The world is bustling, all for profit; the world is bustling, all for profit! Hello everyone, I am your friend Lao Cui, focusing on digital currency market analysis, striving to convey the most valuable market information to the vast number of cryptocurrency enthusiasts. I welcome everyone's attention and likes, and I refuse any market smoke screens!
The market has indeed fallen below the 100,000 mark, which can be considered a part of this round's trend. Today, let's reanalyze the market trend. First, I want to address the questions many have about entering and exiting USDT. Many friends feel that cash transactions are more reasonable. I want to remind everyone that currently, domestic relevant departments will define cash transactions differently if they are discovered. From my perspective, this path is still very dangerous. Try to avoid trading in cash. Most OTC merchants in the country have some issues with their clientele. Our trading activities are almost negligible compared to their dealings. Once you get involved in their transactions, it may not just be a simple freeze. At best, it might only be considered money laundering, but if you encounter illegal transactions abroad, the penalties could be extremely severe. This is the same for Hong Kong; our strategy is strict entry and lenient exit (for Hong Kong). If you want to flow into the domestic market, the legal route is the same as trading US stocks, which requires paying some fees.
Since yesterday's article mentioned the growth of cryptocurrency concept stocks, many friends have raised questions. They wonder why the concept stocks are growing while the crypto market is not rising. I will explain the difference between cryptocurrency concepts and the crypto market, as well as the future trends of the crypto market. This starts with Bitcoin. Initially, when blockchain technology was born, no one was optimistic about this market. Although the technology was innovative, there were no practical measures at the time, which led to the blockchain market being unable to achieve real-world applications. For practitioners, without basic life security, this market was essentially declared over. Therefore, while improving blockchain technology, Bitcoin was rewarded; as long as you completed a phase of calculations, you would receive a proportional share. This is also why new technologies later emerged, corresponding to new cryptocurrencies being rewarded to support the application of blockchain technology.
Thus, many cryptocurrencies rely on blockchain for survival; the two are inseparable, after all, no one gets up early without profit. This also leads to the emergence of new concepts, which generally brings new cryptocurrencies to everyone; cryptocurrencies are merely a means of financing. The methods in the crypto market differ from those in the stock market. In the stock market, financing pricing at least has regulatory agencies and review mechanisms, allowing for some bargaining power over a stock. Due to the uniqueness of the crypto market, it primarily revolves around speculation on concepts, and whether these can be realized in the future remains uncertain. Therefore, pricing issues cannot be resolved, leading to frequent price fluctuations that far exceed those in the stock market. The commonality between the two is that they are both in a financing stage; this is also true for the current stock market. Anyone who has been involved in the stock market knows that even with tangible implementations, pricing issues are often very opaque. The concept stocks in the cryptocurrency sector integrate the existing market value of the crypto market and future concepts, meaning they focus not on the present but on the future, which also includes the promotion of stablecoins. This recent rise has been almost entirely driven by stablecoins.
Among the entire cryptocurrency concept sector, the company with the strongest growth is SRM. When this company is mentioned, everyone knows it well. It is also a fermentation of public opinion and politics, with Trump's son dancing with Sun Yuchen, making the growth quite reasonable. This includes game companies in the metaverse, cryptocurrency trading platforms, and parent companies of cryptocurrency issuers, covering almost the entire related industry of the crypto market. Therefore, when viewing the stock market, one cannot simply measure it from the perspective of the crypto market. These two markets fundamentally lack interconnectivity; the crypto market is independent of its plans, and users trading US stocks do not look down on the market value of the crypto market. In fact, to some extent, these two may even form a competitive relationship. However, from a future perspective, the combined market of cryptocurrency and the metaverse will certainly far exceed the current market value of the crypto market. In the future, there may not be Bitcoin, but there will definitely be applications of blockchain technology.
Returning to the trend, the current movements in the crypto market are almost consistent with our previous estimates. Those who read Lao Cui's articles can clearly see that the 98,000 retracement depth was already mentioned last week, which can be considered a clearing of a wave of long assets. The upcoming trend may be influenced by the oil market. The original contradiction behind this wave of capital withdrawal is based on the Israel-Palestine conflict, with international capital reassessing the energy market. Russia and Iran together account for about 12% and 5% of global exports, respectively. Together, they account for nearly 17% of total exports, and both are parties being sanctioned. International capital's concerns about the energy market may lead to inflation in the US exceeding 5%, and there are no short-term plans for interest rate cuts, making capital withdrawal reasonable. This concern is not unfounded; if the Strait of Hormuz is blocked, the impact on us will be significant. About 70% of our imported oil passes through this strait, and the increase in costs will not only affect the US. Under this accumulation of negative factors, the crypto market faces enormous challenges in short-term capital preparation, and the next wave of decline may not see the 98,000 position as the endpoint.
Let me clarify one point: the transition from an upward range to a downward channel is not instantaneous. Whether it is Bitcoin or Ethereum, the bearish trend does not start all at once. The opening of the downward space will last at least half a month. Currently, Bitcoin's support level is at the 101,000 mark, while Ethereum is at the 2,100 mark. Only when these levels are broken will it indicate that the next wave of bearish territory is approaching. Therefore, one should never think about entering the market at absolute highs. Many people think that if they could enter at the 69,000 position, they could perfectly harvest from the last bear market. How could the market makers give everyone that opportunity? In the last bull market, being able to take a short position at the 110,000 level was already quite good. A bull market for Bitcoin can yield tens of thousands of points, making it almost the leader in the crypto market, while Ethereum has a 500-point gain, surpassing 80% of users. The decline will not be like last year's growth, where fluctuations could reach tens of thousands of points overnight, without any depth of retracement, just continuous growth. In the overall decline, there will also be people stepping in to support the market. The platforms and market makers understand this better than we do. Do not think about absolute lows; achieving profits on current short positions is also a good exit, and you can wait to re-enter when the next wave breaks the levels again!
Lao Cui's summary: The market attention in the crypto sector has not been very high yesterday and today. Recently, I mentioned that shorting Pop Mart was not a spur-of-the-moment decision; I have been paying attention to this company, and I just pointed out that its stock price was at a historical peak. This time, it directly dropped by 5%, which was somewhat unexpected for me. This is not a prophecy or a joke; I have been watching this company's trend over the past few days, as this investment is indeed larger than in the crypto market. Speaking too far, congratulations to those shareholders who shorted; being able to trust Lao Cui like this is your fortune. Returning to the trend in the crypto market, it is not as complicated as everyone thinks. It still follows the previous thought process. Before interest rate cuts and external capital intervention, you can short at high positions; the likelihood of the bearish trend continuing remains high. Both Ethereum and Bitcoin are likely to create lower positions. After this round of correction ends, I will also layout short positions and will notify everyone at that time. For those who do not understand the trend and entry positions, you can directly ask Lao Cui. If you are stuck in long positions without enough assets to break even, it may be best to take advantage of this round of correction to exit. This retracement depth, barring any surprises, will not reach the lows of the first half of the year; this correction can only be seen as a trend adjustment, not the arrival of a bear market! At the end of the article, here’s a morale booster: Lao Cui's short position is still not exited; I forgot to set a take-profit, so I can only wait for the next wave of bearishness!
Original creation by WeChat Official Account: Lao Cui Talks About Coins. For assistance, feel free to contact directly.
Lao Cui's message: Investing is like playing chess; a master can see five, seven, or even more than ten moves ahead, while a novice can only see two or three moves. The master considers the overall situation and the big trend, not focusing on individual pieces or territories, aiming for the ultimate victory. The novice, however, fights for every inch, frequently switching between long and short positions, only seeking short-term gains, resulting in frequent entrapment.
This material is for learning reference only and does not constitute trading advice. Trading based on this is at your own risk!
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