Recently, I've been bombarded with questions in the background: 'Gold has risen over 40% in five months, why hasn't the leading cryptocurrency made a move? Is the bear market really coming?' In fact, every time I encounter such questions, I remind everyone to look back at the 'rotation rules' hidden in the cycle of the 2020 market, which is the key to understand right now.
The 'script' of 2020: Gold was the main character first, and cryptocurrency made a comeback later.
Many newcomers may not have experienced the market trend of 2020. Let me help everyone review the core rhythm again. From March to August that year, gold surged by 43%, and the attention of the entire market was focused on it, definitely the 'traffic leader.' Meanwhile, the leading cryptocurrency, although it appeared to have risen by over 160%, if you look closely, you'll find that it merely filled the 'pit' of the big drop in March, with prices basically returning to pre-drop levels, which is a form of 'passive recovery.'
The real turning point came after gold peaked—when gold entered a three-year consolidation period, the leading cryptocurrencies suddenly 'switched modes,' skyrocketing from around 10,000 to a historical high of 63,000! This is key: Gold is often a 'leading indicator' of market liquidity easing, while the cryptocurrency market needs time to complete washouts and fund rotations, categorizing it as a 'lagging cyclical asset.'
Current signals: Gold is taking a breather, and crypto is gathering strength.
Returning to the present, the situation is remarkably similar to 2020. After rising more than 40%, gold has recently shown signs of topping out, which is actually a signal that funds are beginning to look for the next 'breakthrough.' Many people are hastily shouting 'bear market,' but they overlook the support of the macro environment, which, although not as 'loose' as in 2020, is currently in a clear rate-cutting cycle, and the Federal Reserve has also paused balance sheet reduction; liquidity in the market is not lacking.
Key Reminder: The US debt has just surpassed $38 trillion, which means that the 'money' in the market has not decreased. The sharp rise of gold, a 'stable asset' preferred by large funds, itself indicates that the market lacks upward momentum; it is just that the funds have not yet completed the rotation from gold to the cryptocurrency market.