Hello everyone, I won’t go too much into self-introduction here.
The market at the beginning of this year is not very optimistic, especially under the influence of last year's trends and the state of stagnation. As the year began, many seasoned investors started to lose confidence, causing many to avoid this market and hold no hope. New investors are even more afraid to enter, meaning no off-market funds are coming in. Those in the market who have not cut their losses can only wait; they are too afraid to act. Thus, there is no apparent movement from either off-market or on-market funds, leading to a situation where off-market funds are hesitant to enter, while on-market funds are reluctant to act, causing the market to become lethargic. I have repeatedly said that this market is controlled by capital, essentially a retail investor market. However, relatively speaking, this market does have a certain wealth effect because only the wealth effect can drive off-market funds to enter, creating a certain level of market activity, which will subsequently increase trading volume and lead on-market funds to move. The current market is stagnant, but I firmly believe there will be market activity this year, and it may initiate a bull market. Do not discard your chips; this year is your long-awaited altcoin season.
Let's first look at the essence of the problem.
The birth of the early cryptocurrency market was the creation of a financial storm, with BTC seeing a tenfold increase that made off-market funds, capital, and retail investors see the wealth dream of this market. This was the creation of a wealth effect that could achieve financial freedom overnight, leading more people to regret not buying BTC when it was just a few dollars. To be honest, even if you had it back then, you wouldn't be able to find it later unless you were in contact with the initial group who instilled faith in you to understand this circle. Otherwise, as a small investor, even if you had it, you wouldn't be able to recover it now, so this dream was shattered. Subsequently, the secondary market exchanges that allowed online trading emerged, making more people aware of the market entrance and providing a platform for online trading. More people entered crazily during the early DEFI, oil refining, NFT, public chain and other narrative-driven market surges, creating a wealth effect that brought in more off-market funds. When there are increases, there are decreases; simply put, if some people make money, others must fill the gaps. Thus, those who come in later are here to take over and fill the gaps, which is the characteristic of a capital market filled with retail investors. Later, small capital and institutions began to intervene in rounds, from issuing coins in the primary market to more narratives afterward. Hot topics such as inscriptions from the year before, AI, and fan tokens have attracted more newcomers, but the latter are merely hot topics and not symbols that can truly realize value in the cryptocurrency world. I said in 2022 that moving forward, it will either be the landing of WEB3.0 or a bull market for BTC. A true bull market where all coins soar won't happen again; at most, we will see tenfold increases, and only for some. This statement has precisely manifested in the current environment. Last year's market showed this performance; aside from a few hot topics (which are actually just capital operations) experiencing tenfold increases, most altcoins saw only a few times' increase, with three to five times' increase being common. It is difficult to see the kind of hundreds of times' increases again; this is the current market environment.
Why emphasize that this year is a bull market?
Currently, the market is in a period of weakness, and many narratives have not appeared. Everyone generally believes that BTC is the true king of the cryptocurrency circle; only holding BTC guarantees a future. However, I do not agree with this view this year. Firstly, BTC's market capitalization is already very high. How much higher can its price rise in the future? If prices continue to increase, it will be even more inaccessible to retail investors. Retail investors entering the market have little effect; BTC itself is a trading chip for certain individuals (premium trading), and its future space for appreciation is minimal. This means there isn't much room for future appreciation, but its ability to resist declines is naturally present, and the downward space will be limited because this is the last belief that cannot collapse in the cryptocurrency circle. Furthermore, regarding the wealth effect, last year's market left everyone disappointed, especially as this year's early market fell continuously, with altcoins experiencing a bottomless decline, leading many to lose confidence and give up on the market. This is the effect that major players desire and even plan for the next steps. When no off-market funds dare to enter the market and on-market funds are either cutting losses or hesitant to act, the next narrative will emerge, signifying that the bull market is about to genuinely begin. Capital operations may not yield significant increases in BTC's price, but as long as the direction is correct, focusing on the altcoin sector, the entire sector will take off. This is when the wealth effect will manifest. The current poor economic situation will make more people who do not understand the cryptocurrency circle or have not yet entered see the wealth effect, prompting them to enter. Once they enter, they will see coins increasing tenfold or even a hundredfold, creating myths of a hundredfold gains. This will also be their opportunity to take over, becoming what we are now. However, for those of us who have remained in the market without leaving, sticking with the major players until the end will yield the greatest dividends. The cryptocurrency circle wins over people through increases; only when there are increases and wealth effects will people enter. If it only declines and does not rise, even fewer will believe it, thinking the cryptocurrency circle is a scam, losing whatever they put in. Since this is a capital-driven retail environment, they will not give up. As long as they do not give up, wealth effects will emerge, leading to tenfold or hundredfold coins, and our chance for a turnaround will come; it is just a matter of whether we can seize the opportunity.
Sectors to focus on this year.
I am focusing on gaming, AI, and public chains.
Firstly, it is emphasized that the gaming sector is not a bubble; it has applications and is not like the meme sector that purely relies on capital operation to drive prices. Many will ask why I don't mention DeFi, as it drove the bull market in the early days, but later the bubble was digested, limiting operational space. However, the gaming sector can operate long-term and will have new games born to invigorate the market. Additionally, AI is a direction currently being researched, and it is also a hot topic for speculation. The leading coins or the top three strongest coins in these sectors are what you should focus on or pay attention to. Lastly, regarding public chains, Solana previously led the way, and many older coins saw good increases last year and were resistant to declines. XRP and LTC were emphasized last year as coins to hold in large amounts. As for why BNB is so strong, because (Binance's platform coin) they need to operate, and when prices are high, they can sell off to realize profits, while new coin offerings are also needed for both parties to profit. This is the most realistic issue. The reason to focus on the top three sectors' coins is simple: their project teams will not give up, and the major players will not give up. After working for so long, they can raise prices at any time to realize profits. Giving up would be akin to leaving money on the table. However, the current market is poor, and the market's stagnation has caused many to hesitate to step forward. Only when the overall situation improves will these coins perform better, attracting more people to enter. Additionally, when prices are rising, there will only be buyers, not sellers, because everyone shares the same belief: during a rise, they hope for even more significant gains, and only during a rise will they dare to chase. Conversely, during a decline, they are afraid to buy. This is why many older coins did not decline much last year; they remained strong because the major players are strong, leading to this situation.
The current market needs a catalyst. From a technical perspective, BTC still has significant downward space, but for ETH, the downside appears limited, with 1800 being a crucial level that cannot be breached. This has been a topic discussed since last year, making it a complicated issue. Previously, it was mentioned that BTC had dense zones below at three positions: 76-72-68. The last low was around 78, and today's lowest point was around 80000. However, this also signals a short-term support level being built. The downside space for ETH is quite apparent, and the current market confidence in ETH is not very strong, but it will undoubtedly be a powerful force in the future; otherwise, this market would struggle to operate. It is expected that this year, speculation in ETH will start to invigorate the market, subsequently revealing coins capable of driving wealth effects that will make the market lively. Then, the overall altcoin sector will gradually take off. Not to mention hundreds of times' increases, this year, if the market performs well, several times to tenfold increases are still possible. If WEB3.0 is not realized, the drive from ETH will still improve the market, but it won't be a significant bull market with all coins soaring hundreds of times. However, increases of several times or even dozens of times should be sufficient for the current market. A small bull market is also acceptable, as long as it is a bull market rather than the false bull market of last year, characterized by a phase of rising followed by quick declines without continuity.
This year, the key is to hold on to your chips. In this situation, just don't give your chips away. If you have funds, gradually average down; hold tight and defend your position. If you lack funds, just relax; you only need to wait a few more months. There will definitely be a wave of market activity before May, during which everyone will become active. However, remember to grasp the opportunities presented to you afterward. Do not wait until the market peaks and then think the bull market has started, gradually emptying your positions. Properly layout your strategy; it's not about shouting bull market at the first sign of an increase. You must always maintain a clear state of mind in this market; don't blindly follow the trend. The current market may seem bad, but it doesn't mean there is no market activity. If there were no market activity, how could it attract retail investors to enter?
Remember, brothers, you can share this. I am Lao K, and everyone should pay more attention.
