The process of bitcoin's first attempt to break through $0.1 million seems to have temporarily failed, encountering a flash crash this morning, dropping to a low of $92,326. This move has made everyone a bit nervous, worried that the bull market may be coming to an end. In fact, there is no need to worry at all, as the overall trend is still upward. The price has already rebounded, with this pullback mainly influenced by the liquidation of long positions and profit-taking by long-term bitcoin holders (LTH).

I believe this is a healthy pullback: due to strong demand from short-term investors, these selling pressures were rapidly absorbed beforehand. The selling behavior of long-term holders is a common phenomenon during a bull market, where the bid strength is enough to absorb these selling pressures. Currently, the profit rate of long-term holders has exceeded 350%, and they are gradually transferring the accumulated bitcoin to short-term investors, thus forming a reallocation of market funds and assets, which also provides the necessary momentum for further upward movement.

No particularly important events this week, on Tuesday, minutes from the Federal Reserve, on Wednesday, PCE, which also influences the basis for future interest rate cuts!

The macro backdrop of the market from October 2024 to now: this round of interest rate cuts began in September 2024, combined with Trump, the new USA president with a crypto-friendly attitude, the reduction in balance sheet may be nearing its end in Q1 next year, along with the spot etf. Although liquidity has not yet been released, it has at least transitioned from tightening to loosening, a new four years, very much worth looking forward to.

The first wave is from now until Q1 next year, and then we will see if there will be a recession in the usa, or other black swans. If there is, it will be another 312, and then it will be similar to the situation in 2020-21, and I will share specifics at that time.

If there is no recession in the usa,But after the bursting of the internet bubble and the Fed's rate cut in 2001, the ROI dropped by more than 10%.So, there will be no 312, and the music will continue to play and the dance will go on!

Currently, the market has entered a phase of rotation among the leaders of various altcoin sectors, marking the beginning of the altcoin season.

Although bitcoin has undergone a correction, the altcoin market has suddenly become vibrant.

This wave of market movement is mainly concentrated in old coins on CEX, with almost all old coins rising more than 30% over the weekend. This trend resembles the post-2020 defi boom when large funds collectively returned to CEX. At that time, not many people successfully captured the CEX market; many made money on defi but missed the CEX opportunities, and this situation is quite similar.

Ethereum is now showing signs of revival; observing the market reveals that during this bitcoin correction, altcoins didn't really follow the decline. The performance of the king of altcoins, ETH, even surpassed the overall market indicator, the CoinDesk 20 index, which increased by 0.5% during the same period.

MarketsSector rotationCurrently ongoing, investors are starting to shift their funds towards smaller, higher-risk cryptos, resulting in substantial performance from altcoins like ADA and DOGE, while bitcoin has stagnated since Trump's election.

However, it should be noted that the altcoin sector is only experiencing a rebound at the moment, and after a reasonable space, it is still necessary to cash in, unless ethereum sees significant application innovation, a trending bull market arrives, or new innovative segments emerge in altcoins that attract speculative funding.

Each pullback is actually the best opportunity to enter, but priority should be given to mainstream options like leaders, public chains, defi, and L2, which are typically the market's first choices.

I summarized the leaders of various sectors in yesterday's post "Is the Market in a Major Reversal? No, It's Just a Shakeout! How to Grasp Quality Symbols from Bitcoin to Altcoins?" If interested, click to read.

Why do most people lose money in a bull market? Because the emotions in a bull market are driven by FOMO, and it becomes a visually distracting temptation; there are myths of getting rich every day.

In such a restless market environment, staying calm is not easy. Especially during a bull market, many people easily lose their direction; in fact, what we need to do more is "subtraction," learning to let go.

For example, coins like FIL, EOS, and ARB may experience a wave of main upward trends, but I prefer to take a bite when opportunities arise and then run, focusing most of my energy on capturing the main line while putting a small portion of my energy into the side line. Even if mistaken, overall BETA gains of a bull market won't be missed; but if correct, it’s akin to possessing the script for clearing the game.

Altcoins are still in the rebound and catch-up phase; unless large applications emerge in certain ecosystems, these coins won't have sustained main upward trends. For instance, bitcoin may consolidate around $0.1 million, meme coins are also adjusting, and funds are starting to flow into the altcoin sector, driving the short-term market trend. Recently, the increase of some less popular old coins is mainly due to the concentration of institutional funds, which can easily cause price surges.

From a fundamental perspective, there hasn't been a significant change in on-chain activities and demand for ethereum, and gas fees remain at a historical low, while inflationary pressures still exist. The high FDV and ongoing unlocking issues of altcoins have yet to be resolved.

Therefore, the current market situation is still in the rebound and catch-up phase. Attention could be focused on the rebound potential of tokens within the ethereum ecosystem. After all, the usa's etf currently only involves bitcoin and ethereum assets, while ethereum, as the 'king of ecosystems,' maintains its strong position. Previous FUD has caused a significant drop of its ecosystem tokens, leaving ample room for rebounding. For example, leading staking tokens like LDO; second-layer solutions such as OP, zk, STRK, and ARB; and domain-related ENS tokens are all worth paying attention to.

Finally, a reminder to everyone: don’t be overly joyful when the market goes up, and don’t be too sad when it goes down; there’s a saying that excessive joy brings sorrow. Nothing goes up forever, and nothing goes down forever. One must hold a sense of reverence for this market.