The prices of mainstream cryptocurrencies have generally declined recently, causing investors to worry about the trend. Combining market dynamics with industry fundamentals, the current correction may be more of a technical adjustment rather than a long-term turning point, and the **opportunity window for adding positions on dips may have emerged**. The following are key analysis and strategy recommendations:
#### 1. Reasons for the pullback and short-term market sentiment
1. Technical Adjustments and Emotional Fluctuations
Since the approval of the Bitcoin spot ETF in 2024, the market has experienced a round of rapid growth driven by institutional funds, and Bitcoin once broke through the $100,000 mark. However, short-term profit-taking, the wait-and-see attitude of some investors towards the Fed's policy shift, and the bursting of the valuation bubble of some altcoin projects have jointly contributed to this pullback.
2. Policy and macroeconomic disturbances
Although the expectation of a rate cut by the Federal Reserve is positive for injecting liquidity into the market in 2025, geopolitical risks (such as sovereign debt issues) and regulatory developments in the short term may still exacerbate market volatility.
#### 2. Long-term supporting factors: The bull market foundation remains intact
1. **Institutional funds continue to enter the market**
The proportion of institutional holdings of Bitcoin and Ethereum ETFs has increased significantly. As of Q4 2024, the total assets under management of Bitcoin ETFs have reached US$78.8 billion. Ethereum ETFs are also expected to upgrade their staking functions, further attracting long-term funds. This type of funds mainly adopts the "buy and hold" approach, which significantly reduces market selling pressure and forms bottom support for prices.
2. **Key event-driven potential**
- **Bitcoin halving resonates with ETF demand**: After the halving in April 2024, miners' daily output will drop to 450 coins, while if the daily net purchases of ETF institutions remain at the level of 1,000 coins, the imbalance between supply and demand may push prices to new highs in 2025.
- **Ethereum Pectra Upgrade**: The upgrade in April 2025 will optimize the staking mechanism and execution layer efficiency, which may lead to the explosion of ETH ecology and Layer 2 projects.
- **RWA (tokenization of real assets) and DeFi 2.0**: Institutions such as BlackRock are planning on-chain treasury bond tokenization. The combination of DeFi and RWA may become the next round of growth engine.
#### 3. Layout strategy: focus on core tracks and risk control
1. **Main position configuration: BTC and ETH**
As the preferred targets of institutional funds, Bitcoin and Ethereum have clear long-term value support. It is recommended to allocate 50%-60% of positions to the two, especially in the callback stage of ETH before the upgrade.
2. **Potential tracks: Layer 2, RWA and GameFi**
- **Layer 2 and modular public chains**: such as Starknet token issuance and TIA ecosystem, benefiting from Ethereum's expansion needs.
- **RWA**: Pay attention to on-chain government bonds and real estate tokenization projects. The integration of such assets with traditional finance may attract incremental funds.
- **GameFi**: A number of blockbuster game tokens will be launched in the second half of 2024, and high-quality projects that have been oversold in the short term have the opportunity to rebound.
3. Risk diversification and small-coin speculation
The remaining 10%-20% of the positions can be allocated to high-potential altcoins, but they need to be strictly screened. For example:
- **Modular architecture projects** (such as Celestia), **decentralized storage** (such as Filecoin);
- **Old-fashioned POW currencies** (such as EAC) with strong resistance to declines have performed robustly in callbacks due to their low transaction fees and community autonomy.
#### 4. Operational suggestions: building positions in batches and dynamic adjustments
- **Buy in batches on dips**: Gradually build positions in the $60,000-70,000 range of Bitcoin and the $3,000-3,500 range of Ethereum to avoid buying at the bottom all at once.
- **Pay attention to macro signals**: The timing of the Fed's interest rate cuts and changes in U.S. election policies may become market catalysts.
- **Stop loss and take profit**: Set a stop loss line of 10%-15%, take profits on some altcoins with profits exceeding 50%, and retain core positions.
### Conclusion
The current correction may be a brief episode in the bull market cycle, and the long-term trend driven by institutionalization and technological innovation has not changed. Investors need to stay firm on the main track while maintaining flexibility to cope with fluctuations. As the market has repeatedly verified, "layout in panic, exit in frenzy" may be the best annotation at the moment.