CoinWorldNews Report:
Author: 0xkyle0xkyle, Researcher Source: X, @0xkyle Translation: Shanooba
As you can see, the market is currently in a stalemate. Narrative themes were only impressive during the uptrend, driven by liquidity shifts – but in a downtrend like the one we’re experiencing now? These themes disappear within a day, leaving people like me with nothing to do!
But I don’t really mind – in fact, I’m quite happy. The price decline means it’s an excellent time to relax and research tokens, and then buy in 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 perspective, I still have a positive outlook on cryptocurrencies. I don’t want to repeat the cliché of it being a revolutionary financial asset, but I did write a great tweet explaining my thoughts – yes, I believe that if you’re in this industry, you should remain optimistic not only from a market value perspective but also from a career perspective.
Limitations of short-term market predictions
Narrowing down my focus, I have a cautious stance on the market’s direction in 2025. This is where my macroeconomic knowledge falls short, as I don’t truly understand the big picture. I know some basics, 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), and I don’t have any practical experience with similar macroeconomic situations to reference.
I want to say that I’m optimistic, but honestly, it feels more like wishful thinking rather than a conclusive statement. 2025 looks like it could be a good year – considering the current likelihood of a Republican president, we can assume that Trump will be reelected. If we follow this line of thinking, it seems to imply looser credit policies, a more risk-friendly environment, and most importantly, favorable cryptocurrency policies (Trump recently expressed his desire for “Bitcoin to be made in America!”).
Well, the risks here are:
1) If the Democratic candidate wins – they don’t seem to be very optimistic about cryptocurrencies.
2) Even if Trump wins, it doesn’t mean everything will go smoothly – we might face a terrible macroeconomic situation as stocks are currently at all-time highs, and some very, very bad indicators are flashing, indicators that we haven’t seen since 2008 (you can check out “The Game of Trading”).
Unfortunately, this long discussion only leads to one conclusion: I don’t know! My basic scenario is optimistic for 2025, which is the plan I’ve set – a Republican president, looser financial policies, and a continuation of the overall upward trend with some minor hiccups along the way.
Short-term Bitcoin trend (LTF)
Since we’ve set the tone for being optimistic about 2025, what is my view on the short-term (monthly and weekly charts) Bitcoin trend? I believe 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 right now.
In fact, despite Bitcoin’s rise from $53,000 to $58,000, I’m still very bearish. I’ve 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. It’s clear that the excessive bearishness phase is over now, as the old saying in GCR goes:
Extremely bearish at the top, slightly less bearish at the bottom.
I’m still bearish but cautious – I’ve bought a significant amount of spot at the $53,000 level, as these are usually good levels to get spot exposure. On the perpetual contract account, I’m still short on some high-cap tokens and hedged with some Ethereum long positions.
Where do you think this trend will end? Well, I’m more inclined to think we’re closer to the “anger” stage now (the tweet above was written before Bitcoin dropped to $53,000); $53,000 is where people start to get angry, so to me, it makes more sense for another drop to around $40,000.
I do believe that we’ll see a rebound 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” everywhere.
Could I be wrong?
Of course, I could be wrong if Bitcoin goes up. But I’m just kidding. If Bitcoin manages to reclaim the $60,000-62,000 range and hold it, I will switch to a technical bullish view; but more importantly, what will altcoins do in response – I want to feel the urge to take risks before being fully bullish. So far, these rebounds (e.g., $53,000 to $57,000) don’t feel like the “risk-on” scenarios we saw in January/March; they feel more like typical bear market rebounds/forced liquidation bids.
However, even if I’m wrong, I’m not worried – again, that’s why I bought spot at $53,000! My position might be smaller than I imagined, but that can easily change; I’d rather miss the bottom and buy later than be right and be 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 idea of a “summer market lull” (it has some credibility, I won’t go into detail); in simple terms, summer is a slow market season with thin trading and many sell orders (Mt. Gox/German government), but come the third/fourth quarter – FTX asset repayments (rumored to be $16 billion?), ETH ETF listing, and the potential for a bullish fourth quarter (like what we saw in 2023).
So what’s next? Well, we need to be prepared for the return of risk-on conditions! I won’t beat around the bush – I’ll just tell you the themes that I think will perform very well when risk appetite returns:
1. ETH ETF and DeFi
Spend five minutes scrolling through Twitter, and you’ll surely come across a post attempting to assess the “impact of ETH ETF.” So, I don’t think I need to explain why an ETH ETF is bullish. Some people believe that the ETH ETF will be bearish because of Ethereum’s overall performance this year – I think past performance doesn’t necessarily represent future returns.
If we see a return of risk-on conditions, the bullish factors of an ETF 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 involved” – so tokens related to this narrative will perform well. Speculators are expected to flock in, asking about the next “RWA associated with BlackRock.”
3. Fundamentals
I’ll spare you my lengthy thoughts on this topic once again – but I do frequently tweet about it. Essentially, I believe that coins that can do things will be the hardest to dismiss. We already have some on-chain currencies (BANANA and ACX); we haven’t seen other parts of the market catch up yet;
