Crypto Assets Market Outlook: Opportunities and Challenges in the Coming Weeks

The cryptocurrency market may experience a period of significant volatility in the coming weeks. Investors should be mentally prepared, as spot holdings may face substantial drawdowns. However, if they can hold on through this difficult period, the next wave of increases could bring substantial gains for certain key coins, potentially even completely offsetting previous drawdowns.

It is expected that the market may enter a new upward phase 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 increasing, and market capital rotation, among others. In addition, the government's attitude towards Crypto Assets is relatively positive, and there is less resistance in the macroeconomic environment, which theoretically creates favorable conditions for the market.

In the next wave of price increases, investors should consider gradually transitioning to a seller role. If they choose to hold during the low period, the upcoming selling strategy should gradually shift towards safer assets, such as Bitcoin and stablecoins. As the market cycle progresses, investors need to gradually reduce risk, shrink position sizes, and gradually exit the market through dollar-cost averaging, rather than liquidating all at once.

Regarding the upcoming market rotation, there are currently no clear predictions. From now on, the market may be more favorable to traders rather than long-term holders. Certain coins may attract significant buying interest, while other coins may rise slowly. It remains difficult to predict which coins or sectors will become market leaders. The rotation may involve all coins, but there will not be a trend of comprehensive rising.

Investors should not stubbornly hold onto certain coins in order to reach unrealistic target prices. It is very likely that many coins will not touch their historical high prices again. While some mainstream coins may reach them, this does not mean that all coins will return to their historical highs. Investors should follow the market trends and take profits at the right time.

For investors with highly diversified portfolios, it is recommended to consider selling 50-75% or more of their holdings when the next wave of increases occurs and the rotation ends. For example, when the AI sector rises, one can choose to sell related coins; or when the price of tokenized real-world assets (RWA) rises significantly, take profits in a timely manner.

In the next period, investors should try to consolidate their investments, reduce the number of new positions opened, and decrease the variety of overall holdings. Although it is difficult to predict when the next significant pullback similar to the summer of 2024 will occur, it is estimated that there may be another 3-6 months, after which the market may experience another round of pullback.

Although some opinions suggest that the market may enter a so-called "super cycle," investors should still maintain a cautious attitude. Ideally, the portfolio should be controlled from the historical peak to the maximum drawdown at around 30%, with a maximum of no more than 50%.

Investors should continuously analyze data on a weekly basis and constantly reassess the peaks and endpoints of market cycles. When the market begins to turn, the situation can become complicated. Even after the end of a bull market, many will still hold the view that "the bull market is still ongoing." Therefore, it is crucial to remain vigilant.

Finally, investors should stick to independent research and avoid blindly following the opinions of others. Everyone's trading strategies are different, and one should not completely rely on the exit strategies of preferred opinion leaders. If one can exit the market with considerable profits, they are already a successful investor.