic knowledge, in the actual trading execution process, we do not need to establish overly complex trading systems or strategies, nor do we need to participate in too many project trades. Instead, we should learn to simplify for ourselves, as long as we find or form a few core indicators that suit us best and maintain a certain level of patience, we can basically surpass over 90% of ordinary investors in this field.