This article provides a detailed interpretation of why the much-anticipated altcoin season has not yet arrived.
History
1. Before the Bitcoin ETF launch, the cryptocurrency market was always mired in regulatory controversies, remaining uncertain, with frequent exit scams.
2. In November 2021, when the BTC price reached a peak of 74000, it experienced a pullback. After a year of pullback, it successfully bottomed out in November 2022, with the BTC price at 15000.
3. Looking back at the time before 2021, every round of BTC's rise would lead altcoins to soar, with increases of 10 times, 20 times, or 50 times being common. So why has this round of rise resulted in altcoins not rising but instead falling?
4. History represents a stage of market immaturity, where exchanges open at will, exchanges can cut the network and pull wires, and concept coins—do you remember?
5. It is very convenient for exchanges to list new coins; you can easily package a coin, and issuing it is also very easy. In a market lacking regulation, cutting retail investors is done arbitrarily, harvesting one batch after another, with no end in sight.
6. However, in the capital market, the most important thing is incremental funds. The time before the U.S. interest rate hike cycle in 2021 was characterized by crazy unlimited QE. What does this mean? It means providing almost unlimited funds to the market to stabilize the economy. This became an important driving force for the previous bull market, combined with an immature market and ignorant retail investors making money in altcoins. Thus, many myths have emerged about altcoins in the entire market. Naturally, many people have fantasies about altcoins, believing they are the next myth. This round began operations on altcoins after BTC started, with some trading at the peak, some at mid-points, and none at the bottom.
7. Currently, the Federal Reserve's policy is still in the phase of reducing its balance sheet, which is the phase of tightening liquidity. Although we are at the beginning of the interest rate cut cycle, liquidity in the market has not yet begun to be released. (I believe this point is particularly important)
Current Situation
1. After the ETF approval, BTC took only 2 months to reach the previous high of 75000, and after 7 months of horizontal consolidation, it broke out following the U.S. election and Trump's rise to power, continuing until now.
2. Institutions represented by BlackRock have been buying non-stop, whether it's the chips that Grayscale has discarded or other chips, all of them are being consumed.
Looking back at the massive volume at the 15000 bottom, is the capital here from the 'smart people' before the ETF launch?
3. In the current cycle of this rise, every major node and stage has not been generated by small fund participation: the bottoming process at 15000, the 45000 after the ETF approval, the 7-month horizontal consolidation phase, and the breakout phase after Trump was elected. Why? Because the U.S. is still in the process of reducing its balance sheet. During this tightening phase, BTC's independent rise is a consistent choice of funding, with some institutions locking in profits and others entering to buy. Overall, there are fewer sellers and more buyers. There are more long-term traders and fewer short-term traders.
4. ETFs are a milestone because they solve the issue of legalization, and they also address the funds' safety concerns that all investors care about. If you have 200U and buy a '土狗', at worst you lose 200U, but if it takes off, a bicycle can turn into a motorcycle. So '土狗' is the market for retail investors, not for big funds. You may not care about safety, but large funds do. Therefore, the consistency of funding has chosen BTC.
5. The BTC price has no pressure above, and all chips are profit-taking. With the ETF approval, Trump being close to cryptocurrencies, Bitcoin ETF options going live, and the Federal Reserve's interest rate cut cycle opening, in such a situation where every foreseeable economic tool is favorable, why would institutions discard their chips? Do not approach the market with your own thinking; it's not ignorance, it's just not enough.
6. Therefore, I believe that before new incremental funds enter, that is, before QE, the altcoin season will not arrive. Don't fantasize; even the second brother ETH couldn't break its previous high, which better illustrates the current market's funding consistency.
7. However, don’t be too pessimistic, as everything has started to rise; it's just that the rise is not as fast as BTC, or perhaps you haven’t broken even yet because you were at a mid-point before.
8. The market changes rapidly, and we are all just dust, so trade within your understanding. There's no need to panic or feel anxious. The hardest times are already behind us; the future only requires time and your available funds.
