After a downturn in 2023, the crypto market ushered in a new round of bull market in 2024. Under the favorable macro background of Ripple and Grayscale's victory in the case, the launch of crypto asset ETFs, and the expected interest rate cuts in the United States, the cryptocurrency investment market continues to heat up; factors such as Bitcoin halving, favorable Hong Kong policies, spot Bitcoin ETF funds and stablecoin capital inflows have become important driving forces for the bull market.

However, this round of bull market seems to be different from the previous ones. Is this the weakest bull market, or is it ready to go?

What is the reason for the recent decline? Where is the turning point?

First, the expectation of the Fed’s rate cut has weakened. Crypto is a high-risk asset after all. It is particularly sensitive to macro monetary policy and overall market liquidity. There is no way to start a bull market without the expectation of loose monetary policy. Secondly, there is a lack of innovation. The new narrative based on technological innovation has dried up.

After the halving, the long-short game is obvious. In the past, each halving had a callback and shock, and the upward trend was unclear. Based on the lack of new narratives, the market needs multiple declines and consolidations to find a better cornerstone and take-off point.

In a bear market, every decline is a lure for the enemy to go deeper, and the experts die from bottom-fishing; in a bull market, every decline is an opportunity to get on board, and the novices die from fear of heights! Every decline in a bull market is for a better rise, and when the last adjustment comes, the bull market will end and the cliff will fall. Now is obviously not the last time.

What we can do now is to wait patiently and not rush! No matter where the price falls, it is most important to allocate the chips properly so that you have the opportunity to buy at the bottom. The current decline is just a normal market fluctuation. Historically, there will be some callbacks for such a rise.

In addition, this field has not yet seen everyday applications that can resonate with the mainstream group, especially those mainstream users who are still skeptical about cryptocurrencies and are still waiting for a more specific application scenario than simple price speculation.

In terms of regulation, despite the "victory" of the BTC ETF, the US SEC remains strongly hostile to cryptocurrencies and continues to file lawsuits against developers, protocols, and platforms. As preparations for the presidential election are about to begin, we are unlikely to see a change in the narrative of regulators.

Finally, ETH, once seen as one of the most promising alternatives to traditional finance “sound money” and spawning early narratives such as ICOs, DeFi, NFTs, wallets, and staking, has been lagging in this cycle, with the ETH/BTC ratio gradually declining over the past two years (BTC’s dominance rising).

BTC has successfully transformed itself from a payment currency alternative to a "digital gold" narrative, and has therefore secured an allocation in the portfolios of many macro investors, while ETH's most promising narratives have yet to be realized and it has clearly failed to gain a foothold.

Solana has successfully become the "Memecoin ecosystem's first choice" in the current cycle, and its status has gradually improved, while ETH, the second largest token in the cryptocurrency market, has failed to play its due role. It is undoubtedly the token that most needs the next "killer application" or DeFi revival to regain mainstream interest.

There will always be a turning point under strong pressure

But I think this is a good thing. A rise that is too fast usually leads to a lack of momentum. Adjustment is for a better start, so there will be a copycat bull market in the future. Here are three levels:

1. Bring in fresh blood:

The decline is a feedback from market supply and demand, which means that the rise driven by BTC in the previous stage has become a little weak. There are too many profit-taking orders, and fresh blood is needed. This stage provides a buffer to allow everyone to enter the market and give the new narrative some time to grow.

2. The decline is for a better rise:

The distinguishing feature of the bull market is that there will be at least two to three major midway adjustments during the entire process, and after each adjustment, it will continue to advance rapidly;

Only when the market falls and consolidates or fluctuates downward can some undecided people throw away their chips and redistribute wealth. In a bull market, don’t judge the short-term cycle, just judge the top of the emotional value and the high level of historical data. It is right to think more about the escape strategy every day.

3. The essence of finance is not that money disappears, but that money is transferred.

Why does it fall? Because it needs to get more chips and get more market participants to enter the market, so that the next round can break the shackles of 100,000; Why does it rise? Getting enough chips will start the market, as for what good news to use to push the market and how high it will go, it is just a matter of operation.

Sometimes the news and technical aspects are often contradictory, and sentiment indicators are often very useful at this time.

For example, many people nowadays must be betting on a pullback and going short. I used to do that. When I saw a bearish trend, I would go short immediately without waiting for a second, and then I would lose all my money. But now I don’t do that. I will look at the ratio of long and short positions and understand who your opponent is before making a bet.

The cake has not changed, but more people are eating it

On the other hand, the market size is larger, so the overall increase may not be as good as a few years ago. Projects such as Meme and AI have a lot of room for hype, so the bubble is likely to be bigger. For other projects, they can only be considered from the perspective of practicality and protocol income. Without these basic elements, it is difficult to obtain more long-term value.

Another major missing piece in this cycle is the lack of entry of venture capital.

In previous cycles, venture capital and token prices moved hand in hand, but in the current cycle, venture capital has barely moved despite BTC rising from 20k to 70k. Continued capital inflows are essential to maintain excitement and FOMO, especially as most cryptocurrency protocols are still struggling to maintain a business model that grows organically.

We may need to see more regulatory clarity after the US election before venture capital re-enters this space.

Will a bull market with thousands of coins flying together come?

I think all coins will rise during the crazy stage of the bull market, but the degree will be different. There are strong coins and weak coins. It is still difficult to increase by several times or even dozens of times. Some coins are destined to exit the stage of history, just like the star coin EOS a few years ago. Everyone knows that it will reach 500 after three waves, but the result is the failure of the diamond hand. We still have to choose strong coins and follow the good trend.

Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the cryptocurrency circle to explore together. If you have any questions, you can comment and ask questions