Market Outlook: Opportunities and Challenges in the Coming Weeks

In the coming weeks, the cryptocurrency market may experience a period of high volatility. Spot positions may face significant retracements, and investors need to decide whether to hedge risks in advance based on their own circumstances. Although this period may feel uncomfortable, if one can hold on, the next wave of increases could bring significant profits for certain key coins, potentially even completely offsetting previous losses.

The market has not reached its end, and it is expected to enter a new upward phase in the next 4-8 weeks. This expectation is based on several factors, including Bitcoin's dominance remaining high, seasonal factors, the potential rise of the Ethereum/Bitcoin ratio, and market capital rotation. In addition, the government's relatively positive attitude towards cryptocurrencies and the low resistance in the macroeconomic environment theoretically create favorable conditions for the market.

In the next wave of price increases, investors should consider gradually shifting to a selling role. If they choose to continue holding during the trough period, their upcoming selling plan should gradually shift towards safer assets, such as Bitcoin and stablecoins. As the market cycle progresses, investors need to gradually reduce risk, decrease position sizes, and gradually exit the market through dollar-cost averaging, rather than liquidating all at once.

Regarding the upcoming market rotation, it is currently difficult to make a clear prediction. From now on, the market may be more suitable for traders rather than long-term holders. Certain cryptocurrencies may attract a large amount of buying, while others may rise slowly. It is challenging to determine in advance which cryptocurrencies or sectors will become the leaders in the market. From a rotation perspective, it seems that all cryptocurrencies will rise, but there is no overall upward trend.

Investors should not cling to cryptocurrencies to achieve unrealistic target prices. It is likely that many cryptocurrencies will not reach their historical highs again. While some mainstream cryptocurrencies may do so, a bull market does not mean that all cryptocurrencies will return to their historical peaks. If the portfolio is highly diversified, it is recommended to sell 50-75% or more of the holdings during the next wave of upward movement, when the rotation ends.

In the coming period, investors should try to consolidate their investments, reduce the number of new positions opened, and lower the overall variety of holdings. A significant pullback similar to the summer of 2024 may still be 3-6 months away. The market may enter a so-called "super cycle," but a cautious attitude is still necessary.

The task of investors is to continuously analyze data every week and constantly reassess the peaks and endpoints of market cycles. When the market starts to turn, things can become very complicated. Even when a bull market ends, many people will still believe that the bull market is ongoing. This situation is always difficult to predict, but vigilance is necessary. Do not attempt to predict the distant future; instead, accept market information and adjust strategies based on actual circumstances.

Finally, investors must do their own research, not blindly follow others' opinions, and independently analyze and manage their investment portfolio. Everyone's trading strategy is different, so do not rely entirely on others' exit strategies. If you can exit the market with a considerable profit, then you are already a winner.