On the evening of July 24th, the cryptocurrency market experienced a long-awaited night-time sell-off. The initial cause of this sharp fluctuation is closely related to the cliff-like drop in the US stock market, and panic quickly spread to global financial markets, including the A-share market, leading to a bloodbath in the entire market. There are various opinions on the reasons for this major drop, but the results have already manifested, making discussions about right or wrong meaningless.
In the face of such a turbulent market, what really needs to be considered is the future trend of the market: will it rise or fall? This article will share some personal opinions from both a technical and news perspective. Investment relies on analysis and experience, and while these opinions may seem speculative, as long as they help us achieve our expected goals, they are valuable.
Technical Analysis
Bitcoin fell from March 13th to July 5th, reaching a low of $53,500, marking the largest drop and the longest duration between 2023 and 2024. The panic during this period reached a historic low, with the panic index dropping to 23, and the number of long positions being liquidated remained high. Altcoins were not spared either, experiencing a significant drop close to historic lows, leaving many investors deeply trapped.
Despite this, there have been numerous major positive news, but the market has repeatedly encountered negative news, such as the Bitcoin halving, the Ethereum Constantinople upgrade, and the approval of ETFs. These facts have raised doubts in the market about whether a major bull market is imminent.
By observing the market trend over the past year and a half on a weekly chart, the top 100 cryptocurrencies by market capitalization have not shown the same trend of continuously breaking previous lows as in 2022. Instead, the high and low points have gradually risen. Especially after the rebound following the low on July 5th, the trend has been quite rapid, similar to that of Bitcoin and Ethereum. When the top 100 cryptocurrencies by market capitalization synchronize on a weekly level, it indicates that the real major trend is about to come.
News Analysis
Recently, institutions such as Grayscale, the German government, and entities in Mentougou have been selling Bitcoin and ETH, especially during the major drop in early July. In theory, these sell-offs would lead to a major market decline, but in reality, the market has risen. This is due to continuous buying by institutions such as BlackRock, where they sell on one hand and buy on the other, ultimately leading to a rise in prices.
This indicates that there is a certain amount of game-playing among institutions, which can also be understood as them being both partners and opponents at different stages, an inevitable phenomenon in the financial market. The sell-off last night does not mean that the market is completely over, but rather shows that large funds are using the strategy of washing out weak hands and speculative traders.
BTC, high-level retracement, if it can be supported in the price range of 62,378 to 63,000, then it will continue to be bullish. The resistance levels above are at 70,000 to 71,000. If it can forcefully break through this resistance, it will then challenge the previous high point at 73,881.
If the support cannot hold, then the next support level to look at is 58,218.
Summary and Outlook
Combining the above analysis and past experience, to summarize with a quote from Warren Buffett: "Be fearful when others are greedy." The current decline is not significant, but the sense of fear is deeper, indicating that the market has formed an inertia, where positive news turns into negative, and negative news inevitably leads to a decline. This is similar to the psychology during the transition from a bull market to a bear market, where any pullback is an opportunity to increase positions.
The current market is no different from 2022, just reversed. It is widely believed that there will not be a major bull market in 2024, or that the bull market will not arrive so soon, but the reality often goes against human nature, and everything needs time to be verified.
The darkness before dawn is always the most suffocating, because being shrouded in darkness for too long has deeply ingrained people's inertia. When most people have given up, even if they see the sunlight, they will think it is an illusion. The real test in the second half of 2024 lies within the heart. Only by believing first can we see the dawn of a major bull market and embrace a bright future.
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