Article source: Words Outside the Lines
With BTC recently breaking through the $100,000 mark again and ETH rising over 40% in a single week, people's emotions seem to be splitting. Some believe this is just a brief rise before a massive drop (continuing to wait for a new pullback), while others think this could be the start of a new Altcoin season (spreading the word, bulls returning).
For those who regret missing this wave of growth and are still waiting for a new pullback, the same question remains (just like previous times after each rise): If Bitcoin really does pullback next, and drops to the position you want, such as $85,000, $79,000, or even the previous low of $74,000, would you actually dare to buy?
Looking back, since this cycle began, Bitcoin has risen and fallen from around $15,000 to $100,000. In past rallies, many people waited for a pullback, confidently claiming they would buy when it happened. Yet in each subsequent drop, many continued to hesitate, forgetting their previous bold statements, and ended up watching Bitcoin reach its current position.
In fact, we should think more about the concept of time frame, not always focusing on the present or being anxious about current performance. We should try to see a more distant future and hold tokens that are likely to grow over time - this is the golden rule for reasonably becoming wealthy during a bull market cycle.
To be direct, if you already hold Bitcoin or other tokens with good growth, and have caught a nice wave of growth, consider taking partial profits in batches. If you're now looking to enter for a short-term trade, set your take-profit and stop-loss according to your risk appetite. If you want to wait for a pullback to enter, don't keep fixating on previously missed low prices; instead, choose a new target opportunity from a future time frame.
Let's return to the current market:
From a retail investor perspective, the $100,000 Bitcoin now seems completely different from the $100,000 Bitcoin at the end of 2024. Looking at the backend interaction data of the "Words Outside the Lines" public account, the current interaction volume is significantly lower, feeling entirely different from Bitcoin's price peak last year (of course, this might be due to comprehensive reasons, and "Words Outside the Lines" is just a small media platform, so single platform data may not indicate anything).
On one side, Bitcoin has theoretically continued its bull market for over a year since creating a new historical high last year (surpassing the 2021 bull market peak). Although experiencing several notable pullbacks, Bitcoin reaching over $100,000 again proves its strong demand during this bull market cycle. However, from everyone's daily comments and discussions, it seems many haven't effectively captured Bitcoin's trend. For Bitcoin, the real fear isn't being trapped, but continuously missing the pump. If you still haven't gained any results from Bitcoin's trend so far, you should seriously reconsider your past trading strategies.
On the other side, Ethereum, despite last week's significant rise, many are still on the path to breaking even. Recently, discussions about the Altcoin season have increased again because ETH's rapid rise has rekindled hope for Altcoins.
Looking at Altcoin market cap and price performance, many Altcoins have performed well in the past two weeks, with some achieving several times growth. However, based on on-chain data and indicators, we haven't truly entered a new Altcoin season. For instance, the ETH Macro Index is still below 0, currently at -1.12, as shown in the image below.
Moreover, the well-known Altcoin Season Index is currently only 27, as shown in the image below.
The possible reasons we've previously outlined for the delay in a comprehensive Altcoin season include:
- This cycle has produced a massive number of new projects (tokens), severely diluting liquidity.
- BTC's institutional demand (potential future national demand) has disrupted crypto market's historical patterns, with BTC attracting primary liquidity as a new macro asset.
- Global macroeconomic factors have prevented large-scale liquidity from flowing into the crypto market.
However, based on the current crypto market trend, it's still following past crypto cycle patterns and rules, with time being the most challenging dimension to grasp. In other words, if Bitcoin continues to oscillate in a relatively high range and Ethereum shows further performance, there's still a high probability of a new Altcoin sector rotation effect, driving some Altcoins to significant growth - a point we've previously outlined.
As for which Altcoin sectors to prioritize, considering risk, I've basically stopped publicly sharing my specific positions since last year and rarely spend time focusing on various Altcoin projects. Interested friends might want to review our January 1st article, where we provided reference narratives for potentially noteworthy areas this year, including AI, RWA, DeFi, Memecoins, as shown below.
In summary, opportunities and risks often coexist. When most people don't believe the current moment offers opportunities, consider gradually buying into targets you believe in. When most people agree a new opportunity has arrived, consider gradually selling. Try to control your emotions - the most important thing during a bull market is preserving existing profits, not continuously risking to pursue higher returns.
We mentioned global macroeconomic factors earlier, so let's discuss this further:
Since Bitcoin's spot ETF and increasing institutional participation, Bitcoin and cryptocurrencies have, in a sense, become a macro currency (or investment vehicle). Therefore, understanding and grasping macro trends will help us make better long-term investment plans.
1) Geopolitical Issues
Beyond surface-level India-Pakistan armed conflicts and Russia-Ukraine conflict, the tension between the US and China continues to pressure markets. Currently, this situation seems unlikely to be effectively resolved in the short term. Thus, global funds are primarily in risk-averse mode, with speculation secondary - meaning funds don't seem likely to directly enter high-risk asset domains.
2) Tariff Issues
The tariff issue has been ongoing for some time, and the market has had corresponding digestion and performance. Although there is news today (May 12) showing substantial progress in trade talks between China and the US in Switzerland, Trump is estimated to not end the tariff war just yet. Tariffs remain an issue that requires continued attention.
3) Inflation Issue/Federal Reserve Rate Changes
Here we mainly focus on the United States. From the current comprehensive data, the US inflation issue seems to be cooling down, and from Powell's latest speech, it seems to be relatively gentle. We also had a related review in our previous article (May 7): As the Federal Reserve's stance has begun to become increasingly moderate, this may be viewed as an early signal of liquidity returning. In the future, once the US dollar starts printing money again, it will continue to be a huge driving force for the crypto market in the medium to long term.
4) Global Liquidity Changes
Global M2 is a macro data we have been tracking, and we shared this data in our previous article (April 1), as shown in the following image.
5) US Regulations or Policies for the Crypto Industry
There might be more in this aspect, such as the actual progress of Bitcoin strategic reserve plans in various states in the US, as shown in the following image.
For example, the progress of the US stablecoin bill (Trump plans to introduce stablecoin legislation before August this year), the review progress of Ethereum ETF staking issues... As more sovereign funds and institutional funds continue to participate, and with relevant regulations for the crypto industry being introduced by countries like the US (including Europe), cryptocurrencies are gradually moving from a gray corner (wild growth) to the light (orderly growth).
In short, Bitcoin's price seems to have repositioned itself, and breaking through the historical high again appears to be just a step away. Ethereum's price has also experienced a short-term violent surge, and some Altcoins seem to be stirring. From the indicators of the K-line (such as weekly level), the stage of upward trend seems quite obvious. However, in terms of macro factors, there are still some uncertainties. Therefore, we believe that this is still Bitcoin's bull market, and short-term speculative market motivations seem more significant.
The more this time, the more we must remain rational, not be influenced by the current optimistic price sentiment, not randomly chase high and All In or go full position. We should control our position ratio, such as what percentage is allocated to BTC, what percentage to ETH, what percentage to blue-chip Altcoins (like BNB, SOL, Pendle, LINK, Aave), what percentage needs to maintain liquidity (USDC/USDT), and what percentage is hoped to be used for speculating in low liquidity or low market cap coins... These all need to be reasonably planned according to individual risk preferences.
In this field, we are only investing or speculating through tokens. Never fall deeply in love with any project to the point of being unable to extricate yourself. If you want to love, remember that you can only love Bitcoin, or only use assets you can afford to lose (funds that do not affect your real-life quality) to love and pursue projects you like and understand.
That's all for today. The sources of images/data mentioned in the text have been supplemented in the Notion. The above content is just a personal perspective and analysis, solely for learning records and communication, and does not constitute any investment advice.
Article source: https://mp.weixin.qq.com/s/jmZ0fYxEeE9JSgzEHCHk9A
