CoinWorld reports:
Author: 0xkyle0xkyle, Researcher
Source: X, @0xkyle
Translation: Shanooba
As you can see, the market is currently in a stalemate. Narrative themes are just exceptional performances during an uptrend driven by liquidity transfer – but in a downtrend like the one we are experiencing now? These themes disappear entirely within a day, leaving people like me with nothing to do!
But I don’t really mind – to be honest, I’m quite happy about it. A price drop means it’s an excellent time to relax and research tokens, and then buy when liquidity inevitably returns – but will it return?
So today, I just wanted to write down my thoughts.
Long-term perspective on holding cryptocurrencies
From a generational timeframe, I am still very optimistic about cryptocurrencies; I don’t want to repeat the cliché of “it’s a revolutionary financial system,” but I did write a great tweet explaining my thoughts – yes, I believe that if you are in this industry, it is not only important to stay optimistic from a “market cap” perspective but also from a career perspective.
Limitations of short-term market predictions
Narrowing down a bit, I am cautious about predicting the market’s direction in 2025. This is where my macroeconomic knowledge is weak because I cannot truly understand the overall situation. I know some basic knowledge, but I don’t have any specific data on whether interest rate cuts are positive or negative (my initial thought was long-term positive, short-term negative), nor do I have any actual experience with similar macroeconomic situations to refer to.
I want to say that I am optimistic, but to be honest, it feels more like a prayer than a judgment. 2025 looks like it will be a good year – considering the current Republican President’s chances of winning, we can assume that Trump will become the President – if we follow this line of thinking, it seems to mean looser credit policies, a more adventurous environment, and most importantly, a relaxed cryptocurrency policy (Trump recently expressed his hope that “Bitcoin will be made in the USA!”).
Well, the risks here are:
1) If the Democratic candidate wins – they don’t seem to be very favorable towards cryptocurrencies;
2) If Trump wins, it doesn’t mean everything will go smoothly – we are likely to face a terrible macroeconomic situation as stocks are currently at an all-time high, and some very bad indicators are flashing, indicators that have not been seen since 2008 (you can check out “The Game of Trading”).
Unfortunately, this lengthy discussion has only one conclusion: I don’t know! My basic stance is optimistic about 2025, which is the plan I have made – Republican President, looser financial policies, and the continuation of an overall upward trend with some bumps along the way.
Short-term Bitcoin trends (LTF)
Now that we have set an optimistic tone for 2025, what is my view on short-term (monthly and weekly?) Bitcoin trends? I believe that the fourth quarter of 2025 to 2026 will be very favorable for risk assets, including cryptocurrencies – but I don’t think cryptocurrencies will perform well at the moment.
In fact, despite Bitcoin’s rise from $53,000 to $58,000, I am still very bearish. I have been bearish since the Federal Open Market Committee (FOMC) policy meeting a few weeks ago when Bitcoin failed to break through $72,000 while stocks continued to rise. Clearly, the overly bearish sentiment has passed now, as the old saying goes: extreme bearishness at the top, a slightly softened bearishness at the bottom.
I am still bearish but with caution – I have bought a considerable amount of spot positions at $53,000 because these are usually good prices to acquire spot exposure. On my perpetual contract account, I am still short on some high market cap tokens and have hedged with some Ethereum long positions.
Where do you think this wave will end? Well, I tend to think we are closer to the “anger” stage now (the above tweet was written before Bitcoin dropped to $53,000); $53,000 is the point where people start getting angry, so to me, it makes more sense for it to drop further to around $40,000.
I do think we will see a rebound wave in the range of $53,000 to $60,000; but I think any signs of reaching $60,000 should be sold off; I can see people becoming extremely optimistic when $60,000 is reclaimed, shouting “I told you so” and “It’s just a minor setback.”
Could I be wrong?
Of course, I could be wrong if Bitcoin goes up. But I’m just kidding. If Bitcoin can reclaim and hold the $60,000-$62,000 range, I will turn bullish from a technical perspective; but more importantly, I’m curious about how altcoins will react to this – I want to feel the urge to take risks before fully turning bullish. So far, these rebounds (e.g., $53,000 → $57,000) are not like the “risk-on” scenarios we saw in January/March but more like typical bear market bounces/forced liquidation buying.
However, even if I’m wrong, I have nothing to worry about – once again, that’s why I bought spot positions at $53,000! My positions may be smaller than I imagined, but that can easily change; I’d rather miss the bottom and buy later than be right and go long at this level.
So, what’s next?
To summarize:
Long-term: Bullish
Now: Bearish
I don’t know where it will end, but I lean towards the third/fourth quarter, simply because of the “summer market slowdown” theory (it has some credibility, and I won’t go into details); in short, summer is a slow market season with light trading, lots of sell orders (Mt. Gox/German government), but come the third/fourth quarter – FTX asset repayments (rumored to be $16 billion?), ETH ETF listing, and potential bullish fourth quarter (just like what we saw in 2023).
So what’s next? Well, to prepare for the return of risk-on conditions, we need to be ready! I won’t beat around the bush; I’ll tell you directly what themes I believe will perform exceptionally well once risk-on conditions return:
1. ETH ETF and DeFi
Spend 5 minutes scrolling on Twitter, and you’ll surely come across a post attempting to assess the “impact of ETH ETF”; therefore, I think I don’t need to explain why ETH ETF is bullish. Some people think ETH ETF will be bearish due to Ethereum’s overall performance this year – I believe past performance cannot represent future returns.
If we see risk-on conditions again, the bullish factors of ETFs seem very positive to me – it’s as simple as that.
2. Real-World Asset Tokenization (RWA)
Combined with the narrative around ETH is the narrative of “institutions getting in” – thus, tokens related to this narrative will perform well. Speculators are expected to rush in, asking about the next “RWA associated with BlackRock.”
3. Fundamentals
I will once again spare you my lengthy thoughts on this theme – but I do frequently tweet about it. Essentially, I believe coins that can do things will be the hardest to send. We already have some on-chain currencies (BANANA and ACX); we have not seen other parts of the market catch up yet.
