Yesterday, I temporarily bid farewell to the noise of Twitter, focused on reflection, and conducted an in-depth review and thinking on the recent fluctuations in the crypto market, now sharing with everyone:

1. Main narrative in crypto: An atypical bull market dominated by capital.

$BTC Soaring from 15000 to 120000, this atypical bull market spanning two and a half years has emerged during the tightening cycle.

Excluding the many falsifiable narratives generated by the extreme rebound after the bear market in 2022 (such as L2, modularization, etc.), and the super MEME season caused by a lack of liquidity during the bull market, from a macro perspective, the cryptocurrency space lacks exciting main narratives. Essentially, this is the 'capital bull' dominated by American capital after the market structure change in 2020-2021.

This bull market is characterized by distinct features: altcoins rebound sharply in every small trend while Bitcoin steadily rises, showcasing its kingly demeanor.

2. Ethereum: Capital replication logic under the Bitcoin template.

$ETH Jumping from 1300 to 3800, the logic behind this rapid rise is worth exploring.

First, deconstruct the various stages of Bitcoin's bull market: The rise from 15476 to 30000 is a sharp rebound after a deep bear, while the rise from 30000 to 120000 results from multiple factors, including interest rate cuts, ETF expectations, and subsequent capital inflows.

Looking back at the trend after Bitcoin broke through 30,000 in October 2023, despite encountering negative factors such as Japan's interest rate issues, geopolitical conflicts, and policy changes after Trump's inauguration, Bitcoin still reached new highs, which is undoubtedly the result of a well-laid top strategy by 'McSaylor and others.'

Bitcoin serves as a ready template for Ethereum, and there are signs of capital replicating Bitcoin's path on Ethereum. The rapid rise of Ethereum from 1300 to 3800, except for a brief initial consolidation, has largely followed small technical indicators upward, as this path has just been traversed by Bitcoin, making it familiar ground for capital.

3. Bull market strategy: Balance offense and defense, earn within your knowledge.

Based on the above analysis, the following key conclusions are drawn:

  1. Altcoin positioning: Before a strong internal narrative with great attraction emerges in the cryptocurrency space, altcoins are mainly playing a supporting role in the sharp rebound. Selecting 3-5 coins from tens of thousands that can achieve a 10,000% increase is much more challenging than achieving a 100% return on Bitcoin or Ethereum. If you want to gamble on high returns in altcoins, it’s advisable to first assess whether your positions outperform Bitcoin and Ethereum.

  2. Ethereum's imaginative space: While it’s theoretically simple to give Ethereum enough imaginative space, in practice, due to the natural rejection from trading and technical systems, chasing highs is not easy.

  3. Technical indicators fail: In a bull market, especially small technical indicators often fail. This is also the reason why many technical traders missed out or exited midway in this round of market. Signals like overbought and divergence under the dominant bullish sentiment often mean missing the opportunity to get in because the essence of a bull market is an irrational emotional feast.

A bull market is a great retreat. We can hardly predict the overall market top or the top of individual coins accurately; we can only reasonably plan positions and strategies to cope with unpredictable market trends. Taking profits and chasing highs are not inherently wrong; the mistake lies in blindly chasing after taking profits, not knowing when to stop losses after chasing highs, and being repeatedly harvested after being eroded by emotions.

As the stock market experts say: after offense, the primary consideration is defense; but defense without offense is actually losing money. Finding a balance between offense and defense is the top skill in investing. Don't be greedy; earn returns within your capacity in simple market conditions.

Cryptocurrency rotation cycle: Gaining insights, laying out the future 🌐

With #BTC breaking through 123K new highs, the market has entered a new round of sector rotation. #ETH broke through 3800, and #SOL rose 190%, indicating the arrival of a new rotation cycle in the cryptocurrency space.

Currently, nearly 57 coins have outperformed BTC, and BTC's market share has dropped to 60%. Besides the aforementioned coins, what other coins are worth paying attention to?

  • Mainstream altcoins: ADA, XRP, $DOT

  • Hot coins in the sector

    • DeFi sector: UNI, AAVE, $CAKE

    • Layer2 sector: ARB, OP, $POL

    • Meme sector: DOGE, PEPE, $BONK

    • RWA sector: XLM, LINK, $HBAR

    • AI sector: TAO, NEAR

  • Small-cap potential coins: Market cap less than 100 million USD, highly speculative, with both potential and risk.

Brothers, which token do you think will be the next to launch? Feel free to share your insights in the comments! 👇
#山寨季來了？