Compiled by: TechFlow
Introduction
The "Spring Massacre" has finally passed, and the market flash crash on February 3rd caught many off guard, with account balances plummeting, even leaving some veteran traders stunned. What exactly happened? What should be done next?
TechFlow has compiled two reflections from crypto KOLs that may help you clear your thoughts.
The first article shares how a trader precisely timed the top and locked in profits through an aggressive profit-taking strategy. He also mentions that the market may enter a volatile sideways phase, with more opportunities coming from short-term fluctuations.
The second article analyzes the underlying logic of this market movement from a macro perspective, pointing out the withdrawal of catalysts and the bearish sentiment in the altcoin market as key factors. Bitcoin is increasingly behaving like a macro risk asset, while altcoins are trapped in a dilemma of capital scarcity and lack of confidence.
The full content is as follows.
1. A Wise Move After Reaching New Highs: Step Away from the Market, Hold and Observe
Source: @Gold_Cryptoz
Unless there are some major macroeconomic events, I believe the market may enter a calm sideways trading range in the near future, as all the key events in the first quarter have been settled.
My focus going forward includes:
Trading opportunities at the top and bottom of the range
Market volatility driven by macro news
Some small on-chain investments to satisfy my investment interests
Leaning more towards short positions
Apart from that, I plan to step away from the market for a while, but still maintain some level of attention.
As always, there is room for improvement in investing, and it is difficult to precisely buy at the lowest point or sell at the highest point (it's easy to analyze each trade in hindsight). Overall, however, I am satisfied with how I have navigated this market movement.
My investment portfolio value is now far beyond its historical high, and I plan to maintain this state. I will not over-trade at this stage. In fact, my ability to achieve these results is entirely due to my aggressive profit-taking strategy, withdrawing funds from the market without reinvesting.
As for successfully avoiding the market crash, it was largely a matter of luck. The night before, I had a small position in long fartcoin, XRP, and SOL. When I woke up the next morning, the market had just experienced a price correction. Although my judgment was correct, the timing was slightly off. If I had been awake and seen the price correction, I might have panicked and closed the positions. But in reality, I was very excited, immediately opened my computer, and added to these positions that same morning. Eventually, I closed the positions that night and made a profit of about $200,000.
Now I have completely liquidated, and all my funds have been converted to USDT.
2. Some Thoughts on This Market Movement
Source: @bh359
In simple terms, I believe this market movement is mainly influenced by two factors:
The withdrawal of catalysts has caused cryptocurrencies to behave more like macro risk assets
The widespread bearish sentiment in the altcoin market
Withdrawal of Catalysts
Over the past two years, the crypto market has been driven by various catalysts. For example, the market liquidity support provided by BTFP, Blackrock's ETF application, interest rate cuts, the possibility of ETF approvals, Trump's support for cryptocurrencies and the increased likelihood of his election, the potential of a Trump victory, and the potential for an SBR, etc.
But this is the first time in a long while that, after the presidential inauguration and the disappointing SBR outcome, the market seems to lack a clear narrative to drive sentiment. Although there are still some potential catalysts in the market, they mostly lack a clear timeline. In this context, Bitcoin (BTC) is behaving more like a macro risk asset, while the risks of altcoins are higher.
Bearish Sentiment on Altcoins
Throughout the cycle, we have often heard calls for an "altcoin season", usually based on the typical four-year cycle theory. Many traders have realized that, for various reasons, we are unlikely to see a true, comprehensive altcoin season. For example, the Federal Reserve's reduced liquidity and the lack of clear catalysts in the short term, the significant increase in the number of new token issuances leading to market inflation, and the lack of signs of capital inflows into the altcoin market - as evidenced by the constant sector rotation within the industry.
Nevertheless, many still hold hope that some factors will change, and that the 2021 boom could be repeated in 2025.
However, after 2-3 years of waiting, as we approach the typical altcoin season in the four-year cycle, altcoins have started to significantly underperform BTC, while their fundamentals have also deteriorated.
For some investors, the emergence of this bearish sentiment is understandable. If they have mainly held underperforming assets over the past 2-3 years, without participating in sector rotation, or have become increasingly pessimistic about the entire industry, this sentiment may be further amplified.
Behind this market movement, the bearish sentiment in the altcoin market has been further amplified by the combined effect of multiple factors. Especially when BTC faced broader market risk-off selling, this sentiment quickly spread, leading to a larger-scale chain reaction.
However, these are now past events. Currently, I do not have a particularly clear view on the market's next direction.
Going forward, I will continue to monitor macroeconomic dynamics (such as Trump's handling of tariff issues, market reactions, and the Federal Reserve's relevant statements), as well as any potential cryptocurrency-related catalysts (such as new ETF dynamics, unexpected SBR developments, or other breaking news) to gradually form my own perspective.
Based on my basic assumptions, the market may see strong enough catalysts later this year to drive a market rebound (even if it's just a temporary rally). However, I cannot yet determine the specific timing. Additionally, depending on the type of catalyst that ultimately drives the market recovery, further declines before the improvement cannot be ruled out.
These are just my personal thoughts. I hope those who have suffered the most in this market movement can recover quickly, and that those who have seized the opportunity can feel a sense of relief. I still have some long positions opened last night, but my stablecoin holdings are the highest throughout the cycle.
