Market Outlook: Pain and Opportunities in the Coming Month

In the coming weeks, the cryptocurrency market may experience a period of high volatility. Investors need to be mentally prepared, as spot positions may face significant drawdowns. However, this pullback could also lay the groundwork for future gains.

It is expected that the market may experience a new round of upward movement in the next 4-8 weeks. This expectation is based on several factors, including Bitcoin's dominance being at a high level, seasonal factors, the Ethereum/Bitcoin ratio potentially rising, and market fund rotation. In addition, the policy environment is relatively friendly, and there are fewer macroeconomic obstacles, all of which create favorable conditions for the market.

For investors who can withstand this tough period, the next wave of increase may bring substantial returns, possibly even enough to offset previous losses. However, during this surge, investors should gradually shift into a selling role. It is advised to gradually reduce risk, decrease position size, and exit the market gradually through dollar-cost averaging, rather than liquidating all at once.

Regarding market rotation, there is currently no 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 interest, while others may rise slowly. It is difficult to judge in advance which cryptocurrencies or sectors will become market leaders.

Investors should avoid clinging to certain cryptocurrencies in order to reach unrealistic target prices. It is likely that many cryptocurrencies will not touch their all-time highs again. While some mainstream cryptocurrencies may reach this, most may find it difficult to do so. It is recommended to follow market trends and take profits in a timely manner.

For investors with a diversified portfolio, it is recommended to consider selling 50-75% or more of their holdings in the next wave of price increase, once the rotation has ended. For example, when the AI sector rises, one might consider selling related cryptocurrencies; or when the price of tokenized real-world asset (RWA) cryptocurrencies rises significantly, it is advisable to take profits in a timely manner.

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. It is currently difficult to accurately predict the timing of the next significant pullback, but it may occur in 3 to 6 months.

The market may enter a so-called "super cycle", but caution is still needed. Investors should set reasonable risk management goals, such as controlling the drawdown of their portfolio from the historical peak to a maximum of around 30-40%.

Most importantly, investors need to continuously analyze market data and constantly reassess the peaks and endpoints of market cycles. When the market begins to turn, conditions can become complicated. Even at the end of a bull market, there will still be those who believe that the bull market is ongoing. Therefore, it is crucial to remain vigilant, accept market information, and adjust strategies based on actual conditions.

Finally, investors should conduct independent research and not blindly follow the opinions of others. Everyone's trading strategies are different, so do not rely entirely on the advice of others. If you can exit the market with a considerable profit, then you are already a successful investor.