This morning, the market saw an adjustment, with Ethereum dropping from 3800 to 3510, and many altcoins followed with a decline of 20-30%. If you had previously reduced your position, this wave of decline wouldn't hurt you. But if you hadn't reduced your position, you might get stuck. At this time, it is advisable to check your holdings, look for support levels of these coins, and try to lower costs to reduce losses.
An important reason for this decline is the deleveraging process. Recently, many investors have borrowed money through leverage to increase their investments, creating significant risks. When the market experiences extreme fluctuations, leveraged traders can easily be liquidated, leading to substantial capital outflows. Although many people see the market decline, it is actually an adjustment made by the market to clean up leverage. Once these leverages are cleared, the market can return to normal and enter a new upward cycle.
There is no particular negative news; this is just a fluctuation in sentiment.
This decline does not have clear negative news. Overall, it is mainly due to the deleveraging and fluctuations in market sentiment. The US stock market also saw a decline last night, affecting market sentiment. Additionally, the outflow of Ethereum was once large, approaching 5 million, but now the ETF data has turned to net inflows, indicating that the market's capital inflow situation has become healthier.
In general, this decline is merely a fluctuation in sentiment and a process of deleveraging. Once the deleveraging is complete, the market will be more relaxed, and more capital will enter, driving prices upward.
Deleveraging is to prepare for the future bull market.
This wave of market decline is actually preparing for the future bull market. For the bull market to rise higher and healthier, it must go through a deleveraging process. This bull market is different from previous ones, as there are no large-scale liquidity injections, and capital is more cautious. Therefore, to promote price increases, the burden of high leverage must first be eliminated. After deleveraging, the market's capital rates will return to normal, and the performance of altcoins will gradually improve.
Although Ethereum has not yet broken its historical high, it means that its acceleration phase has not yet arrived. Most altcoins are still in the bottom phase. The real start of the bull market is when capital enters, not when retail investors sell. After the flash crash, the market will enter a recovery phase, and once the recovery is complete, it will welcome a phase of accelerated growth.
Which altcoins are worth paying attention to?
This flash crash actually gave investors who did not have time to buy strong coins an opportunity. Here are a few altcoins that may perform well in the future:
ETH
Ethereum will have an online conference this month, and new upgrade plans are expected. Additionally, the ETF has seen net inflows for half a month, and the upgrades in March next year and potential policy easing after Trump's inauguration in January could drive ETH's price up.
Reference price: consider buying in batches around 3550-3500, with target prices set at new highs and 8000.
SOL
Solana is expected to be the first altcoin to launch an ETF. In January 2025, Solana ETF applications submitted by four institutions will undergo review. Additionally, Solana's ecosystem is continuously developing.
Reference price: consider buying in batches around 200-205, with a target price at a new high, possibly rising to 500 after the ETF launch.
DOGE
The trend of Dogecoin has not ended, and Musk will officially take office as the DOGE minister in January, which may further boost Dogecoin's price. Although Dogecoin has a large market cap, there is still room for it to double.
Reference price: buying a portion at 0.4, with the remainder bought in batches around 0.36, remembering to control the position well.
Pepe
Pepe coin, despite experiencing a lot of fluctuations, still has potential. Friends who built positions last year have already made a good profit and may see good returns in the future.
Reference price: consider buying in batches between 0.00002-0.000018, with a long-term holding target of doubling.
Summary
The short-term fluctuations in the market and the process of deleveraging are actually preparing for future price increases. Although this decline has caused panic among many, it has actually provided more room for future growth. In this bull market, especially without large-scale liquidity injections, capital flow is more cautious. By cleaning up leverage, the market will welcome new opportunities for ascent. Therefore, investors do not need to worry too much and should seize the opportunity to acquire quality assets at low points.
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Investing involves risks. The above content is a personal share and does not constitute investment advice!