Xiao Yu: Cheng Ge, I see everyone in the group talking about the market rebound today, ETH and SOL have both risen, and there's one called Hyperliquid that has directly hit a new historical high. What’s going on? I was afraid of adjustments and didn’t dare to increase my position!
Cheng Ge: Don’t rush, let’s take it step by step. First, look at the broader environment— on Wednesday morning, the total crypto market cap fell to 3.79 trillion dollars, but by the afternoon, it rebounded to 3.96 trillion dollars, which is a recovery of 170 billion dollars in half a day; that’s a significant rebound. Specifically, BTC has risen 2% from its low, now around 112,000 dollars; ETH is more stable, having reclaimed 4600 dollars; the strongest is SOL, which rose directly by 8.7% to 210 dollars, ranking first among the top ten altcoins by market cap. And about Hyperliquid, it surged 24% in 6 hours, breaking the new high of 50 dollars; this is a 'dark horse' among small-cap coins.
Xiao Yu: Why is there a sudden rebound? Is there some good news? I saw it was continuously dropping before.
Cheng Ge: The main thing to watch is the movement of 'whale funds'—players with large amounts of capital are starting to enter the market. Look for two signals: First, Tether just minted 1 billion USDT. USDT is a stablecoin, and a large minting indicates that whales are preparing funds to enter and buy coins, which is a 'bottom support' signal for the market; second, on-chain data shows that the number of large addresses holding BTC has increased—a total of 2087 addresses now hold at least 1000 BTC, which is the highest since early August, with 13 new addresses recently. The same goes for ETH, where the number of addresses holding over 10,000 ETH has increased by 48 to 1275. When large funds dare to enter, market sentiment naturally rises.
Xiao Yu: Oh! So the big funds are buying. I heard people talking about 'capital rotation' and that the 'altcoin season' is coming. What does that mean? Is it related to the current rebound?
Cheng Ge: It’s very relevant! 'Capital rotation' means money is moving from BTC to ETH and altcoins. You can see from the data: in the past few weeks, the ETH spot ETF in the U.S. has been much hotter than the BTC ETF. On August 26, BlackRock's ETH ETF (ETHE) received 323 million dollars in one day, and the total amount for all U.S. ETH ETFs that day was 455 million dollars, accumulating to 13.33 billion dollars; while the BTC ETF only received 88 million dollars, and BlackRock's BTC ETF (IBIT) received only 45 million dollars—not even close to ETH's fraction. This shows that institutions and large funds are more willing to buy ETH and similar altcoins now rather than just holding BTC.
Xiao Yu: So does this mean that altcoins will rise collectively next? Is the 'altcoin season' really coming? I’m still stuck with the small coins I bought before; can I break even?
Cheng Ge: It seems very likely now, and there’s a key catalyst— the Fed may lower interest rates in September. Last week, Powell hinted at this during the Jackson Hole meeting, suggesting a rate cut in September. Lowering rates means more money in the market, and this money will flow to high-yield places, with cryptocurrencies, especially altcoins, being one of the high-yield options. Previously, BTC rose a lot, and now the money is shifting to altcoins, which is a 'catch-up' logic. For example, Tom Lee (the analyst who accurately predicted BTC previously) recently said that ETH could soon reach 5500 dollars. If ETH leads the way, other altcoins will definitely follow. If your small coins are in mainstream sectors (like DeFi or GameFi), the chance of breaking even is high.
Xiao Yu: So what should I do now? Should I quickly increase my position or wait for a pullback? I’m afraid of chasing high and getting stuck.
Cheng Ge: It depends on the situation. If you already hold mainstream altcoins like ETH and SOL, and your cost is not high, then hold on and don't sell easily—the trend has just started. ETH is holding at 4600, and SOL is stabilizing at 210, both are strong signals. If you haven't entered yet, don’t chase after new small coins like Hyperliquid, the risk is too high; you could wait for ETH to pull back to around 4500 and SOL to around 200, then add in batches—start with 30% of your position, and don’t go all in.
Xiao Yu: So if the 'altcoin season' really comes, which coins should I choose? Will all altcoins rise?
Cheng Ge: It's definitely not the case that everything is rising; you need to select those that have 'capital attention + ecological support.' First, look at the coins in the ETH ecosystem, like the DeFi projects (such as Aave and Uniswap) I mentioned before. When ETH rises, they will benefit as well; secondly, look at the coins in the SOL ecosystem. SOL itself is rising sharply, and the GameFi and NFT projects in its ecosystem will also have opportunities; finally, stay away from 'air coins'—these are coins with no actual applications and opaque teams. Even if they rise in the short term, they will drop quickly and are easy to get stuck with.
Xiao Yu: Great! I remember that. What other signals should I pay attention to later? What if there’s another adjustment?
Cheng Ge: Focus on two key points: First, can BTC stabilize at 110,000 dollars? Can ETH hold at 4600—these two are the 'market anchors.' If they drop, altcoins will surely follow; second, if there’s news about the Fed lowering interest rates in September, if it’s announced, the altcoin season will come even stronger. If not, it may pull back. Additionally, keep an eye on on-chain data; if the addresses holding large coins start to decrease, it means large funds are running away, and you should reduce your position.
Xiao Yu: Got it! Thank you, Cheng Ge. I was a bit confused before, but now I understand much better. It seems that I don’t need to fear adjustments; finding the right opportunities can actually let me increase my position.
Lao Zhang: Yes, market adjustments are not a bad thing; they actually provide entry opportunities. But remember not to be greedy; come in batches and select coins from mainstream sectors, which is much more stable than blindly chasing 'dark horses.' We can chat anytime if there are any changes.
