Recently, the market conditions in the crypto space have been particularly difficult for most retail investors.
As the representative cryptocurrency of the market—Bitcoin continues to hit new highs, most retail-held altcoins not only fail to surge explosively but also continue to decline.
The divergence trend between Bitcoin and altcoins is becoming increasingly obvious.
So, is this round of the crypto market really just a bull market for Bitcoin? Do altcoins really have no future?
Before the significant drop in the altcoin market, I published an article on the evening of December 7, warning that the market might soon face a major pullback!
This was confirmed on December 9.
The community members also successfully avoided risks before this wave of altcoin drop.
In fact, from my perspective, the sluggishness of altcoins is not due to a lack of potential, but rather that the true explosive phase has yet to arrive.
The reason for this is still the insufficient liquidity in the Bitcoin and altcoin markets. Moreover, this round of market action is initiated by institutions.
At the same time, due to Bitcoin's increasingly important financial status, it has become more than just a financial product; it is now placed in a strategic position.
In this situation, mastering the 'pricing power' of Bitcoin becomes particularly important.
Therefore, even if Bitcoin undergoes a washout, it will not have the same intensity as altcoins. Institutions can purchase Bitcoin through on-site ETFs.
However, most altcoins are different. What is truly trapped within altcoins still comes from retail investor capital trapped in exchanges, and it is difficult for traditional institutional incremental funds to directly enter the altcoin market.
This has led to a significant decrease in the liquidity of altcoins because, for altcoins, without a large influx of incremental funds, institutions are not worried at all about the possibility of altcoins being snatched up during a crash.
Because the retail investors who are stuck are not a major concern. They are either trapped at the top or stuck in the middle of a downward trend, unable to move.
As institutions accumulate at the bottom through another round of consolidation, they can initiate a new market cycle. This will repeat.
However, altcoins will not remain this way forever. Once Bitcoin becomes deeply rooted in traditional fields, its mission will be nearly complete.
Altcoins are the cornerstone of the entire crypto market. As Bitcoin's status continues to rise, some altcoins will also unleash their true potential.
But this does not mean that all altcoins will have huge gains in the future.
Before that, the layout of altcoins should consider my judgment on the future direction of the crypto market and my vision for the layout.
At the current stage, from a personal perspective, altcoins have not lost their potential.
Instead, it is cleaning up the deeply trapped positions from the last bull market and the peak in March this year, which is the ongoing weekly pullback.
Making retail investors feel that altcoins are hopeless also achieves the true goal of altcoin traders.
Regarding the interest rate cut decision that the Federal Reserve is about to announce tonight, a 25 basis point cut has already climbed to over 96%, making it virtually a done deal.
But will the altcoin market immediately turn good after the interest rate cuts? That remains to be discussed.
Looking at the market, Bitcoin experienced a 5000-point pullback after breaking a new high last night, but most altcoins still fell without rising.
The market outlook is not optimistic. Additionally, a new batch of trapped positions has accumulated above.
After the news is announced tonight, a short-term surge in Bitcoin and altcoins is highly probable, but after hitting the upper resistance level, I will temporarily sell for a short position and observe.
Then I will wait for another buying opportunity after the favorable news is realized.
From a weekly perspective, a small number of coins reached buying positions after the last drop, such as Looks, Morpho, Core, and so on.
Both the low points and high points have over 30% gains, while Morpho doubled in six days.
The last time the altcoins plummeted, I entered a long position of 30%. After the interest rate cuts, if most altcoins drop another 10-20% from the current market level, do not panic; I believe it is actually a buying opportunity for a new round of altcoin market.
Personally, I will buy in with a 50% allocation, waiting for the second wave of altcoin market explosion.
As for the medium to long-term layout direction, it still focuses on RWA, newly emerged AI, some meme coins, and the Hong Kong sector.
The opinion is a subjective view and is for reference only!