Author: ignasdefi Translator: Shanoba, Jinse Finance
In the previous cycle, when ETH dropped 50% (from $4,300 to $2,150, around June 2021), I sold all my holdings.
I was exhausted from the bull market, constantly researching and working without any rest. Mentally drained, I hoped it would stop. When my portfolio dropped 50%, I thought it signaled the start of a bear market. I sold, feeling relieved.
Then ETH corrected and rallied 125% to $4,800. I missed out, but at least I made decent gains on stablecoins.
I believe we are in a similar stage now, but this time I feel much more mentally strong. So I'm firmly holding my chips, waiting for the recovery.
But what if I'm wrong, and this is actually a bear market?
Fear dominates the sentiment: Trump's tariffs, stocks at all-time highs that may crash, and Cryptocurrencies will follow. Then, you read that Warren Buffett is holding a lot of cash (maybe he knows something you don't, you think). The smart people on X post bad news, claiming this is the end.
Given this, I refuse to be overwhelmed by FUD (fear, uncertainty, and doubt) and hope to share market charts and insights for reference.
Is BTC still in a bull market?
The following dashboards from CryptoQuant are used to determine whether Bitcoin's price is overvalued (expensive) or undervalued (cheap).
MVRV Z-Score
It shows when Bitcoin is overvalued (red zone) or undervalued (green zone) based on historical trends.
Bitcoin is not in the overvalued region, but is far above the undervalued level.
There is still upside potential, but we are in the mid-cycle, not the early stage.
NUPL (Net Unrealized Profit/Loss)
NUPL measures whether the market is in a state of fear, optimism, or euphoria based on unrealized profits.
Currently in the optimism/denial phase (around 0.48), meaning most holders are in profit.
Historically, greed/euphoria (above 0.6) has signaled market tops.
Long-Term Holder SOPR (Spent Output Profit Ratio)
SOPR tracks whether long-term holders are selling at a profit or loss. Values above 1 indicate profit-taking.
Currently at 1.5, meaning long-term holders are profit-taking, but not aggressively.
Sustained selling above 1 is normal in a healthy uptrend.
CryptoQuant Profitability Index
This index combines MVRV, NUPL, and SOPR to assess the overall market valuation.
Above its 365-day moving average, confirming the bull market continuation.
Peaks above 1.0 indicate a risk of cycle top formation.
In summary: What's next?
Bitcoin is in the mid-cycle of a bull market.
Holders are profit-taking, but not yet in extreme euphoria.
Prices could still rise before becoming overvalued.
If history repeats, Bitcoin may have more upside before reaching the major cycle top. Interestingly, the chart shared by CZ on X is exactly how I feel about our next direction:
Bitcoin has been confirmed as a bull market, but we have not yet reached the levels of euphoria seen in past cycles. On-chain data suggests there is still upside potential, but some profit-taking is occurring.
Ethereum
Over the past two years, ETH has declined 70% relative to BTC. Just since December 2024, it has dropped 48%! ETH ETF inflows also do not show any bullish signs.
But is ETH now the best risk/reward opportunity in Cryptocurrencies? I shared on X that the catalysts for ETH are slowly forming:
Leadership changes at the Ethereum Foundation (EF) (Aya left, but a new executive director is pending)
Deciding to scale L1, starting with gas limits, but the mindset shift itself is important.
Pectra brought EIP-7702 (farewell approvals) and the EF's new open intent framework to improve L2 user experience.
Tired of meme coins, the community is likely to shift towards fundamentals.
The hype around MegaETH suggests 1) people still love innovative L2s, 2) successful L2s validate the modular thesis.
Base just announced reducing block time from 2 seconds to 200 milliseconds and L3 (similar to MegaETH's theory). Though I'm not a big fan of Base.
Ethereum is the best chain for asset tokenization. BlackRock is heavily promoting it.
ETH has dropped a lot.
The issue is that these changes take time: L1 scaling will take years, and improving user experience requires multiple partners to adapt (Base clearly lacks the open intent framework).
My biggest concern is that ETH may completely miss this bull market and only become a good buying opportunity in the next bear market.
However, sentiment could shift quickly. If the EF and the broader community see real signs of 1) scaling L1, 2) improving L2 modular user experience, 3) a shift in the Ethereum underdog mentality, then ETH could rebound and dominate the second half of this cycle.
Currently, SOL's market cap is 3.8x lower, provides a superior user experience, and benefits from the ever-growing Lindy effect (as long as it stays online). These factors will challenge ETH's dominance in the smart contract space.
Altcoins: What to consider?
A robust speculative index measures whether Altcoins outperform Bitcoin over multiple time frames.
Currently at a relatively low level (around 0.0-0.2), meaning BTC outperforms most Altcoins.
Historically, Altcoin rallies have occurred after periods of low speculative activity.
This is similar to the Crypto Breadth chart shared by Aylo on X, which suggests Altcoins have bottomed, and we can expect a rebound (if BTC remains stable).
The question is: What Altcoins should I buy? I have a few criteria:
No large unlocks in the short term.
Product-market fit (PMF).
Yield farming (token buybacks) is a big advantage.
The one I'm most bullish on is FLUID. This lending protocol with just a few months of history is constantly challenging Uniswap in DEX trading volume. FLUID has already announced an upcoming buyback plan.
Other Altcoins that look good:
ENA: Survived the Bybit hack and multiple liquidation waves. Recent $100 million raise at $0.4... More and more protocols/CEXs implementing sUSDe, which makes me very bullish. Downside? Large ENA unlocks.
$SKY (formerly $MKR): Taiki's post is great.
• $30 million monthly buybacks (about 1.9% of supply)
• USDS (formerly DAI) supply near all-time highs
• SPK mining = more demand and revenue
• Stablecoin regulation could be a tailwind$KMNO: Dominates the SOL lending market with $1.8 billion TVL, while MC is only $85 million. Downside? Solana chain users are traders, not yield farmers. But this could change anytime.
Sonic's $S: Rapidly evolving DeFi ecosystem (Aave and other key protocols deploying), 200 million S airdrop, great user experience, growing mindshare on X, no large unlocks...
HYPE: Lots of talk on X about great token economics and a strong community
PENDLE: When fundamentals matter and investors seek yield, Pendle is the best choice
AAVE: Undergoing token economic changes as Aave 3.3 upgrade and strong revenue
What am I missing?
Also, I'm excited about the upcoming token airdrops of MegaETH, Monad, Farcaster, Eclipse, Initia, Linea, and Polymarket.
Macro, macro, macro
I truly believe in the digital gold narrative of Bitcoin. Due to its self-custody and transferability features, I prefer Bitcoin over gold.
The current macroeconomic environment is the best testing ground for Bitcoin. Tariffs, wars, fiscal deficits, money printing... you name it.
In my 2025 Crypto Truths and Lies blog post, I shared BlackRock's research that Bitcoin sometimes sells off at the start of major macro events. However, the potential for chaos, turmoil, and money printing is bullish for BTC.
I believe this is exactly what's happening now. Trump's sudden decision to deviate from the established world order has caused panic in the markets. However, people will soon adapt to these new global realities.
Nothing truly changing in the world can disrupt cryptocurrencies. In fact, the opposite is true. Day by day, we see the U.S. Securities and Exchange Commission (SEC) taking bullish actions - dropping lawsuits, introducing new crypto legislation, and the government's overall positive stance on cryptocurrencies.
But Ansem is right, when good news fails to drive prices higher, that's bearish. The market needs some time to adjust.
However, I hope the market can self-correct faster than his bullish 2026/27 prediction. If Raoul Pal's chart and insights are correct, BTC price should catch up to global M2 supply faster than 2026.
I remain bullish, and I believe patience will be rewarded.
