What is 'Altcoin Bull'?
"Altcoin Bull" refers to those altcoins that remain unaffected and rise strongly during a Bitcoin market pullback. When Bitcoin's price falls, the altcoin market does not suffer but instead acts like a force that rushes forward regardless of everything, continuing to rise. This phenomenon is referred to as 'Altcoin Bull.'
Bitcoin's Pullback and Market Interpretation
From last night to today, Bitcoin's performance was affected by a piece of news regarding the US government's transfer, resulting in a noticeable pullback. Specifically, Bitcoin fell from $97,300 to $94,300, dropping over $3,000 in just a few hours. Although many experts and analysts have come out to explain that this is just a custody action, and even if the US government decides to sell Bitcoin, it would choose to do so through over-the-counter (OTC) transactions, which would not directly impact the market, the market's reaction cannot be ignored.
The recent pullback seems to reflect that part of the market's funds is choosing to take a risk-averse approach. Although some analysts believe that the actions of the US government may have a negative impact on the market, especially after Trump's inauguration, and that market expectations for his policy implementation may see a correction, Bitcoin still possesses strong upward momentum in the long run. For example, MicroStrategy recently purchased another 15,400 Bitcoins, worth approximately $1.5 billion. Additionally, the inflow of funds into Bitcoin ETFs has also been very strong recently, with inflows reaching $6.5 billion just this month, indicating that Bitcoin's long-term upward potential remains robust. Therefore, despite possible adjustments in the short term, the upward trend of Bitcoin cannot be ignored.
The Rise of Altcoins and Fund Flows
In stark contrast to Bitcoin's pullback is the strong performance of altcoins. This wave of altcoin rises completely ignores Bitcoin's pullback, demonstrating extreme market sentiment. The rise of altcoins is often accompanied by a frenzy among retail investors, and this frenzy can elevate the leverage sentiment of the entire market, thereby enhancing the efficiency of market fund utilization. In recent years, the staking of stablecoins and high-yield deposit rates have begun to attract a large influx of funds. For instance, the market capitalization of the stablecoin USDE has surpassed that of DAI, while the deposit rates on platforms like Aave and Usualmoney have reached 30%-50%, with some platforms even offering rates as high as 70%.
This trend provides the market with new leverage tools. As funds continuously flow in, the lending market and collateral market are thriving, especially the collateralized lending transactions based on Bitcoin, Ethereum, Solana, etc., are growing rapidly. This leverage effect, through the cyclical use of funds, has formed the 'Super Altcoin Bull' market, driving both altcoins and Bitcoin to rise simultaneously. It can be anticipated that as the liquidity of funds further increases, this market momentum will continue to amplify, creating a pattern of simultaneous rise in the main market and altcoins.
American Concept Coins and the Trend of the Cryptocurrency Market
The current cryptocurrency market is not just a game of funds, but more a game of concepts and market expectations. Recently, Forbes summarized a list of 'crypto zombie coins,' which includes a batch of previously dormant projects such as XRP, ADA, BCH, LTC, and ICP. These projects have seen impressive gains recently, with XRP rising 110%, ADA rising 50%, and LTC also rising 50%. The performance of these projects is closely related to the 'American concept coins' they represent. Many people generally believe that the mainstream funds in the current market are concentrated in American concept coins, Coinbase concept coins, and Upbit concept coins, which is also one of the main driving forces behind the current altcoin bull market.
In the current market environment, investors need to pay attention not only to the potential of the projects themselves but also to the fund flows and market trends behind them. The cryptocurrency market is highly rotational, with the typical characteristic of a bull market being the continuous rotation of market funds seeking emerging investment opportunities. Therefore, for investors, focusing on those projects that have multiple favorable concepts but have not yet surged significantly and have a moderate market capitalization will be the most promising layout strategy at this stage.
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Investment involves risks, and the above content is purely personal sharing and does not constitute investment advice!