#12 Deep Dive - Strategy For Upcoming Months
How much of a bull run is left and will we see the alt-season everyone is looking out for?
Welcome fellow investooors! It’s crypto time so let’s dive right in. To access more content find us here on Twitter. Enjoy!
In today's edition of the newsletter, we'll focus on three key questions that will shape our market behavior in the coming months and help us approach the market with a cooler head. So, without further ado, let's dive into some market insights.
Laying Out Key Questions
The past few weeks have given us a wave of mental exhaustion, market frustration, liquidations, and significant portfolio losses, all while Bitcoin hovers around its previous all-time high. Are we even on the same market? Are we all looking at the same charts?
Honestly, the longer I stay in this market, the more I see waves of newcomers, programmed for instant gratification by apps like TikTok, struggling to endure two or three weeks of... not even declines, but consolidation within a pre-defined price range. I get it, everyone wants to be a market bull, but that takes patience. :)
But enough about the younger market generations. Let's move on to the main topic: questions that will lead us to the most important answer - what’s the plan for the next few months and where are we really in the current cycle?
Is the cycle peak already behind us?
When, and if, can we expect an Alt Season?
If Alt Season happens, which projects will benefit the most?
Question #1 - The Peak
The recent weeks of price stagnation and slight declines in BTC and ETH have brought extreme negative sentiment, spreading across the market and causing many altcoins to nuke, often below their April liquidation levels. For those heavily invested in altcoins – especially the wrong ones – these weeks might feel like the end of the bull market and the bursting of a bubble. But is this the same for those whose portfolios are mainly BTC and ETH?
Remember, market corrections are natural. After the wild gains Bitcoin has seen, breaking its peak even before the halving, the current declines seem minor. We’ve only had about a 13% correction, while 25-30% corrections were the norm before – and the market seemed to handle it much better in terms of mental fortitude. Imagine the market now if we suddenly saw BTC pull back to $50,000 – how many would declare the bull market is over and what would happen to alts?
In summary, we’re currently experiencing price consolidation near previous bull market highs, which is about a 13% correction and is incredibly bullish. Just look at the chart below and see how strong Bitcoin is holding. Do you see any reason to panic here? Cuz I do not.
So, to answer the main question of this section, I'd say the peak is still ahead of us. Considering Bitcoin's cyclical nature, what we’re seeing now feels more like 2020 than 2021. If I had to guess when we'll see the cycle peak, I’d say around Q2 2025. There’s still time to play the game. ; )
Question #2 - The Mainstream
I’ve written about Altseason in previous newsletters, so I won’t repeat everything here yet again to bore you, just make a quick recap.
The crypto market is much larger in terms of capitalization and market niches than before, so we can't expect an Alt Season where all projects and trends rise with the tide of liquidity and emotions. The market has changed, and our Altseason now is a time when the market can sustain more than one major trend for an extended period. The game now is to pick the fastest horses in the main trends and ditch those positions that can't fit into a strong narrative and underperform. Don't play by the old rules, because that limits your potential gains.
So, is an Altseason still a viable option waiting for us? I think so, but when and how will it look?
We haven’t seen significant capital inflow from the general public yet, and it's no surprise. The current trends have been deeply rooted in the peculiar internet culture, which isn’t easy to grasp for those not keenly interested. Also, Bitcoin doesn’t seem to be perceived as something special by the mainstream yet, so the excitement and mainstream influx will likely come when Bitcoin hits a 'god-candle' and breaks past $80,000 or nears the coveted $100,000. Only then might we see the real market frenzy, but it will be short-lived, as I suspect we’ll have no more than 2-3 months before hitting the all-time high and the party ends.
Don't focus on waiting for Altseason because if your current portfolio positions aren’t growing, why would Altseason change that? And that question leads us to the last part of today's newsletter: picking the fastest horses.
Question #3 - The Altseason
Every bull market has its narrative leaders, just as DeFi heated the market in 2020 before stepping back, and the Layer 1 projects narrative thrived throughout the bull market.
So, what narratives are leading this cycle, which minor trends might never rise again, and which new trends could surprise us like the Metaverse did in 2021?
These are the questions you need to ask yourself because each of us may have a slightly different perspective depending on the information bubble we’re in. Personally, I think the main narratives of this cycle are Memecoins and Artificial Intelligence (AI). While memes are independent of external events, the AI trend is heavily tied to external events that are hard to predict. A sudden drop in NVIDIA could end the entire AI trend, and attention could quickly shift to something new, surprising us like the Metaverse or other short-lived trends in the final stages of the bull market.
We also have potential trends related to pseudo-social applications, political trends heavily dependent on external events, the ordinals and run trend that might not go mainstream this bull market, potential ETF applications, infrastructure expansion and the RWA trend by BlackRock linked with BUIDL, restaking narratives if staking solutions get accepted in ETFs… but all these are just speculations on side trends playing second fiddle. So, ask yourself, is it possible for these to take the lead from memes and AI? Is it worth building a position in these trends knowing they might never catch the market’s attention?
Most likely, the majority of projects will perform worse than the current leaders like BTC/ETH/SOL, so you'll need to work hard to outperform the top players. The market is too fragmented to pump your bags, so follow the market's liquidity and attention if you want to outperform the most solid bets. Sadly, that's the truth. If you’re deluding yourself into thinking your token will suddenly surge during Altseason while it’s been underperforming all along, ask yourself if there’s any basis to think this way.
Most winners have already established their position in this cycle, so why do you think someone will suddenly dethrone them?
Cut the losers, and let the winners ride.
A Few Closing Words
In summary, the cycle peak is still ahead, mainstream entry into crypto is still ahead, the craziest trends and gains are still ahead… but to take advantage of what's coming, we can’t be lazy in choosing projects for our portfolio and relying on wishful thinking. Otherwise, we’ll be disappointed, watching other projects climb while ours remain asleep, potentially missing the entire growth period.
Let me say this once again…
Cut the losers, and let the winners ride.
That’s all for today, thank you all for reading this week’s Deep Dive and see you in two weeks time! To access more content find us here on Twitter. See you there!
~ ModernEremite & Crypto o’Clock Team
This newsletter is provided for educational purposes only and does not constitute investment advice. It is not intended as a solicitation to buy or sell any assets, and readers are strongly advised to conduct their own research and seek independent financial advice before making any investment decisions. The authors and publishers disclaim any liability for any direct or consequential loss arising from any use of the information contained herein.