In the first half of this year, many people used the Kezhou method to speculate on the trend of this bull market. Of course, they also got relatively good results in the first quarter, such as the emerging narrative of inscriptions and the popularity of MEME, as well as the rise of BTC before halving and the fall in price after halving.
Behind the bleak market
However, things took a turn for the better in April. Although the price of the coin fell after the halving, it was not serious, and many people still had expectations for the future market. However, judging from the market performance since the halving, it seems that the market trend has exceeded the cognition of most people, and the cold market has made many people begin to question whether the bull market exists.
Admittedly, from the perspective of many data, the current market situation and the sudden drop in popularity are traceable, but the current market situation is beyond the medical care of many people. Although BTC and ETH have been in a wide range of fluctuations from April to now, and sometimes there may be a rapid decline, the sharp drop in altcoins has really disappointed many people with cryptocurrencies, and this is against the background of the approval of the ETH spot ETF.
In the past few months, the founder of BitMEX publicly stated that the market would rise in May and June. At that time, many people still had illusions about the trend, but now these same people may only have regrets and annoyances left. The overall trend in June was not outstanding, and it was mainly due to the fact that a lot of retail investors' account balances were wiped out.
To summarize the emotions during this period, the main panic occurred in April and June, which is relatively rare in a bull market. At the same time, generally speaking, the longest time for a decline in a bull market is 3 months, and since mid-March, the current time for the decline has reached 3 and a half months. It is no wonder that the Gas fee of the ETH main network has been reduced to the lowest in many cases, which has also led to a significant decrease in Ethereum Gas destruction, and Ethereum has turned from deflation to inflation. During the bear market last year, the Gas fee was higher than it is now.
July is crucial
More people are placing their hopes on July, so is there any chance of an increase in July?
First of all, let's talk about the current interest rate cut topic. At the beginning of this year, everyone expected that the Federal Reserve might cut interest rates three times this year, but it has been reduced to two times. Until now, it is expected that there may be one rate cut at the end of the year. Then there may be no rate cuts this year. In other words, there is only one more time to the worst news, and the interest rate cut topic can't be much worse. Therefore, if there are no accidents later, the impact of the interest rate cut topic on cryptocurrencies will be much lower than in April.
Secondly, letâs look at the approval of the ETH spot ETF. The Federal Reserve Chairman has publicly stated that it may be approved as early as September. That is to say, a large amount of off-market funds will enter the market as early as September. Of course, the bottom positions of these funds must also be considered. That is to say, the market will have demand for the Ethereum ETF in August, and some funds may even have completed the process of reducing their positions. Therefore, this is good news for the Ethereum ETF.
The approval of Ethereum ETF can directly promote the rise of prices. At the same time, it will drive more investment teams to pay attention to the Ethereum ecosystem, including DeFi, blockchain games, NFT and other non-financial applications. Obviously, from this year, the main direction of Ethereum is still DeFi applications. This part has actually reached saturation in the market before, so it is not good for Ethereum. It is for this reason that Vitalik is very interested in Ethereum's non-financial applications, which is also the direction that needs to be focused on in the future bull market.
The third is the recovery of financial market liquidity. Many investors know that "May is poor, June is desperate, and July is a turnaround", as well as "sell in May", which means to reduce investment as much as possible in May and June every year. Of course, there are some errors here. For example, in May and June last year, the decline was relatively short. In some years, the market did not adjust until June, and the market bottomed out in August or even September. This year, the decline began in April, but it still makes sense from a general perspective. The main reason here is the lack of market liquidity funds. Generally, listed companies face the pressure of semi-annual reports in June, so there is a need to recover funds, which will lead to a shortage of market liquidity, and naturally risky assets will be sold off. Therefore, generally speaking, the possibility of a decline in May and June is relatively large.
Once July comes, this situation will be alleviated a lot, and the market liquidity will be gradually replenished, so that the market will gradually improve. In this way, July will be an important month for the recovery of the market.
Fourth, the current airdrop bubble of high-financing projects has ended. After many people have been reversed, they will look at the airdrop market more rationally. Of course, more importantly, the blood-sucking effect brought by large projects has ended, and funds will gradually return to normal, rather than a risk-averse state, which is very important for the recovery of the market. At the same time, we have also seen that there will be basically no news of airdrops or TGEs for high-financing projects in the future, so the possibility of blood-sucking in the market in a short period of time has been greatly reduced.
Summarize
Judging from the above aspects, July may be a turning point for the cryptocurrency market. Of course, on the whole, it is not yet time to reverse and rise continuously, because the main fundamentals supporting the bull market - the entry of funds brought by new technologies, that is, the entry of off-market funds into the currency circle, has not been fully achieved. DePIN and RWA still do not have the strength to lead the popularity of the encryption market. Many people even think that this round of bull market is an ETF bull market. In fact, from the current point of view, after the spot ETFs of BTC and ETH, the possibility of ETFs of other tokens being approved is relatively low.
Although many people are optimistic about Solana's ETF, it is difficult to achieve this this year. Whether the project's ETF can be approved depends not only on its prospects, but also on its market value and liquidity. It must also be decentralized rather than controlled by a small group. Of course, it must stand the test of time. In this regard, Solana's performance is obviously still insufficient, and other tokens basically have little expectation, so we still need to wait for further progress in supervision.
Generally speaking, the real bottom is often not as shown by a pin. Most of the bottom is a range, which will exist for at least 2 days, leaving sufficient time for the main force to absorb the shares. For example, looking back at the previous 94/312/519, the extreme panic caused by the decline would last for several days. From this perspective, the decline in June barely meets this threshold, but we still need to have awe of the market so that we can wait until the day when the market explodes.
