Is it the start of a bull market or a shock distribution? A review of the cryptocurrency market

Sorting out the current situation:

Tone objective trend facts: The entire cryptocurrency market peaked in early March 2024 and reached its second peak in early June. Then the market came out of the local bear market, and it has been 4 months so far.

This is also what everyone often talks about. Except for the price of Bitcoin (and Ethereum before, but now it’s gone), everything else looks like a bear market: no innovation, no narrative, lack of liquidity, PVP stocks are cut by each other, and there is no hot spot in the circle to attract outsiders to interact and take over.

In a bear market, there are more declines than increases. The market trend is downward. Although the price of the currency has rebounded, it is lower and lower. Most people lose money. The rebound is not sustainable and the operation is extremely difficult.

Current situation of market participants (retail investors): Most people are stuck at high positions. More than 90% of retail investors will lose all the money they earned from the trend from October 2023 to March 2024 in the bear market of the past six months, or even go into debt. Currently, the active investors in the market are basically a group of "leek elites", 5% of them make money, and 5% of them protect their capital.

The main funds in the cryptocurrency circle also played this way at the beginning, collecting retail chips through various means, and making profits by accumulating and distributing them. Some old currencies, such as XRP and LTC, can be seen in the shadow of this operation.

But in the current cryptocurrency world, except for BTC, I think the concept of collecting chips no longer exists in most other currencies. If this plate is broken, just change it. Because the difficulty of issuing coins is much lower than the difficulty of listing stocks, the difficulty of concentrating on playing a plate to collect chips is much greater than the difficulty of starting over with a new plate. This is the current situation in the cryptocurrency world.

Pie and the cryptocurrency world: At present, the biggest difference between Pie and the cryptocurrency world is that the composition of the traders is different. The counterparty of the native cryptocurrency world is: institutions vs. retail investors vs. retail investors; while the counterparty of Pie is: retail investors vs. institutions vs. institutions. Pie and the cryptocurrency world have long been separated and will gradually drift apart.

Analyzing the future:

From a long-term perspective, as the global financial environment gradually shifts to an easing cycle, the performance of risk assets will be positive in the long run. So let's analyze where our upward driving force lies if we go bullish directly.

From the end of 2022, the market bottomed out and actually went through two upward trends.

The first wave is from the end of 2022 to the middle of 2023. The main driving force is that the Federal Reserve stopped raising interest rates. Along with the main driving force, the narrative in the circle follows, including L2 narrative, halving narrative, L1 public chain narrative, etc. Most currencies have completed oversold rebounds, and a small number of currencies have performed well.

The second wave is from October 2023 to March 2024. The main driving forces are the Fed’s interest rate cut expectations and the Bitcoin ETF (I think the halving narrative is secondary). The narratives in the circle at that time included BRC20, L1 public chain, L2, modularization, etc.

What about now? On a micro level, the trend after this halving is more leisurely. If the market does not start in another two weeks, it will set a record for the longest consolidation in BTC history after halving.

BTC has been in the 60-70k range for much longer than the 50-60k range, and this is after many terrifying selling pressures and negative tests. This shows the solid fundamentals of BTC at this stage and lays a solid foundation for the next stage of upward breakthrough. Once the market breaks through $80,000, the probability of seeing $60,000 again may be very small.

From the chip distribution chart, for example, the support of $64,000 to $69,000 that we often talk about is still very strong, and the new and old support of $63,000 seems to be the focus of the game. The consensus of $60,000 is very strong.

In addition, the US producer price index (PPI) data for September was released last night, with the annual growth rate falling to 1.8%. Although it is still higher than the expected 1.6%, the downward trend has led the market to expect that the consumer price index (CPI) will continue to fall, thus increasing bets on the Fed to continue to cut interest rates.

When the Federal Reserve is irreversibly on the path of interest rate cuts, the blood-sucking market of A-shares has come to an end temporarily, and the time for BTC to launch a crypto bull market is getting closer and closer.