Bull runs and bear markets rely entirely on sentiment. Why will there be a decent rebound by the end of the year?

The recent market trend has really been a struggle for everyone. Last Friday, it felt like a Bear Market had suddenly arrived, but after the weekend, today we welcomed a decent Rebound, and all the groups have started shouting that the bull is back, hurry back! In fact, looking at it this way, it’s still a bull or a bear; many times it all depends on everyone’s emotions, which have little to do with the specific price.
I came across a pretty interesting joke these days: Around this time last year, although no one dared to guarantee that Bitcoin could definitely break through 100,000 USD, everyone firmly believed it was a bull run. In the past few weeks, Bitcoin has merely dropped from its peak of 105,000, and there are a lot of people shouting Bear Market. The price is actually still the same, but people's emotions are completely different now.
If you mainly trade mainstream coins, I sincerely suggest not to focus too much on short-term fluctuations. Compared to the price of over 30,000 USD at the beginning of last year, no matter if it's 100,000, 105,000, or 120,000 now, these are prices that can only be seen in a bull run. The difference really isn’t that significant. Many retail investors are prone to losing their composure because they watch the market too closely. Today, Bitcoin rose from 107,000 to 111,000, and the calls for a bull return are so high, which just illustrates this point. So don’t be misled by today's strong rebound; it might drop a bit tomorrow, and everyone will start talking about a Bear Market again. If your energy is always being led by these fluctuations, it will be very exhausting.
Try comparing the current price with the highest prices from last year, the year before, and even from the last few bull runs, and you'll have a clearer understanding. This is the secret that can help you make money in this market over the long term.
In summary, the current market situation is a rebound in the short term, but there is still a risk of a pullback in the medium term, as the macro environment does not change, leading to this risk.
The factors that are currently assisting the rise are still present:
The advancement of Sino-US talks is a signal of easing tensions.
October rate cut
Last week, the small and medium-sized banks collapsed like in 2023. People, in their panic, gradually realized that it was not comparable, whether in terms of scale, impact, or the environment at that time (previous rate hikes, now rate cuts). Moreover, people believe that the Federal Reserve will backstop. This week continues the earnings season, and if the earnings reports are good, a short-term rebound would also be a positive.
BTC, which fell earlier, now shows signs of a successful second test, with reduced volume and no new lows. We will see if it can break through the downward trend line.
ETH has re-established itself above the support level of around 3850 and continues to rebound, but after two consecutive weeks of decline, the weekly MACD has formed a death cross. There may be fluctuations in the process, but a correction at the weekly level is still expected to occur in the near future.
This week's focus: China-US talks
Friday: US September CPI
View on the market ahead:
In the coming months, apart from mainstream coins like Bitcoin and Ethereum, various altcoins, including those with expectations of altcoin ETFs and consortium reserves, may face more difficulties. This is because during this crash, the main losses were incurred by those trading altcoins and Meme coins.
The number of altcoins and Meme coins on the market today is significantly higher than it was four years ago, but the money from retail investors in the market is less and has become more cautious. Therefore, I believe that the popularity of altcoins will obviously decline. Of course, new retail investors are entering the market every day, and the market will eventually heat up again, but in the short term, it's unlikely that there will be a frenzied surge in all altcoins.
However, there is one advantage to this situation compared to 2022: the market's resilience has strengthened. Back then, a large institution like Three Arrows Capital collapsed because it made the wrong bet, which directly dragged the entire market down. Now, the market structure is more diversified and has a stronger risk resistance. Therefore, unless there is a large-scale crisis at the level of the entire financial system, it is unlikely that a single institution's failure will directly plunge the entire crypto space into a Bear Market like LUNA, Three Arrows, or FTX.
There is a good chance of a nice rise by the end of the year, for several reasons:
Currently, gold prices are being pushed very high, making it less cost-effective to buy gold at this time. In contrast, Bitcoin is like digital gold and may become a new choice for everyone, whether for investment or hedging.
There will be one or two more interest rate cuts before the end of the year, which will easily give bullish individuals an opportunity to drive the market for a rebound.
The fundamentals of Bitcoin and Ethereum themselves have not worsened, and more and more large companies and institutions around the world are continuing to buy and position themselves.
Most of the recent scams have gone through a significant test, and those projects without innovative revenue have completely exposed their vulnerabilities, disappearing in an instant. The market is basically filled with bloodied chips, which means many people are selling at a loss. Therefore, if you are still holding cash, this is actually a good opportunity; you can look for chances to start buying a bit slowly.
If you already have low-priced chips and your position is not low, the following points may be useful to you:
Stay calm: Don't always think about whether to buy more or to switch; you already have chips in hand, so be a bit more relaxed.
If you really want to increase your position, try to find new opportunities. If there are still profits, that's even better. Try to look for new hotspots and see if there are any new possibilities.
Remember, never borrow, especially on the platform. I've been emphasizing this point since the occurrence of the black swan; do not leverage! Do not borrow, as once liquidated, your funds will instantly go to zero.
Finally, the market sentiment is not high right now, it looks quite weak, but there is an expectation of another interest rate cut this month, at least there will be some local market activity.
Hold your chips steady, don't panic. After a few months of decline, sometimes it can bounce back in just a few days. The rest is up to time.
I believe that picking up the chips that others are afraid to take will not be wrong in the long run. At this time, don't pay too much attention to the short-term ups and downs. Spot trading is originally a marathon, not a sprint.
#加密市场观察