Source: Coin Market Trader

After Trump won the election of the new US president, bullish sentiment in the crypto market was completely ignited, and Bitcoin surpassed $73,800, reaching a record high. Meanwhile, Ethereum, which had been dormant for a long time, also experienced a strong rebound, with a single-day increase of more than 12%, and the ETH/BTC exchange rate showed the biggest one-day increase in nearly half a year. However, due to the extreme volatility before the start of the bull market, and the market fermented very rapidly, many investors were short in the first phase of the rise, which also caused market sentiment to always be very anxious. So, should investors who are shorting or taking short positions go higher?

From a transactional perspective, once a trend is formed, it often has strong inertia. Normally, there are only two possibilities for the trend to change: one is kinetic energy failure; the other is external shock. As a result, the Bitcoin cluster will either enter a phase of accelerated rise (bulls catharsis) or collapse under the impact of a bearish downturn (sudden weakness). However, since January 2013, the world's largest entities have continued to increase their holdings of Bitcoin, and their holdings have risen from 22% to 35%. Among them, the share of US industrial capital holdings is as high as 25%. Without a major outbreak of bullish sentiment, these agencies simply wouldn't be able to complete shipments under market conditions where the daily turnover rate is only 2%-3%. Therefore, as long as the average daily turnover of the market does not reach more than 600 billion US dollars (currently around 120 billion US dollars), the trending market will not end easily. This also means that any buying before the peak of sentiment is right.

According to past experience, in a bull market, long-term holding and running high positions are considered to be the two key principles for reducing mistakes and maximizing profits.

First, the increase in every round of the bull market usually far exceeds expectations, especially during the main upward phase. The three-day increase can often withstand the increase of the past year. This is the principle of the so-called “infinite scenery at dangerous peaks.” Therefore, as long as the currency in your hands shows no signs of speeding up its peak, don't switch positions or leave the market easily. The experience of past bull markets shows that the biggest taboo in a bull market is frequent position changes, because if you step at the wrong pace, you are likely to fall into the trap of chasing gains and losses.

Second, in a generally rising market, investors have a high fault tolerance rate every time they take action. In a window with high win rates and high odds, the right thing for investors is to make full use of every penny in their hands so that they can generate as much profit for you as possible. Therefore, it is particularly important to keep high positions running for a long time. Of course, in order to cope with market changes, investors can use some of their positions as mobile positions and adjust their position structure flexibly while maintaining high positions.

In a cycle where risk appetite recovers, capital usually shifts from seeking absolute value to price elasticity. Therefore, since November 5, most of the currencies that have performed well in the market are small to medium capitalization currencies, such as ETH, SOL, UNI, AAVE, etc. Ethereum, in particular, is showing signs of a trend reversal, mainly reflected in two aspects: first, the ETH/BTC exchange rate broke through the downward trend line in nearly half a year; second, the US stock market first saw a situation where pensions bought an Ethereum ETF, indicating that the most conservative capital in the market has begun to accept ETH. In short, during the bull market phase, it is possible to obtain more excess profits by appropriately increasing positions in small to medium market capitalization currencies.

In terms of target selection, the market started its first wave. Investors did not need too much analysis; they only needed to follow the trend and easily outperform the market. Because the market is always right, capital always flows to where there is least resistance. The specific approach is to split positions among the top 10 currencies in market capitalization ranking on November 16, such as UNI, SOL, AAVE, etc. I really don't know how to do it; I can use ETH as the main source. After all, with all the bull markets in the past, you can get excessive profits by holding ETH.

Currently, the market generally anticipates that the regulatory system of the US crypto market will change significantly after Trump comes to power. In reality, however, this change may come sooner. According to Justin Slaughter, head of policy research at Paradigm and former senior SEC adviser, the Democratic Party may change its tough stance on cryptocurrencies after losing the election. From the perspective of fighting for crypto votes and gaining credit, the Democratic Party is fully motivated to ease restrictions on cryptocurrencies before Trump comes to power. Currently, the market generally believes that there are the following two main directions for deregulation: one is to exempt some projects from securities review; the other is to allow some projects to carry out POS pledge business.

Obviously, the former is certainly a major benefit for SOL and XRP, which are applying for ETFs; the latter will solve the problem that US Ethereum ETFs cannot enjoy pledged benefits. According to the Blockworks Research report, nearly 70% of Ethereum institutional investors participated in staking, of which 52.6% held liquid staked tokens (LST). This shows that staking Ethereum has become a source of revenue that cannot be ignored. For example, nearly 50% of ARK Invest's ETH holdings are Canadian 3iq Ethereum-backed ETFs. It is worth mentioning that ARK Invest itself is the initiator and manager of the US Ethereum ETF. If the problem of US ETH being unable to be pledged can be solved, this will greatly boost demand for US Ethereum ETFs.

According toTechnical analysisAccording to the theory, the upside to break through the box is usually 20%, which means that the target level for Bitcoin's new round of growth should be 73,000 × (1 +20%) = 87,600 US dollars. If you buy it at the current price, there is still a 15% theoretical profit margin. In terms of value for money, Bitcoin in this position is clearly inferior to most altcoins that have just launched.