Avi stated that over time, each day becomes more suitable for purchasing Bitcoin.
Compiled by: Deep Tide TechFlow
Guests: Jonah Van Bourg, crude oil & crypto trader; Avi Felman, host of 1000x Podcast
Podcast source: 1000x Podcast
Original title: Are We Still In A Bull Market?
Broadcast date: February 25, 2025
Key Points Summary
This episode of the podcast mainly discussed the following points:
- Market Volatility and Strategies
The market is experiencing severe fluctuations, making it difficult for traders to profit through traditional means.
Short selling has become the primary strategy, especially against altcoins and projects affected by negative news.
Bitcoin is oscillating at high levels, with the market lacking a clear trend.
By the end of the year, BTC may reach $150,000.
- Macroeconomic and Policy Influences
The stablecoin legislation and uncertainty before the elections are seen as potential market catalysts.
Trump's policy direction has a significant impact on market sentiment and the performance of risk assets.
- Bitcoin and Altcoin Divergence
Bitcoin is performing steadily and is viewed as a safe-haven asset.
Altcoins are generally weak, but some projects (like MakerDAO and Solana) have shown short-term volatility due to specific events.
- ETH/BTC Trends and Bybit Hacking Incident
Bybit experienced a hacking incident, but the market's reaction was relatively calm, and ETH's price did not see a significant drop.
The long-term narrative for ETH (such as RWA and stablecoin ecosystems) may drive its price rebound.
- Future Market Expectations
Stablecoin legislation and macro policy changes (like interest rate declines) could become turning points for the market.
Altcoins may enter a "altcoin season" in the context of regulatory easing.
How to Survive in Volatility?
Avi: The price fluctuations in the market this year have been extremely intense; the price movements over the past two months have been crazy. How are you coping with this situation?
Jonah:
This year's market has made it difficult for me to profit through traditional methods; the only strategy that has made me money is* short selling*. Trying to go long on Bitcoin has not been successful, with Bitcoin's increase only about 1% from the beginning of the year to now. Going long on altcoins has been disastrous.
The market is in urgent need of a catalyst to drive prices up. It currently feels like the market is in a stagnation period, caught between election day and the passage of some stablecoin legislation. I've been keeping an eye on developments in Washington because I believe the next major catalyst may emerge from there.
Avi:
That's true; traders are accustomed to looking for trends. If you look at Bitcoin's daily chart, you'll see that from November last year to December 17, we experienced a trend upward, followed by a market correction, then another two weeks of increases, and then two weeks of declines. However, the market has shown almost no significant fluctuations over the past month, during which there have been many "false breakouts."
Bitcoin's price has repeatedly approached $98,000 and attempted to break through, while also falling below $95,000 multiple times. In this situation, traders tend to buy or sell at these points. However, the market has now shrunk from a larger volatility range to a smaller one, and many people are still trying to trade based on the previous larger range, while in reality, the market has entered a consolidation phase.
My advice is that unless you focus on* short selling* altcoins or find some* arbitrage opportunities*, now is not a good time to trade. There have indeed been some arbitrage trades performing well recently, such as Tao showing good performance, and Maker has also performed well recently.
Short Selling the Current Market
Jonah:
I've been repeating the same point lately: short selling remains a good strategy in the current market. For example, when a project is exposed as a scam, the coin price may not have reacted yet. At this time, short selling can provide an opportunity for profit, as the coin price usually declines afterward.
Avi:
There are indeed some potential opportunities in the current market, as long as you can maintain enough focus. For example, Solana is a typical case, performing very poorly since the beginning of the year.
First, it rose from $183 to nearly $300, mainly because Trump launched a meme. When such hype occurs, we need to think about how long this frenzy can last and how many of those who bought in during this process will hold Solana long-term. The answer may not be optimistic.
Jonah:
I agree with your view. However, I also think this could be a turning point. Some investors may sell Ethereum and turn to Solana as the next L1 choice. But overall, the core users of cryptocurrency seem to be fatigued with the current market, and many are exiting. Those who should have been active traders driven by news are now exhausted. Their strategies have not worked, and the anticipated "altcoin season" has not arrived, leading to disappointment and selling in this asset class.
Avi:
That's a great observation. Similar trends can also be seen in the charts. If you do an interesting study, you could look at how many coins' prices have actually risen since Trump was elected.
Jonah:
Probably very few. The current market state is neither purely a* bull market* nor purely a* bear market*; rather, both coexist. Bitcoin remains in a bull market, but many other coins are experiencing a brutal bear market. The crypto industry seems to struggle to cope with this divergence, as we still use the term "crypto" to broadly describe all assets, while Bitcoin is seen as the benchmark for the entire market.
Avi:
Indeed. This divergence makes me more optimistic about the long-term prospects of Bitcoin and other mainstream coins. If you can hold on during a bear market, there will be more opportunities in the future. Market peaks usually occur when there are no buyers, and right now we are in the fear zone of the "fear and greed index," even though Bitcoin is close to its historical highs. This makes me feel that once we get through this downturn, there is still significant upside potential ahead.
Jonah:
I believe that once the stablecoin legislation is passed, many Web 2.0 companies will begin to lay out their plans in the crypto space, and the market may welcome a new round of prosperity. But until then, those crypto investors who are eager for quick gains may continue to feel disappointed. We no longer have the joy of quickly profiting as we did before, as the market environment has completely changed.
Bitcoin's Poor Performance
Avi:
From a technical analysis perspective, Bitcoin has been performing poorly recently. A few days ago, Bitcoin's price fell below the MA100, and last Friday, this moving average became a strong resistance level. Generally, moving averages can serve as important indicators of market momentum. When investing or trading Bitcoin, the two key points are to assess market momentum and find price value. Bitcoin is a trend asset, and investors typically follow the trend to buy when prices rise; or they will choose to enter when they believe the risk-reward ratio is favorable.
The focus is on how to assess risk and reward. One way to assess risk and reward is to refer to the common price targets in the market. For example, look for a 2:1 risk-reward ratio (i.e., potential gains are twice the risk). For instance, before Trump was elected president, I predicted that $150,000 would be an attractive value range, because at that time, the common target in the market was $100,000. Investors have similar logic: "If all goes well, after Trump is elected, Bitcoin is expected to reach $100,000." Although the market may not break through this target on the first attempt, investors can set their stop-loss point below $145,000, thus forming a reasonable risk management strategy.
The current question is, what are everyone's targets for Bitcoin? Where is a reasonable annual target? How can investors find value ranges and set stop-loss points? The market consensus I hear is that Bitcoin could reach $150,000. Compared to optimistic predictions like $250,000 or $500,000, this target seems more realistic. If all goes well, I believe reaching $150,000 by the end of the year is possible. Based on a 2:1 risk-reward ratio, the stop-loss point would be around $75,000. For Bitcoin to rise further, the market will need either at least $20 billion in funds, legislative support for widespread Bitcoin allocation, or large-scale purchases of Bitcoin by the federal government as a reserve asset. Otherwise, Bitcoin's price may continue to consolidate.
Another way to assess value is to observe how long Bitcoin's price stays within a certain range. If the price can maintain above $90,000 for three to six weeks, many investors may consider this a reasonable trading range and look for buying opportunities between $85,000 and $90,000. Bitcoin had a consolidation period of 200 days in 2024 (almost six months), which led investors to view that range as a stable value point. Currently, Bitcoin has only spent 92 days in the $90,000 range, and it may need to consolidate for another 90 days to form a new value perception.
So my view is that over time, each day becomes more suitable for purchasing Bitcoin, but I am not in a hurry to buy in large quantities.
When will the turning point in market sentiment arrive?
Jonah:
If your investment time frame is short, then there is no need to rush in. But if your time frame is longer, you may need to seize opportunities. If state governments in the U.S. start allocating Bitcoin, the total assets managed by state and local government pension systems are substantial, amounting to $6.25 trillion, while the total assets managed by U.S. public pension funds reach $30 trillion. If they decide to allocate 1% of their funds to Bitcoin, that would mean hundreds of billions of dollars flowing in, which is a massive number.
We often focus too much on whether the federal government will hold Bitcoin, neglecting the potential impact of local governments and pension funds. I believe that over time, more and more funds will gradually flow into the Bitcoin market. It is this gradual influx of funds that gives me confidence in Bitcoin.
We may suddenly see a crazy surge in the market, but the reasons behind it may not be clear. This has happened in other asset classes as well. The inflow of funds can shift from a trickle to a torrent, followed by a price breakout.
However, there is currently a strange emotional gap between Bitcoin and other assets. Bitcoin shows strong adaptability and bright prospects, while other assets appear relatively sluggish. I believe that when people feel despair about altcoins in the darkest moments, it is often the dawn before the market.
Avi:
I am actually very optimistic about Bitcoin's dominance over altcoins. The current market environment is very favorable for Bitcoin's performance.
There are two reasons. First, altcoins have experienced significant pullbacks, with many altcoins erasing almost all gains from the Trump era. At the current price level, selling pressure has significantly decreased because many people have already exited. I have observed that some altcoins rebounded 20%-30% after hitting bottom on February 9, but then all retreated again. Currently, these altcoins' prices have returned to the levels of February 9, and there may not be many sellers left in the market.
I still hold some altcoins, although the scale has decreased compared to last week, but I believe they have excellent teams and products behind them. However, historical experience shows that assets that perform well during downturns often lose their advantage during uptrends because they attract too much capital in the short term, leading to limited subsequent performance. Unless assets like LTC can quickly gain ETF approval, their performance may be constrained.
Jonah:
Your point is indeed a counterintuitive narrative. We usually think that highly liquid assets perform poorly during market downturns because market declines lead to reduced trading activity and decreased liquidity.
Avi:
That's a good theory, but actual market behavior is not like that. During market downturns, liquid assets tend to perform better because investors tend to view them as safe havens. However, when the market warms up, funds may shift from these "safe assets" to other areas.
Bitcoin in a Multipolar World
Jonah:
Last Friday, S&P 500 futures fell sharply, marking the largest drop since 2025. Although the stock market also experienced similar violent fluctuations in 2024, overall, the market has become more unstable. In contrast, Bitcoin did not crash like the S&P 500; instead, it appeared relatively robust. Of course, this is just one day's data, and we shouldn't overinterpret it.
Avi:
This is an interesting phenomenon. From a technical chart perspective, Bitcoin has performed quite well relative to the Nasdaq and seems to have found a bottom. Currently, the ratio of Bitcoin to Nasdaq is 4.43, while the bottom is around 4.35. Previously, we saw a slight pullback on the weekly chart, with a low of 4.25, but the overall weekly chart looks very robust and has a reasonable stop-loss point. While I cannot pinpoint exactly why Bitcoin is performing so well, I believe it may be related to the poor performance of the stock market.
What do you think is the reason for the poor performance of the stock market?
Jonah:
The decline in the stock market is mainly related to market fears about tariffs. Although this is just one day's data, Bitcoin did not crash in this situation, which gives us some insights. If a major trade war breaks out in the future, Bitcoin may trade in a new way—more like an alternative reserve currency rather than a risk asset affected by trade barriers and tariffs.
In a multipolar world, as the global economic landscape gradually shifts from a single dollar system to diversification, there is indeed a need for a non-dollar alternative reserve currency. And Bitcoin may be such an option.
While it is still early to draw conclusions, I always feel excited when Bitcoin performs well in situations of tariff fears.
As traders, one of our biggest dreams is to profit during those rare market moments, which may only occur every two to four years. For example, for oil traders, 2020 and 2022 were such moments. And for Bitcoin, now may be such an opportunity.
If a major trade war really breaks out in the future, and the stock market crashes, governments may start accumulating Bitcoin at the federal level, incorporating it into their balance sheets or central bank reserves to support global trade. In a multipolar world, if the influence of China, the U.S., Russia, and Europe gradually diverges, non-dollar-denominated transactions in global trade may significantly increase.
Currently, only a few countries, such as Iran, Venezuela, and North Korea, rely on Bitcoin for transactions. But if the global political landscape undergoes significant changes, and NATO alliances are restructured, more countries may need Bitcoin to complete international transactions. In this case, the demand for Bitcoin will no longer be limited to a few "marginal countries" but will expand to more mainstream economies, and as this demand increases, Bitcoin's price may see a significant rise.
If this happens, Bitcoin will no longer just be the beta of the stock market but will become a true alpha, representing assets that outperform the market, marking a glorious moment for the cryptocurrency market.
Trump's Impact on the Market
Avi:
Why is the stock market performing poorly while Bitcoin is doing well? I think it can be summed up in one word: uncertainty. Before Trump took office, I thought he would be very favorable to the business environment, such as cutting regulations, creating a fair business environment, and attracting a large influx of investment into the U.S. But it turns out that Trump's performance has been more unpredictable than many expected. In his second term, his actions have become more aggressive, adopting many unexpected policies.
For example, from potentially laying off a million federal workers to imposing tariffs on countries like Canada, these measures, which were originally thought to be mere campaign slogans, have become reality. Additionally, issues like Trump's relationship with Russia and his cold attitude towards European allies have also made the market uneasy. The market has always hated uncertainty, while Bitcoin seems unafraid of this chaos. On the contrary, Bitcoin performs even stronger when the global situation becomes increasingly uncertain. Businesses are struggling to adapt to a future full of variables, while Bitcoin seems to declare: "Chaos is good for me."
In the past, countries like the EU, Canada, and Mexico might wait for the U.S. stance on Bitcoin before making decisions. But now, countries tend to make independent decisions, which makes Bitcoin's role in geopolitics even more important. If you believe the U.S. will support Bitcoin, you should enter the market early. The current world is becoming more adversarial, and this situation may be favorable for Bitcoin but undoubtedly poses a greater challenge for the stock market.
Jonah:
This should stay in the minds of every crypto trader because Bitcoin is actually a macro asset. During Trump's first term, the stock market hit new highs repeatedly, and everyone referred to it as the "Trump market." He always boasted on Twitter about the stock market's performance during his tenure. However, he may have changed his focus, and the stock market is no longer his core metric of concern. If his focus shifts to lowering the yield on ten-year Treasury bonds, this could be bad news for the crypto market.
Avi: Why is lowering the yield bad for the crypto market?
Jonah:
If he is only focused on stabilizing the bond market and ensuring U.S. sovereign credit remains as stable as possible, that means ending deficit spending and the government's massive cash release. This could lead to a tightening of the money supply, which would weaken liquidity in the capital markets and suppress demand for speculative assets. The crypto market needs a loose monetary environment, and Bitcoin typically performs well when M1 money supply (i.e., cash in circulation and demand deposits) increases significantly, but it would be suppressed under tightening policies.
Avi: But he has repeatedly stated that his goal is to lower interest rates.
Jonah:
I think he is more focused on lowering short-term rates rather than adjusting the ten-year yield. If the U.S. adopts a sovereign austerity policy similar to Greece in 2012, by cutting federal spending to improve the balance sheet, this could have a huge impact on the market. However, I don't think Trump will fully follow this path.
Trump's Presidential Term Planning
Jonah:
During Trump's first term, he was very focused on stock market performance, viewing it as his key performance indicator (KPI). However, the biggest concern is that he may adopt extreme austerity measures, plunging the government into a painful economic recession. However, I believe the final outcome may fall into a middle ground.
Trump may pay attention to the stock market performance during Biden's term, such as the S&P 500 index reaching multiple historical highs with an overall increase of over 20%. However, these achievements have not brought Biden much political benefit. On the contrary, inflation has left the middle class dissatisfied, and housing prices have become increasingly unaffordable. Based on these lessons, Trump may avoid plunging the country into a full-blown tightening, but he also won't push the stock market aggressively. I believe we will enter a compromise state.
I think he will take this into account, likely not allowing the country to enter a tightening phase, but also not fully committing to boosting the stock market.
Trump may cut a large number of government jobs, leading to an increase in unemployment and a loosening of the labor market. This change could trigger volatility in risk assets. Risk assets typically refer to high-yield but high-risk investments such as stocks and cryptocurrencies, whose prices are easily influenced by policies and market sentiment.
This impact may extend to multiple areas. For example, my mother's neighbor is a neuroscientist working at the University of California, Berkeley, whose research project has just had its funding cut by the NIH (National Institutes of Health). This is the first time in decades that such a situation has occurred, leaving many researchers frustrated. Similar funding cuts could lead to professors leaving, research projects being halted, and further job losses. At the government level, a reduction in jobs related to the federal government could also affect the real estate market, as unemployed individuals may sell their homes rather than buy them.
Next, I believe Trump may push for negotiations on a ceasefire agreement in Ukraine. This move could lead to rising commodity prices but may also cause the Consumer Price Index (CPI) to decline, thereby alleviating inflationary pressures.
Avi: If that's the case, then now is a good time to buy Russian stocks.
Jonah:
Indeed, for example, one might consider shorting oil prices and liquefied natural gas. I believe that a decline in inflation will pave the way for the Federal Reserve to cut interest rates, and as inflation slows, the prices of risk assets will gradually stabilize, potentially leading to a real rebound in the market after interest rates decrease. However, we are still in a painful adjustment phase.
I think a decrease in interest rates will drive cryptocurrency prices up significantly, while the stock market will also gradually recover. About 6 to 12 months into Trump's term, we may see large-scale regulatory easing, which will be a "golden period" extremely friendly to businesses.
However, the current business environment is still full of uncertainty, and many people feel frustrated about the future. If you plan to start a business or invest, now may be an excellent time, as once regulatory easing begins, the stock and cryptocurrency markets could experience a frenzy.
At the same time, the productivity gains from AI technology will gradually become apparent in this process. We discussed the potential of deep research last week, and I believe the application of AI will lead to sustained cost reductions (i.e., deflationary effects), further driving stock and cryptocurrency prices to new highs. In such a super-bullish market context, Trump may leverage market optimism to increase the fiscal deficit, raise tariffs again, and achieve his policy goals through a loose capital market environment.
However, this environment may lead to a decline in the value of corporate bonds and government bonds, while Bitcoin may rise further due to a weakening of confidence in the dollar. We are currently in the first phase of this clear but difficult path.
Avi:
Let's analyze this point by point. First, Trump cuts a large number of government jobs, leading to rising unemployment, a loosening labor market, and volatility in risk assets. I think the probability of this is 85%, and then we will see a market correction.
Second, regarding the achievement of a ceasefire agreement in Ukraine, I checked the prediction data from Polymarket, which shows a 33% probability of a ceasefire agreement being reached within the next 90 days, and a 46% probability of elections being held in 2025. Additionally, the probability of a ceasefire agreement between Russia and Ukraine in 2025 is 70%, indicating that my previous judgment on this event was incorrect.
Next, if interest rates decline, cryptocurrencies may see significant increases, and the stock market will gradually recover. However, I am concerned about inflation data, as these figures may not fully meet our expectations.
Jonah:
If we assume that the first and second points hold true, for example, a large number of government workers are laid off, leading to rising unemployment, while the war in Ukraine ends, commodity prices, as a major component of the CPI, will significantly decline. In this case, the inflation issue may be alleviated, and the rise in unemployment will provide a strong justification for the Federal Reserve to cut interest rates.
Avi: It depends on the drivers of inflation, especially the impact of commodity prices. If we can see more data, are there other factors driving inflation?
Jonah:
Labor costs are also a key factor. In the CPI, energy costs and labor costs are two major variables. If oil prices drop to $45 per barrel, after the end of the Ukraine war, OPEC (Organization of the Petroleum Exporting Countries) may engage in a price war, as the production cut agreements will fail, potentially leading to an oversupply of oil in the market.
Avi:
If interest rates decrease and energy prices fall, cryptocurrency prices will rise, and the stock market will gradually recover. In this scenario, altcoins may perform particularly well, while Bitcoin's performance may be relatively weaker. This is because the easing of geopolitical tensions will enhance market risk appetite, increasing demand for altcoins. However, Bitcoin will also rise in this situation, and the real winners may be Solana and Ethereum.
Next comes large-scale regulatory easing, and the stock and cryptocurrency markets will experience a frenzy. This may be a subtle process, not necessarily a standalone policy event, but gradually becoming a background factor in the market.
Interestingly, in 2023, someone mentioned on Twitter that AI would have a huge impact on NASDAQ. At that time, ChatGPT had just been launched, and people had not fully realized its potential. I believe our judgment at that time was correct, as NASDAQ's growth indeed benefited from the widespread application of AI.
Regarding the deficit issue, I am somewhat puzzled. In a world where spending can be cut, why would there still be a persistent deficit?
Jonah:
My view is that if commodity prices continue to decline, along with the deflation and productivity gains brought by AI, this will not only benefit tech companies but even traditional businesses can benefit from reduced labor costs. The Russell Index and the S&P 500 will also benefit from this.
In this positive scenario, Trump may take some measures that are unfavorable to the stock market, such as threatening to impose tariffs on hostile countries or disrupting global trade. As for the deficit issue, if the economy performs well, the government can comfortably cut taxes and continue spending. But if the economy falls into recession, this approach will not work.
So, I believe Trump will cut a lot of redundancy and positions. We know that most of the government's spending is primarily on four areas: Social Security, Medicare, defense budget, and current interest payments. These are all difficult to cut. Therefore, what Trump can cut may only be waste, fraud, and abuse, many unnecessary real estate expenditures, and similar items. But if he wants to cut Social Security, Medicare, or the defense budget, it would require broad bipartisan legislation, or even a real transformation in the U.S.
So we will be in a world of deficits for a while, and if everything else is running well, the government will feel comfortable with it.
Avi:
I think it will be difficult for Trump to turn back on the deficit issue. One of his core campaign promises was to reduce the deficit, cut waste, and create economic activity through the private sector. I think he is more likely to take radical cuts rather than significantly increase spending.
I believe tax cuts may occur in a way that exceeds spending cuts, and the two levers he can use are: cutting a large amount of spending and lowering taxes to balance the budget. What he is very focused on is managing the U.S. economy like a business.
Jonah:
If what you say is true, as an American patriot, I hope you are right, but as a Bitcoin holder, I hope you are not right. If he significantly cuts the budget to achieve balance, that would be a real recession. The market would crash because deficit spending currently accounts for 7% of GDP. If this is cut down to 2% or 0%, it would be disastrous.
Avi:
What I mean is not that we continue to have a deficit every year, but that the deficit will expand. So I think he is actually unlikely to balance the budget; I just mean he is unlikely to take any measures to accelerate the growth of the deficit.
Jonah:
My conclusion is this: avoid bond investments, short the commodity market, and go long on stocks and Bitcoin. I think this is my ideal investment portfolio composition.
Additionally, I had not seriously considered how these situations would affect altcoins before. However, you raised a good point: if these trends really occur, we may welcome a very strong "altcoin season." Especially in the context of regulatory easing, these altcoins may perform particularly well.
Bybit Hacked: Market Reaction to ETH/BTC
Avi:
The scale of the Bybit hacking incident is shocking, but Bybit's attitude towards this event is very calm. Although this is a large-scale exchange hacking incident, it seems that no users have suffered financial losses as a result. Bybit appears to be actively addressing the issue, and their operational capability is impressive.
However, what interests me most is the market reaction to ETH/BTC. When I saw the news headlines, my first reaction was to short ETH and sell part of my holdings. Sure enough, ETH's price dropped by about 2% in a short time. But what surprised me was that ETH quickly rebounded and maintained that level without further decline. Meanwhile, BTC's price even rose by 1%-1.5% on the day of the incident compared to before it occurred.
This market performance is very unusual. Logically, if $1.5 billion in funds were stolen by hackers, the market should have experienced greater volatility. However, ETH's price did not hit a bottom, indicating that it seems no one in the market is willing to continue selling ETH.
I have also recently researched some dynamics regarding ETH. According to reports, there are currently 50 non-crypto companies developing projects based on Ethereum. However, most projects are limited to the NFT space, and there is not much truly exciting content. The only somewhat interesting development is Lamborghini launching an NFT project related to the metaverse, but this is no longer at the core of the Ethereum ecosystem.
However, it is worth noting that most activities related to RWA are still concentrated on Ethereum. RWA is an important component of the stablecoin ecosystem, representing the second phase of the financial system's transition to cryptocurrency. Stablecoins are the first step, while RWA is the second step, followed by corporate token issuance and true decentralized protocols. I believe this could lead to a "short squeeze" phenomenon in the ETH market within the next year (i.e., short covering leading to a rapid price increase). If this happens, ETH's performance may outperform BTC and could even return to an ETH/BTC exchange rate level of 0.4.
If this situation occurs next month, I would not be surprised. According to trading experience rules: good news cannot drive the market up, and the market will not rise; bad news cannot drive the market down, and the market will not fall. Currently, ETH's price seems to have stabilized.
Jonah: But I have a question, why do you think this rebound will happen within a month? Legislation related to stablecoins may take 2 to 6 months to pass, which will bring a large influx of funds into ETH. Additionally, if North Korean hackers hold a significant amount of ETH, they might choose to sell it for cash, which could put pressure on the market, right?
Avi:
The two factors you mentioned are indeed worth considering. The first is that Bybit may need to buy back ETH to address liquidity issues, which would have a direct impact on the market. The second is that the price movement of ETH may be influenced by short-term market behavior, such as whether hackers choose to sell.
Overall, my attitude towards ETH is cautiously optimistic. First, ETH has a real market narrative supporting it, which usually attracts investors' attention before events occur. Second, the price of ETH did not decline further after this hacking incident, indicating that the market's selling pressure has weakened.
I believe traders like us will recognize this and may slightly reallocate some ETH positions.
Jonah:
I just feel uneasy about buying ETH.
Avi:
For the past year, I have treated ETH as a short asset in almost all my trades because its upward movement is always less than that of other assets, while its downward movement is greater. But now, at least for the next month, I will not short ETH anymore. I believe many traders may also stop shorting ETH at the current price level.
Jonah: So what asset are you using as a short asset to hedge risk now?
Avi: Solana, as there may be $2 billion worth of SOL unlocking on March 1.
Jonah:
Some of the unlocking assets may have already been priced in by the market. Unlike events like ETFs or the Trump election, unlocking events cannot be reflected in the price by purchasing enough assets in advance. Investors can choose to sell before the unlocking or not buy more Solana. Assuming the total unlocking amount is $2 billion, and $1 billion is sold. Out of this $1 billion, perhaps $50 million is sold directly at market price, while $250 million may have already been absorbed by the market in advance. So I don't think this is the "doomsday" for Solana, but I agree that now is definitely not a good time to enter and buy a large amount of Solana.
Original link: https://www.youtube.com/watch?v=xUlmvWQPTjY
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