Trader Dialogue Series: HighFreedom Discusses Crypto Assets Market Strategies and Outlook

HighFreedom is a cryptocurrency trader with a background in brokerage macroeconomic analysis. He shares his trading strategies, insights on the macro economy, and predictions for the future trends of the cryptocurrency market. Based on years of trading experience, HighFreedom has a profound understanding of Bitcoin, altcoins, and their relationship with traditional financial markets. This conversation also covers the growth path of novice traders and how to build a systematic trading logic.

All content is for sharing purposes only and does not constitute any investment advice.

1. About the trader HighFreedom

1. Trading Strategy

• Earning money in the right direction: During the bullish market, by holding Bitcoin and not moving it for a long time, you can earn profits from the overall market increase.
• Make money from volatility: Under the premise of controlling leverage, establish a coin-based long position after the BTC price falls into the appropriate range. Pledge Bitcoin to borrow some funds when the price is right, and then close the position after the price rises to increase the amount of Bitcoin held.

2. Reasons for Strategy Formation

• After experiencing several cycles, I believe this strategy aligns better with my risk preference and capital management strategy, effectively avoiding missed opportunities and reducing holding costs.
• In a high-risk, high-drawdown market environment, it is essentially similar to the spot strategy of buying high and selling low. The coin-based long strategy can avoid missing the main upward trend, but it is necessary to manage leverage position risks carefully.

3. Trading Strategy Logic

• Core: Combine directional returns with volatility returns, avoiding missing out on the overall increase while increasing Bitcoin holdings through volatility operations. During a bull market, use volatility tools to optimize holdings in a timely manner.
• Risk Aversion: By going long on coin-based assets, reduce the risk of selling too early and missing out on the market, especially in situations where the market suddenly rises quickly.

4. Expected Yield

• Long-term returns: During a bull market cycle, this strategy can achieve an overall return of 3-5 times.
• Drawdown Management: Expected drawdown control is around 20%-30%, with extreme cases potentially experiencing a 40% drawdown.

5. Considerations for Implementing Trading Strategies

• Leverage Control: Strictly control the leverage level, especially when the coin price is high or the market is volatile. It is recommended to keep the leverage within 50% to ensure a larger safety margin.
• Timing: When trading in coin-based long positions, it is essential to choose the right market timing. This strategy is most suitable for oscillating markets during a bull market. It is not applicable during rapid upward trends, as the cost of leveraging long positions is very high at market peaks or when the market is extremely hot, resulting in poor profit and loss outcomes for this strategy.

2. Macroeconomics, US Stocks, and the Coin Circle

1. The reasons and core concerns of "coin circle people" regarding the US macro economy.

• There are two types of trading entities in the market: on-market participants and off-market participants. On-market participants are usually experienced individuals in the coin circle, holding many coins but having less money. They focus on indicators such as the coin cycle, popular sectors, and on-chain data. Off-market participants enter the market through channels like spot ETFs, having more money but fewer coins, viewing Bitcoin as a risk asset and flexibly entering and exiting based on market liquidity. As the influence of off-market funds increases, it is essential to pay attention to the US stock market and the overall macroeconomic situation in the United States.

• The US stock market presents a pyramid structure, with the lower level consisting of money market funds and government bonds, and the upper level comprising high-risk, high-reward enterprises, where risk and return increase incrementally. The risk and return positioning of Bitcoin can be roughly compared to the Russell 2000 and ARKK, possessing certain fundamentals and growth potential, and is regarded as digital gold. Altcoins carry even higher risk, akin to high-risk stocks in the US market like GME and AMC(.

) 2. Determine the trend of the altcoin market through the logic of the US stock market

• When the price of Bitcoin rises to a certain level, some funds may shift towards higher-risk altcoins, triggering an altcoin market.

• The performance of altcoins fundamentally depends on the overall market liquidity. If high-risk U.S. stocks like ### ARKK, GME, AMC ( perform well, it indicates ample liquidity, and the altcoin market may experience an upward trend. Currently, liquidity is relatively tight, which may suppress the performance of the altcoin market.

• Recently, the market has experienced leveraged cleaning both on and off the exchange. July 4th was mainly a deleveraging process within the coin circle, while August 5th was mainly about the deleveraging of funds from the U.S. stock market ), which has little relevance to the coin circle itself. There is hope for a macro reversal, potentially leading to a new bull market cycle in the fourth quarter. However, there are differing opinions and controversies regarding future price increases.

( 3. Steps for Beginners to Learn Trading

• Basic Learning: It is recommended to take the CFA Level I exam, systematically studying the fundamentals of financial markets and mastering key skills such as macroeconomic analysis and industry analysis.

• Deliberate Training: Pay attention to market dynamics every day, analyze the reasons behind the Token rise rankings, and cultivate market sensitivity and trading intuition. Learn risk management, especially how to control leverage in a highly volatile market.

• Multi-dimensional analysis: In addition to fundamental analysis of the financial market, attention should also be paid to on-chain data, the fundamentals of different coins, etc., to build your own trading logic and system.

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( 4. Stop Doing List

• Excessive use of leverage: It is essential to strictly control leverage levels when trading on-chain. The cyclical effects of on-chain trading are significant, especially paying attention to the behavior of large coin holders.

• Over-reliance on indicators: With the emergence of spot ETFs, the effectiveness of on-chain indicators may be weakened, and investors need to continuously adapt to new market logic and changes. In the long run, if the macroeconomic logic changes, the indicators that investors focus on should also change accordingly.

3. Recommended Traders

1. Fu Peng: from Northeast Securities, has a deep understanding of USD assets, specializes in system analysis, and enjoys sharing insights.

2. Arthur@CryptoHayes: Has a deep understanding of the US macroeconomics. Although the wording of the article is quite difficult, the viewpoints are highly valuable for reference.

3. Victor@VictorL1024: Fund manager, veteran in the coin circle, early miner, has a unique perspective on the market.

4. Bperson sunong@BensonTWN: An experienced trader from the last bull market, provided some key cyclical indicators that are helpful for trading.