Source: Talking about Li and other things
This week, Bitcoin continued to break through historical highs, reaching as high as $93,000. It seems that it is not far from the $100,000 mark that many people are looking forward to. But I guess a question many people are facing now is: Is it too late to enter the market now? Should I also rush in now that the Memes sentiment is high? Do I still have a chance with the large number of altcoins I have?
Remember in the previous article of Hualihuawai, we also mentioned that only when Bitcoin breaks through the previous high (the high point in March this year was around 73,000 US dollars) can a new round of bull market be ushered in. Bitcoin is the weather vane of the overall market of the crypto market. Although not everyone holds Bitcoin, I believe that many people should know that the continuous new highs of Bitcoin often mean that the bull market has officially started.
With the official opening of the bull market, Bitcoin has skyrocketed wildly. As a result, more and more media have begun to report on Bitcoin and cryptocurrency, and more and more new retail investors have begun to pay attention to and join this field. Recently, I have been paying attention to the ranking of Coinbase in the App Store and found that the ranking of this app has risen very quickly. In just one week, the ranking (US region) has risen from 360th to the current 13th. As shown in the figure below.
Here we can briefly review the history of Coinbase rankings:
On November 25, 2020, Coinbase ranked 73rd among all APP downloads (the BTC price was around US$18,000 at the time). On April 16, 2021, the ranking rose to 2nd (the BTC price reached around US$64,000 at the time), and then rose to 1st again on October 28, 2021 (after experiencing the plunge in the 519 incident that year, the BTC price rose again to around US$64,000).
On November 4, 2024, Coinbase ranked 475th among all APP downloads. By November 15, 2024, this ranking rose to 13th.
As for the use of this data, it has actually been introduced and shared in previous articles by Huali Huawai. To be specific, you can compare the Bitcoin price trends corresponding to the above dates as an auxiliary reference.
In addition, we can also find through the search trends of Goolge Trends that as a large number of mainstream media have begun to report on Bitcoin, retail investors' attention to this field has returned to a relatively high level in the first quarter of 2024, as shown in the figure below.
Through the above picture, we can also briefly review the corresponding history:
In May 2021, the search index for Bitcoin soared, mainly due to the 519 incident, which attracted widespread attention to cryptocurrencies.
In June 2022, Bitcoin's search index also reached its peak at the time, because with the collapse of LUNA and UST, a series of chain reactions occurred, such as the successive closures or bankruptcies of 3AC (the largest venture capital institution in the crypto market at the time), Celsius, FTX Exchange, etc., which also attracted widespread attention at the time.
In fact, it is not difficult to see from people's attention that most ordinary retail investors pay attention to (or re-pay attention to) the crypto field through extensive coverage by mainstream media. One situation is that a major event happened in the crypto market and attracted much attention, and the other is that Bitcoin once again created history and attracted much attention after going through a new cycle. Judging from the current situation, people's attention is more likely due to the fact that the price of Bitcoin continues to break historical records.
Of course, in addition to using the Coinbase ranking changes and Goolge Trends data trends mentioned above as an auxiliary reference for market sentiment, there are actually many reference dimensions or reference indicators for the market conditions or sentiment of the crypto market. Different people may focus on different points, so just find the reference indicators that suit you for assistance.
In summary, based on some current signs, it seems that the peak of Bitcoin is about to come. So, is it too late to enter the market now? Let’s continue to discuss:
1. Bitcoin has not yet shown a peak signal
I don’t know how many friends still remember that in previous articles of Hualihuawai, we have shared more than a dozen long-term data indicators of Bitcoin, such as MVRV Z-Score, NUPL, The Puell Multiple, Pi Cycle Top Indicator, Rainbow Chart, 2-Year MA Multiplier, 200 Week Moving Average Heatmap, The Golden Ratio Multiplier, RHODL, AASI, AHR999 and so on.
Friends who are interested in the above indicators can search and review the corresponding historical articles of Huali Huawai, as shown in the figure below.
In addition, we can actually make auxiliary judgments through data from many different angles, such as:
- Regarding BTC ETF. Although the ETF has seen an outflow of more than $400 million since yesterday (November 14), this outflow is not large compared to the inflow in the past few days. Please continue to observe and pay attention to the changes in this data. As shown in the figure below.
- BTC Funding Rate. BTC Funding Rate has been at a relatively low level since it broke through $800 million. This seems to indicate that people’s demand for BTC purchases has not really reached the high point of sentiment. Usually, the end of a bull market is often accompanied by Perps. As shown in the figure below.
Of course, data indicators sometimes have a certain lag. When we trade, we must not wait for any peak signal, but should perform operations in combination with our own risk preferences and position management plans. Just like I cannot guarantee that I can always buy at the lowest point, so I use the fixed investment method to hoard Bitcoin. Similarly, I cannot guarantee that I can accurately sell at the highest position in the bull market, so as I said in the previous article of Huali Huawai, I will set myself the first profit stop target and batch selling plan, among which the first profit stop target is only a theoretical derivation, and the batch selling target will be determined in combination with the current market trend, but if the market trend still looks upward after reaching the batch selling target, I will also consider strictly following the trading discipline to implement the batch reduction operation.
2. Altcoins haven’t performed very well yet
Currently, ETH and some blue chip altcoins have not reached ATH. Even SOL, which is very popular in this cycle, is still 14% away from ATH. As for ETH, it is even worse, with a distance of 31% from ATH.
At this stage, apart from BTC, almost everyone's attention is focused on various MemeCoins, but I personally still belong to the traditional school. Compared with the current popularity of various MemeCoins, I am still more optimistic about the development of ETH. I believe that ETH will definitely break through ATH, and if we wait until that day, then what may follow may be the rotation opportunities of some altcoin sectors.
From historical experience, once BTC rises to a certain level and stabilizes, some altcoins will definitely have new opportunities for growth, because the underlying investment logic remains unchanged, that is, investors will always chase things with greater growth potential.
Judging from the current situation, according to the expectations (guesses) in the previous article by Huali Huawai, BTC may still have 30%-70% upside in this bull market cycle, but in terms of altcoins, this upside potential is theoretically much greater. However, the biggest difference between the current and previous historical cycles is that the number of newly born projects in this cycle is seriously overloaded, and the development of MemeCoin seems to have completely occupied most people's attention, which I think is not a good thing for the healthy development of altcoins and even the entire crypto industry.
3. When will the altcoin market come?
Above we mentioned several factors that affect the arrival of the altcoin market: ETH has not yet broken through the ATH, the number of projects is seriously overloaded, and MemeCoin has attracted most of people's attention.
So, if we speculate theoretically, when will the altcoin market come?
At present, our expectation is that we have to wait for Bitcoin to stabilize first, whether BTC directly breaks through $100,000 or $150,000. Only after BTC stabilizes, the altcoin market can start. During this process, it is estimated that MemeCoin will still be the performance stage, and various stories of getting rich overnight may become popular and spread, attracting more and more retail investors to pay attention to and join this field.
In the previous article of Hualihuawai, we optimistically estimated that the current cycle of altcoins may occur in the first quarter of 2025. The perspective of this time is mainly based on the underlying problem of market liquidity, because the Federal Reserve has been shrinking its balance sheet since mid-2022. This operation of the Federal Reserve is actually bearish for alternative assets (such as crypto assets).
That is to say, unless the Federal Reserve sends a signal to stop QT (Quantitative Tightening), we believe that the altcoin market (the so-called Altseason) cannot be launched on a large scale.
The possible good news is that the Federal Reserve is likely to signal the end of QT at the FOMC meeting next month (December), which may mark the beginning of the Altseason. Therefore, we optimistically expected that the Altseason market may arrive in the first quarter of next year (2025).
Of course, the above are all our subjective speculations and are not used as any investment reference. But if our speculation is true, then now is still one of the best times for you to choose altcoins. Just pay more attention to the top projects in the popular tracks.
In short, considering the current situation, the crypto market has not yet reached the peak of this bull market cycle. At this stage, it is more like the main force/dealer is trying to attract the leeks to rush into the market, and it is a stage where the leeks are cultivating the belief that they can make money (by coming to the crypto market). Through a large number of mainstream media reports and discussions among people around them, people seem to have begun to realize that they should participate in cryptocurrencies. From a more macro perspective, there is still the expectation of continued interest rate cuts by the Federal Reserve next year, and some possible measures that Trump will take on the crypto market after he officially takes office next year. It is estimated that some traditional institutions and large funds are now waiting or making deployments.
Anyway, since we insisted on regular investment in 2022, we have once again endured too much loneliness and volatility. Now we have finally waited for the expected bull market. We need to be a little more patient, and then wait until the market completely enters the FOMO and bubble state, and then we can exit according to the established plan.
Bull markets are often the best opportunity to make money, because the market is upward most of the time during this period, but bull markets do not always rise continuously. We may still face some pullbacks, for example, even a correction of more than 30% cannot be ruled out in the future, but don't be afraid, the more you need to stay calm at this time, please continue to strictly control your positions, just focus on your goals, and strictly abide by your trading discipline. The late stage of a bull market is often the most dangerous stage for most retail investors, and many people end up losing money at this stage. At the same time, you should try to avoid leverage operations, and don't touch them if you don't understand them. I wish you all good luck.
