This article is reprinted with permission from "Talking About Li", author: Talking About Li, copyright belongs to the original author.
Recently, Ethereum continues to attract more and more attention, with prices reaching as high as around $4,700, as shown in the figure below. In this cycle, we have been watching BTC continuously refresh its historical highs, and now, the king of altcoins, ETH, is finally close to its historical high of $4,800.
Additionally, from the perspective of TOTAL2 market capitalization, it has also reached around $1.6 trillion, as shown in the figure below.
Now that Bitcoin is approaching historical highs again, Ethereum's price is strongly rebounding, and TOTAL2 market capitalization is also rising overall, it seems to indicate the arrival of a new round of altcoin opportunities.
Last month (July), when some altcoins began to show signs of rebound, many people were still skeptical and fearful. However, with ETH's strong breakthrough in the past two days, everyone's emotions seem to have really improved. Through the messages in the backend, I found that some friends have shifted from a mindset of doubt and fear to one of missing out on opportunities. However, from a psychological perspective, once a mindset of missing out is displayed, it also signals a new danger.
For example, in the messages from the past few days, some people asked me: Can I still buy ETH at $4,400? Will Ethereum rise to $10,000 this year? Such questions remind me of April this year when ETH dropped to $1,400, and people were asking me if Ethereum would fall to $800.
Seeing a rise, people ask if it will continue to rise more? Seeing a drop, people ask if it will continue to drop more? If an investor has no personal goals, plans, or trading strategies, and just wanders aimlessly in the market waves, lingering between rises and falls while hoping for affirmation from others, then not only might they miss various market opportunities, but even if they are lucky enough to seize a few opportunities, they are likely to give them back later.
Take the above question as an example. If you firmly believe through some dimensional analysis that Ethereum can rise to $10,000 this year and are willing to take that risk (i.e., putting in a position that you can afford the corresponding risk, or you have already formulated a corresponding profit-taking and stop-loss plan), then don’t say $4,400 ETH, you could even buy ETH at $6,400. To put it bluntly, as long as you stay within your risk tolerance, buy those assets that you can understand and hold according to your goals.
Everyone's risk tolerance and situations are different; opportunities often depend not on what others say, but on how you think and act.
As more and more retail investors miss out on Bitcoin opportunities, they are now continuing to miss out on Ethereum opportunities. According to market rules and human nature, if the current market rhythm can continue, as long as institutional demand remains stable, with ETH's price continuing to rise and breaking previous highs, some institutional funds/smart money will begin to flow into areas like L2 and DeFi. Therefore, before the end of this year, it is indeed possible to drive a larger phase of altcoin opportunities, which will lead more retail investors to be in a FOMO state and unable to resist chasing high prices.
In fact, doing good trading boils down to one key point: clarify your risk preference, set personal goals and position plans based on time frame dimensions, then customize corresponding execution strategies, and strictly maintain discipline in execution while doing reviews and optimizations.
- Significant Changes in Exchange Stablecoin Supply
Let’s continue to look at the overall market situation from the perspective of stablecoins. Currently, the global stablecoin market capitalization has surpassed $270 billion, far exceeding the previous bull market peak of $180 billion, as shown in the figure below.
From the perspective of exchange stablecoin supply, after continuous growth and creating new highs since April, there has now been a noticeable rapid decline, as shown in the figure below.
On one hand, Bitcoin is approaching historical highs again, Ethereum's price is strongly rebounding, and some altcoins are also rising, but on the other hand, the supply of stablecoins on exchanges is starting to decline significantly. Doesn’t that seem interesting?
There could be many reasons for this. Besides indicating that stablecoins have entered a new rapid development mode (as stablecoins now have many uses), there are several possibilities:
- Funds have already reacted to the prices of certain cryptocurrencies (such as the recent rise of ETH).
- Funds are beginning to shift to off-chain or other platforms (such as custodial institutions, DeFi protocols, etc.).
- Recent price increases have led to new risk-averse sentiments among some funds.
- Expectations of interest rate cuts have led to changes in dollar liquidity (which in turn affects the supply of stablecoins like USDC on exchanges).
- And so on…
Theoretically, if the supply of stablecoins on exchanges decreases, it could lead to some liquidity issues. Therefore, exchanges should have some countermeasures, such as increasing stablecoin subsidy yields to attract more funds or making necessary operations regarding their own platform tokens.
Just a few days ago (August 11), Binance suddenly launched a USDC wealth management activity, where purchasing $100,000 in USDC can yield a 12% annualized return, as shown in the figure below. This has garnered significant attention on social media in recent days, and I’ve seen many people sharing images and starting to deposit USDC into Binance for wealth management. Now, if we connect Binance's new activity with the above situation, it also seems quite interesting.
I remember last month (July), I saw a comparison chart of Bitcoin and stablecoin supply in Binance, as shown in the figure below.
From that chart, we could clearly see that the supply trends of Bitcoin and stablecoins in Binance showed a certain correlation in 2024. However, by the end of last year, the situation began to change, with stablecoin supply significantly increasing while Bitcoin supply decreased sharply. Since the beginning of this year, although the supply of stablecoins has remained within a certain range, the situation of Bitcoin and stablecoins has remained decoupled, especially Bitcoin, which has shown a noticeable downward trend.
At that time, we had two guesses: on one hand, stablecoins in exchanges seemed to be waiting for volatility opportunities, and on the other hand, a large amount of Bitcoin was being withdrawn from exchanges (investors were continuously accumulating Bitcoin).
From the market performance in the past month, our earlier mention of "funds have already reacted to the prices of certain cryptocurrencies" seems to be quite relevant, because we do not have access to the internal data of exchanges, so we will not discuss the causal relationship here, but simply make a small guess: since July, as the supply of stablecoins on exchanges has decreased, the prices of ETH and other altcoins have significantly risen, which may indicate that some stablecoins have been used to purchase these assets.
Of course, we do not rule out that the rapid decrease in exchange stablecoins is also due to other reasons, such as the aforementioned "funds beginning to shift to off-chain or other platforms," etc. Because from public data, we can also see that recently Binance has experienced a noticeable net outflow of stablecoins, as shown in the figure below.
Next, regarding the trend of market changes, we might continue to focus on the flow of funds (including changes in exchange funds and ETF funds).
In summary, with more and more institutions deeply participating and speculating, regulatory follow-ups continuing to alleviate concerns about large capital, the new DeFi 3.0 era is reviving and attracting more funds on-chain… some historical rules are being broken, but some rules will still be effective. The difference is that the crypto market may become longer and more volatile than ever before.
- Opportunities and Risks Always Coexist
Now many people have missed out on Bitcoin and Ethereum, so they will continue to place their hopes on other altcoins. Coupled with the rhythm driven by some KOLs and various new wealth cases circulating in small circles, some people's FOMO emotions are starting to rise. Thus, what to buy to become the next wealth code has become the answer that many people are consulting and pursuing. However, many people are merely chasing answers, often overlooking the risks that may lie behind those answers.
I remember in 2017, BTC rose from April to December, reaching a peak of around $20,000 on December 17. BTC.D also fell from 70% to around 40% within a few weeks, marking the comprehensive strengthening of altcoins. Altcoins continued to rise for almost a month, but then their prices began to fall rapidly, with many cryptocurrencies dropping by 20%-30% daily. That year, since I had just entered the space, I ended up losing my principal after a brief period of floating profit, but fortunately, I hadn’t invested too much at that time.
By the time of the 2021 bull market, after experiencing the ups and downs of the 519 incident, BTC rose again from May to November, reaching a peak of around $69,000 on November 10. During that cycle, Musk was very active in the crypto space, and DOGE became very popular, attracting many outsiders into the market. Later, as BTC.D fell rapidly, ETH and many altcoins experienced explosive growth. For a brief period, it felt like anyone could make money just by randomly buying altcoins on Binance with their eyes closed. However, after about a month of peak excitement, the market suddenly reversed, leading to a new round of comprehensive collapse, with bankruptcy news flying around and panic spreading.
In the previous two bull markets I experienced, the rules and patterns of the crypto market were quite clear. For example, BTC usually completes its rise first and dominates, then ETH starts to rise, driving the rotation of the altcoin sector, and finally, after about a month of chaos, the bull market abruptly ends.
From the current overall market trend, it seems to still follow some of the previous structural rules. However, due to some macro changes, institutional fund speculation, and other factors, there have been many interludes and differences. For instance, after BTC completed its rise, the SOL ecosystem replaced the ETH ecosystem and gave birth to a super on-chain casino. But as the casino bubble phase ended, the market began to return to fundamental speculation, and now ETH is moving towards historical highs under institutional fund speculation.
As mentioned above, if the current trend continues, we may see a new round of altcoin opportunities before the end of this year. However, at the same time, we have also pointed out in previous articles on altcoin topics that, unlike the comprehensive altcoin opportunities in the previous two bull markets, there are too many altcoin projects or coins born during this cycle, leading to significant dilution of liquidity. Therefore, if you still wish to participate in altcoins, it is advisable to prioritize those leading projects with good fundamentals and compelling narratives (imagination space, speculation space).
Moreover, due to limited and diluted liquidity, the phase of altcoin opportunities in this bull market will be shorter. Don’t expect that funds will immediately flow into altcoins after the Federal Reserve cuts interest rates this year. To be honest, from the perspective of institutional funds, even if some funds flow into the crypto market, they will definitely prioritize coins that have already been approved through ETFs or top market cap projects, rather than buying small-cap altcoins to lift retail investors.
Of course, as market sentiment improves, it is not ruled out that a small portion of funds will flow into medium or small-cap altcoin projects for speculation. However, it is important to understand that this kind of speculation will be faster-paced, and you will be competing against the project operators or the speculative institutions behind them. If you believe your chances of winning are low, do not easily risk your capital against a stone, even if the other party makes it seem like a "gem."
In summary, opportunities and risks always coexist. The bull market of 2025 will have significant differences in capital structure compared to the bull markets of 2017 and 2021. More and more institutional investors are deeply participating. Although institutions like BlackRock primarily purchase BTC and ETH through over-the-counter transactions (to reduce the volatility of mainstream coins in the market), the following sentiment among small institutions and retail investors will only increase.
In our article on July 30, we mentioned: a major bull market still requires a larger bubble, and more and more institutions are creating a new massive cyclical bubble through cryptocurrencies. However, this frenzied behavior of institutions ultimately needs to be taken over by a large number of retail investors, and in this market, the ultimate big winners can only be a few.
In investing, you should buy and sell in batches according to your preferences, pace, and goals. "Base positions" and "active positions" can be considered separately. There is no need to worry about selling everything at the peak; instead, you should choose to sell (in batches) when prices rise because once prices start to fall, you may not be able to sell. Not everyone has the precision and courage to bet their entire fortune on a small segment of an altcoin. Even for the king of altcoins, ETH, regardless of whether it has the opportunity to rise to $6,000 or even $15,000 by the end of the year as some claim, it is definitely correct to start selling active positions in batches once it reaches your target. Always prepare a Plan B for yourself (a plan for what to do if the expected target is not reached).
Related: Ethereum (ETH) Hits Multi-Year High, Tom Lee's BitMine Plan Raises $20 Billion in ETH
Original text: “Ethereum is about to break historical highs, exchange stablecoins drop sharply”
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
