4Alpha Research Researcher: Cloris
Recently, the market has experienced a big crash. Bitcoin fell by nearly 13% in 24 hours, falling below the $53,000 mark. At the same time, the global capital market was not immune, and the US stock market, the Korean GEM, and the Japanese Nikkei index all fell sharply. Faced with such a large drop, one cant help but question whether the market has already gone into a bear market? Where are the next opportunities?
Let us listen to our top trader and industry veteran Terran’s analysis of the current crypto market and his judgment on future trends from the three dimensions of cycles, technical aspects and macro.
(The following content is based on the interview content. To watch the full content, please click the video interview link at the end of the article)
1. What stage of the cycle is our market in now? Has the bull market ended?
Terran said that he tends to observe the cyclical linkage effect between the U.S. stock market and the cryptocurrency market. However, he recently discovered that the cyclical positions of the two are not completely consistent, which has also caused him considerable confusion.
From the perspective of the US stock market, there is an 80% chance that the market is at the top, but there is also a 20% chance that the market will turn into a bubble. From the perspective of the cryptocurrency world, he is more inclined to believe that the market is in the middle of the cycle.
When asked why he chose to close his position when he thought the cryptocurrency market was still in the middle stage, Terran explained that although the cryptocurrency cycle has not yet been clarified, the impact of the U.S. stock market cannot be ignored. He finally decided to follow the U.S. stock market cycle because it has a greater influence on the cryptocurrency market.
In addition, Terran also mentioned that in the past, the trends of U.S. and Chinese stocks and the cryptocurrency market were highly correlated, but this time there was a divergence. He believes that in the case of inconsistent cycles, observing a certain market alone may lead to wrong decisions. Therefore, he prefers to use the cycle of U.S. stocks as a risk control standard and refuses to participate in all risky assets.
When talking about the psychological cycle of investors and the valuation level in more detail, Terran said that both are currently in the middle. He believes that now is a relatively junk period of time, not suitable for operations, and investors can do more to wait and see.
As for whether there are other leading indicators that can evaluate the cycle stage of BTC, Terran said he is not inclined to look for too many explanations or indicators. He emphasized that when the U.S. stock cycle is in a bad position, it is a wiser choice to focus on risk control and refuse to participate in risky assets.
2. Can the current technical pattern give us some good inspiration?
Terran pointed out that the market is currently in a clear downward trend and it is not recommended to do long operations. He emphasized that although buying at this position does not necessarily mean a loss, if the judgment is wrong, there may be huge risks.
Terran further explained that using technical indicators as a means of risk control can help investors avoid losses caused by extreme market fluctuations. He cited past market crashes as an example, pointing out that following technical signals can significantly reduce losses. He advised investors to be cautious when the market trend is not good and respond with a short-selling mindset.
When asked if there are still profit opportunities in the current market environment, Terran mentioned several possible signals: stabilization of US stocks, support for Bitcoin prices, and the overall pattern shifting from shorts to longs. However, he also emphasized that it is very difficult to predict the specific time of market reversal because market trends are extremely uncertain. He suggested that investors should respect market realities and avoid over-prediction in order to cope with possible market fluctuations.
When talking about trading strategies, Terran said that he prefers to trade on the right side, that is, to buy when the market trend is obvious. He emphasized that the choice of selling point is more complicated, and even he has not yet solved this problem perfectly. Nevertheless, his overall strategy is to seek profits under the premise of controlling losses.
Regarding the current market stage of Bitcoin, Terran believes that it is currently in the middle stage. He explained that according to his indicators and market observations, although the price of Bitcoin has risen, it has not yet reached the standard of a bull market. He believes that a true bull market requires Bitcoin to set new highs and continue to rise, accompanied by the prosperity of the entire market, but now it seems that the bull market has not really arrived yet.
In addition, Terran also expressed reservations about Ethereum. He said that he was cautious about Ethereum because he did not clearly understand the source of Ethereums revenue and did not observe signs of its large-scale application and crazy use. He emphasized that before failing to prove its value, he tended to believe that Ethereum did not have the potential to outperform the market.
3. From a macro perspective, what should be the future trend of BTC?
When asked whether Mondays stock market crash was an important reason for the BTC crash, Terran made it clear that there is indeed a close connection between BTC prices and other assets in the capital market. If BTCs short-term price trend is out of touch with other assets, then he is more inclined to believe that there is a deviation in the BTC market itself, rather than a problem with stock market pricing. In fact, the high correlation between BTC and the Nasdaq index once reached 90%, which also strongly proves that BTC is not a traditional safe-haven asset, but has significant risk asset attributes.
In terms of investment strategies to cope with this wave of plunges, Terran particularly emphasized the importance of risk control. He advocated that investors should set clear rules when formulating trading strategies, such as stopping losses in time when prices hit the cost price, to avoid irreversible losses. At the same time, low-cost buying strategies are also considered the key to success, as they provide investors with greater flexibility in volatile markets. Therefore, at the current market stage, he chose to close his position.
Looking ahead to the second half of the year, Terran is cautious about the expectation of interest rate cuts. He believes that although traders have long expected interest rate cuts, the market reaction may not be as expected when the rate cut actually occurs. However, he did not completely deny the investment opportunities in the second half of the year, pointing out that the correction of the US stock market may be short-term, and the time required for corrections at different levels is also different. Therefore, while investors remain cautious, they should also pay close attention to market dynamics in order to capture possible opportunities.
Video interview link:
YouTube: https://youtu.be/lyAVCkkwYIE?si=Bn2c 02 xNJFDvlmBC
Station B: https://www.bilibili.com/video/BV1 wsafeCEQP/?share_source=copy_webvd_source=f74d058c9c0bd5302fe29a7dc3e42420
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