Author: Liu Ye Jinghong; Source: Weisman Notes
In the current complex and ever-changing crypto market, many readers are asking: Are we in a local bull market? Will the bull market break out across the board? This article will provide a detailed interpretation of this issue from three aspects: the current market situation, the ideal bull market for investors, and the real difficulties they face.
The current situation of the entire market
From the current market operation, the overall situation is full of contradictions and uncertainties. We can clearly observe the following phenomena:
Local bull market: Individual small sectors occasionally experience a surge, sometimes several times or even dozens of times. However, this local boom does not represent the entire market. While some currencies are rising strongly, most other digital assets are showing a downward trend. This situation of "local prosperity and overall depression" makes investors full of doubts about the future trend of the market.
Sector rotation has not really started: Although some ecosystems have seen significant increases, the profit-making funds from these increases have not been quickly rotated among various sectors. Sector rotation is the norm in a bull market, and its absence means that it is difficult for the market to form a general rise in the short term.
Everyone's ideal bull market
In the minds of most investors, an ideal bull market should have the following characteristics:
All-round rise, every digital asset in the market can usher in an increase, funds seem to be picking up money at the bottom, and every investment can get a satisfactory return. Healthy correction and continued rise
Even if there is a short-term correction, it will only be a healthy price adjustment, and the market will usher in a continuous and steady rise afterwards, ensuring that long-term investors can obtain rich profits. This kind of general market rise, abundant funds, and everyone making money is undoubtedly the most desirable bull market picture. However, reality has given us many warnings.
Why has such a general bull market not arrived?
From multiple perspectives, the current market does not yet have the basic conditions for a general rise. The main reasons are as follows:
Insufficient incremental funds in the market: Unlike in the past, the overall amount of funds in the market has not increased significantly under the current environment. The inflow of funds into an ecosystem will inevitably drive up its asset prices, but at this time other ecosystems are easily "bleed" by funds and fall. Without the injection of new funds, the logic of the overall bull market is difficult to start.
Disruptive technology is weak: In an era when new technologies emerge in an endless stream around the world, breakthroughs in AI technology have brought disruptive changes to all walks of life, while blockchain technology has long reached a bottleneck at the technical level, and it is difficult to see epoch-making breakthroughs in the short term. At present, the driving force of the industry is shifting from "technology-driven" to "story-driven". A popular concept or story can cause a short-term frenzy in the market, but it is difficult to support a long-term and stable bull market.
Strong policy-driven risk aversion: Policy uncertainty is always a shadow of the market. At present, the frequent policy trends in major economies such as the United States, such as Trump's coming to power and the resignation of the former chairman of the SEC, have made the regulatory policies in the crypto field unclear. In particular, US financial institutions have only shown a strong interest in Bitcoin and have not yet fully entered the altcoin market, which has reduced the market's risk appetite and funds have tended to be risk-averse.
Will a general bull market come?
Based on the above factors, it is unlikely that we will see a bull market with a general rise in the short term. Unless the following shocking off-market events occur, it is difficult for the market to stimulate strong and sustained upward momentum:
Epic policy benefits: If major favorable policies are introduced, especially if one or more countries introduce measures to clearly support the development of the crypto market, it may trigger a large-scale entry of funds.
Entry of high-level sovereign funds or institutional funds: Similar to institutional purchases of ETFs, long-term funds entering the market will provide continuous support for prices.
Currently, the market is more about the game of existing funds, without significant incremental funds and new users, let alone the formation of a general rise. If the market is only in a state of a partial bull market, it is almost impossible to rely on short-term speculation to obtain skyrocketing profits in the short term.
On the celebrity IP phenomenon of "Trump Coin"
Some people believe that topical coins such as "Trump Coin" have already attracted attention from both inside and outside the circle, and its out-of-circle effect may be the forerunner of the bull market. However, it should be made clear that Trump Coin is essentially a harvesting token, and its popularity is more of a product of short-term speculation, and it has not introduced truly long-term and stable investment funds for the entire industry. Only when funds similar to institutional level and long-term holdings enter the market in large quantities can the persistence of the bull market be stimulated.
Investment strategy discussion: short-term speculation and long-term fixed investment
Overall, in the current market, short-term operations have higher risks and lower chances of success. Although some high-quality projects have already experienced oversold phenomena, this is more of a good time to build a position, rather than a short-term profit opportunity. Investors are advised to extend the investment cycle and give their capital a longer period of exercise space:
Long-term fixed investment in high-quality projects: Select projects with solid fundamentals and growth potential, and build positions in batches, which can effectively disperse risks and help obtain greater returns when the bull market comes in the future.
Patiently wait for the market to turn around: Currently in the stage of stock fund game, as long as incremental funds and new users continue to intervene, the market may rise generally. However, this situation requires waiting for more breakthrough technologies or extremely favorable policy signals in the industry.
Conclusion
In summary, although local bull markets appear from time to time in the market, it is still far from the ideal overall bull market. Multiple factors such as technical bottlenecks, insufficient incremental funds, and policy risk aversion have jointly led to the situation of internal fund game in the industry. In this environment, if you expect to get explosive returns in the short term, you may face huge risks and challenges. In contrast, it may be a wiser choice to invest in high-quality projects from the current oversold phenomenon and extend the investment cycle to more than half a year.
What will happen in the future? Perhaps in the next article, we will discuss which projects meet the "high-quality" standard and which areas are worth holding for the long term. For current investors, caution, patience and long-term vision are the key to surviving this "copycat season".