The market has not been doing very well these days, so the emotions of some of our friends seem to be fluctuating more. In the previous article (February 1st), we simply compared ETH and SOL, and the result was that we stirred up a hornet's nest again, receiving more than 10 messages full of linguistic artistry. The first message with profanity was posted about 1 minute after the article was published, which is strange, as a 3,200-word article would normally take about 7 minutes to read, but it received an artistic message in less than 1 minute.
I remember when I first started the public account, I would sometimes reply kindly to such messages and ask the other party about their situation, such as what part of the article's views they had opinions or suggestions on, or what difficulties or problems they encountered. However, over the past two years, I have gradually become accustomed to and open-minded about such messages. After all, who can't have a few haters when you're out there? Sometimes I really need to show some altruistic feelings and respect the destiny of others.
Even if I want to be honest and sincere, it is still impossible to make everyone like me. Therefore, I only need to do my best and stick to my original intention. This world is divided into black and white, and no one can change this pattern. Most people can only choose to either do well in the white area or do well in the black area, and only a few outstanding people can do well in both black and white. There may also be some exceptions, but most of these exceptions will eventually be mediocre or have no good results.
In this world, some people are after money, and some are not. Those who are not after money are mostly those who are already not short of money, but they will pursue higher-level things, such as being able to have a say (such as running for governor, president, or standing with the president).
Of course, there are things that money can't buy, and they will always exist. Some people don't care whether others can see that they are rich, nor do they care whether others can't see that they are rich. They just want to do what they like at will. The end of prosperity is desolation, and many people and things will exist without our notice. If we are greedy, we will be disappointed.
1. Has the bull market collapsed?
Last night (February 2nd), some friends in the group were discussing, and one of them said: I found that many KOLs have already announced that the market has entered a bear market!
I also chimed in and said:
Just go at your own pace. KOLs can announce bear markets and bull markets, and they can also announce the ownership of the moon and the sun, but these are just the personal views of different people. KOLs will operate accordingly based on their own views, which is their freedom, but each person's position cost and risk preference are different, so it is not very suitable to directly adopt or copy them. We only need to extract their thinking and methods, and then see which ones can be combined with our own strategies.
2. Has the Altcoin season come? Passed? Not yet?
Then the conversation turned to the Altcoin season, and several representative views were:
- There is no more Altcoin season
- The current Altcoin season should be more than half over
- This round of Altcoin season is different from the Altcoin season that everyone imagined before, the imagined scene of all coins rising together, as long as you have coins, they can rise, but in fact, only one or two tracks have attracted 80% of the funds and attention.
- Those who have caught 20 times or more are considered to have the ability to select coins, and those who have caught 5 times or more are also considered to have the ability to select coins.
Regarding the topic of Altcoin season, we can further supplement some data-level thinking here:
Taking the Solana chain as an example, there are currently a total of 28,599,095 token contracts deployed on the chain. As shown in the figure below.
Among them, there are about 9,048,663 tokens that can be traded through DEX. As shown in the figure below.
Then let's make an assumption here:
Assuming that the market value of each token is $200,000 (a relatively conservative assumption), then the total market value of Altcoins on the Solana chain alone is 9,048,663 × $200,000 = $1.81 trillion.
Continuing the same assumption, the market value on the Ethereum chain is $83.774 billion, the BSC is $358.21 billion, and the Base is $256.607 billion... If we further add up the dozens of more common chains (assuming 13.4 million tokens), the total would be $2.69 trillion.
While the TOTAL2 data on TradingView is currently $1.21 trillion (TOTAL2 statistics are the total market value of Altcoins on mainstream platforms such as CoinMarketCap, CoinGecko, TradingView, and the like), based on the above assumptions, we can draw a simple conclusion:
- The total market value of Altcoins this round may be much larger than we imagined, because TOTAL2 may not be able to account for the market value of some assets on the chain.
- The massive number of projects born in this cycle has diluted liquidity. If the same liquidity had appeared in the previous bull market, it would have been enough for all Altcoins to collectively rise several times, but this cycle is destined to have only a few Altcoins with decent gains. If there is no fundamental change in macro liquidity, then even if the so-called Altcoin season is coming or we are currently experiencing the Altcoin season, the perception will be very different.
I remember that a few days ago, an analyst had released a statistic that predicted that the number of cryptocurrencies by the end of this year is estimated to exceed 100 million. If that's the case, then the appearance of the Altcoin season may be even harder to perceive, and perhaps when you see that someone's position has doubled or tripled in a short period of time, it may mean that the Altcoin season has already passed.
In short, I still believe there will be an Altcoin season, but this Altcoin season may be completely different from the historical "all coins rising together" Altcoin season.
3. Is Ethereum hopeless?
While the group members were discussing the Altcoin season, another member threw out a question: How high can ETH rise this round at most?
Different people may have different answers to this question. Then I casually said:
- Optimistically, 3800-4100-4800-5300, and then reach around 6000 in May.
- Pessimistically, I can't say for sure.
Since this was a private group chat, my remarks were relatively casual, so I need to remind you here that the numbers mentioned above are just my random guesses, not operational advice. Short-term market trends are unpredictable, and no one can accurately predict them.
Whether you remain optimistic or pessimistic depends on your own position and risk preference. As for me, I remain optimistic (maybe my optimism is wrong, but it won't have too much impact on my position).
4. The market has dropped again!
The more pessimistic event happened that night. Last night (February 2nd), the overall market fell significantly, with BTC dropping from $101,000 to around $96,000, and ETH even breaking through the $2,800 support level and dropping to around $2,750, while the declines of other Altcoins were even greater, with many exceeding 20%. As shown in the figure below.
With yesterday's drop, the TOTAL2 market value has also directly dropped by about $130 billion. According to on-chain data, in the past 24 hours, a total of 454,783 people were liquidated, with a total liquidation amount of $1.184 billion, as shown in the figure below.
The decline is indeed quite large, but this kind of decline is relatively indifferent to me, as I have experienced even larger declines in recent years.
With the market downturn, we should see a lot of new bearish news coming out last night and today, and many KOLs will also come out and say: See, I told you the bear market was coming, but you didn't listen, I've already accurately escaped the top.
As for the reason for the decline, I saw some analysts' summary, attributing this market decline mainly to the impact of the US's new tariff policy (Beijing time February 2, the US government announced a 25% tariff on imports from Canada and Mexico, and an additional 10% tariff on all imports from China, and the US also said that if the US tariffs are retaliated, the US may further increase the tariffs).
Yesterday was also the fifth day of the lunar new year, and many people were "welcoming the God of Wealth", but the sudden decline seems to have frightened many people, and I found that some partners have already sold out or cleared their positions due to panic. However, there are also partners who have bravely added some positions, and some partners who have said calmly: The decline is not enough, I have no desire to add positions. You see, this is how different people have different risk preferences.
As for what you should do, I don't know, I can't give you specific advice, but I myself always maintain an optimistic attitude. Still the sentence we mentioned earlier: Each person's cost basis and risk preference are different, and the views and practices of others are not very suitable for direct adoption or copying, we just need to extract their thinking, logic and methods, and then see which ones can be combined with our own strategy.
In other words, if you think the bull market has collapsed, then you can clear your positions or short directly. And if you think the bull will continue to run, then we still stick to the views in the previous article:
- For those who have been dollar-cost averaging during the bear market, you can continue to maintain your own pace and plan to sell in batches this year, and ignore the short-term fluctuations in the market.
- If you like to do swing trading, you can still add positions at low prices based on your own indicators, and make good profit-taking/stop-loss plans.
Here's a corresponding example (using myself as an example):
I am a dollar-cost averaging investor from the bear market, so I will continue to operate according to the existing rhythm, and I am not too concerned about the short-term fluctuations in the market, which I have shared in previous articles and groups. So far, I have only taken out 1/10 of my position, as shown in the figure below.
If I were to do swing trading (because I don't do it, so this is a hypothetical), during the decline last night, I might consider placing a buy order for BTC at 96,500 and ETH at 2,800. But since this is swing trading, I will strictly set stop-loss and take-profit levels. Considering that BTC has entered a small downward channel since around January 20, if it continues to break below 92,800, I will consider selling to stop the loss, but if I'm more optimistic (higher risk appetite), I'll wait until it breaks below 87,000 to stop the loss. ETH is similar, if it continues to break below 2,600, I will consider selling to stop the loss. Of course, since this is swing trading, I won't be able to use too much position to operate, this time I will only use up to 0.2 of my total position (corresponding to my B-level position allocation). As shown in the figure below.
The reason I give this example is still to express the previous point:
Whether the bull market is still ongoing or not, these are all relative. If your average holding cost of BTC is 20,000 (or your average holding cost of ETH is 1,000), then it is still a bull market for you, and we just need to continue to execute our existing strategy and trading discipline.
But if your average holding cost of BTC is 100,000 (or your average holding cost of ETH is 3,000), then you should make corresponding plans (in plain language, both profit and loss plans) based on your position situation and combined with your personal risk preference, and should not blindly follow the personal opinions of those KOLs or bloggers (including this article) to trade, as most self-media bloggers may be considering traffic issues rather than unconditionally making you rich.
In this field, the prerequisite to make money is not to ignore the environment and the market, but to always learn to find the reasons from yourself and constantly optimize yourself (including your knowledge, your strategy, your mentality, etc.).
