Is the bull market over?

Powell's words caused the Nasdaq market to crash 3.61%, close to the biggest drop in recent years. And Powell's hawkish speech is not only that, he also specifically hit the cryptocurrency circle, saying that the Federal Reserve cannot hold BTC, causing the bitcoin market to fall by 5%, which is simply too bad.

This is a hard crash. No one can predict what he said. It is really a sudden disaster. Not only retail investors, but even Wall Street can only stand at attention and take the beating. The main reason for this plunge is that Powell said that there will not be too many interest rate cuts next year, and there may only be two interest rate cuts, which has led to a decline in various assets.

After the sharp drop in Bitcoin in the past two days, many people have questions in their hearts: Is the bull market over? Will there really be a bull market in 2025? ?

You can think about it. If you have an expected bull market, what will it be like? In the hunting ground of the cryptocurrency circle, all your preferences are your death traps. Everyone generally expects the bull market to come. If the market really arrives as expected, will there be any moths? Such a satisfying thing will not happen in the cryptocurrency circle, and the market will not develop as everyone expects. If this is true, think about whether there will be people who fail in investment in the market?

Have you seen any dealer come to this market for charity and gifts? Because they understand a truth, you must give before you take, give what you like, and then put a sickle on you, and when you are all immersed in joy, suddenly give you a snap.

Let's return to the cryptocurrency market. If the bull market does not arrive, what will happen if BTC washes tens of thousands of points? What should I do if the sky is clear in the morning and a storm suddenly comes at noon? These should be thought of in advance, instead of dreaming and waiting for the bull market to arrive, otherwise it will be more of a purgatory. How to protect yourself and how to fight this battle well are the most important things. Let's encourage each other!

Let me explain why there is linkage between assets.

For example, you see that BTC has fallen by 5% today, and the structure does not look good. You think it may fall again tomorrow or the day after tomorrow, but you do not have BTC in your hands. You look at the altcoins in your hands that have not fallen yet. What choice will you make? If you are not optimistic about the trend of BTC in the next few days, you will most likely sell the altcoins in your hands. If everyone thinks so, it will cause a collective sell-off of altcoins.

Therefore, if BTC falls, other altcoins will also fall, and there is a high probability that they will fall deeper, which has become a "market consensus". Then there will be traders who run this trading strategy or even automated trading players in the market, and further deepen this "market consensus" through trading.

In fact, it is best to use US stocks and BTC to explain "asset linkage". If you have observed the linkage between the two, you will find a particularly interesting phenomenon: "The decline of BTC is usually preceded by the decline of US stocks."

Why? Suppose I am an institutional fund manager. If I am not optimistic about the "future market", I must sell off my "high-risk" assets first, so that my investment portfolio will be more defensive. (The "market consensus" here is: BTC is riskier than US stocks)

So when the market begins to be pessimistic about the future market development, BTC will fall before the US stock market. When the consensus of "the future market will be worse" is further deepened, everyone will start to sell US stocks, which will lead to a sharp drop in US stocks.

If you understand the above reasons, you can draw the following conclusions to improve your trading system:

1. When BTC plummets, the altcoins that fall the most are usually the "worst consensus" (avoid these assets)

2. After the sharp drop of BTC leads to a sharp drop in altcoins, the ones that rebound the most are usually the "strongest consensus" (choose these assets)

3. Don't be greedy when choosing assets, the strong will always be strong. (Unless there is a change in the underlying logic that changes the consensus that "this copycat is very strong", then you have to rethink your position configuration. For example, the inscriptions ordi and sats in the BTC ecosystem were originally the "strongest consensus" in the Binance copycat. After this wave of on-chain funds were transferred to sol meme, the inscriptions became the "weakest consensus" instead.)

What does it mean that coins like ORDI, which have a low market cap, have liquidation volumes similar to those high market cap coins like PEPE, XLM, PNUT, and ARB?
It indicates that there are a lot of people going long on ORDI, many are optimistic, and the position is heavy.

Similar to ETH a month ago, there are particularly many optimistic people; this doesn't mean it won't rise,
it's just a bit difficult, many longs have almost died, and the position is lighter.
In the past six months, new coins that have come out, and old coins from three years ago, have relatively lighter positions.

BTC Rapid decline, spot between 95K-101K has been received, how to handle it?

The bulls are making a final effort,
If today's closing line does not return to MA20-99.7K,
It will constitute a double breakdown of MA20 and the rising trend line,
Need to take profits and exit,
Waiting for a longer adjustment period;

Counterfeit can't be played with, it will lead to confiscation, really.

It's not for small retail investors, it drops but doesn't rise, 95% of the counterfeits in the market only have one wave, interest rates will be lowered twice next year, originally it was said to be lowered four times, but the expectation for interest rate cuts next year has decreased.

In the U.S., it's basically all hawkish speeches, saying one thing and doing another. Looking at the market in 2023, January was all declines, only at the end of the month did the market warm up. Currently, we can only do short waves, quick in and out.

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I love Binance, but please Binance don’t launch new coins every day, the retail investors need a break, otherwise it’s unbearable. Whenever a new coin goes live, it drops, draining the liquidity from the crypto market, and it's tough for everyone.

Steady and gradual.