Brothers, I'm Sister Xu. I just saw the market, and I guess many people are confused: wasn't it said that Japan's interest rate hike is bad news? Why is the market rising instead, and why are altcoins going crazy?
The data is right in front of us: LIGHT surged 70% in one day, SOPH rose 40%, and a bunch of altcoins followed suit. Many retail investors' first reaction is: the bad news is all out, the bull market is back, let's rush in.
But my point is clear: don't get too focused; this is more like the main players creating a diversion to sell during the chaos.
Why does the market rise when the bad news is released?
The reasoning is actually not complicated; remember these eight words: when the bad news is fully digested, it's good news.
The biggest shoe has dropped: whether Japan raises interest rates has been debated in the market for months. Now the results are out, 25 basis points, as expected. The uncertainty has disappeared, and some suppressed capital feels it’s not such a big deal, starting to enter the market to bet on a rebound.
The space that has dropped: The market has already dropped in advance a few days ago, digesting some interest rate hike expectations. Prices falling to bargain levels in some people's minds naturally attract buying to bottom-fish.
The main players need liquidity: that's the key. Large capital wants to sell, and there needs to be someone to take over. Creating a false sense of prosperity where bad news is behind us, the market is unafraid, and the situation is warming up is most effective at attracting retail investors to chase the highs. Look at these skyrocketing altcoins; have you heard of them before? Suddenly surging with huge volumes, it's very typical.
The surging altcoins have exposed three dangerous signals.
Look at these coins that have surged the most; have you noticed any patterns?
Signal one: All are low circulating supply small coins and new coins.
LIGHT, SOPH, 67, RESOLV... Aside from seasoned traders, how many retail investors have really delved into these projects? Their commonality is: they have relatively small market caps and the circulating supply is easy to control. With a small amount of capital, you can drive the price up, attract attention, and then sell to those who chase the highs.
Signal two: Huge trading volume in 24 hours, but sustainability is questionable.
For example, RESOLV had a trading volume of 160 million USD, and the price rose by 36%; WET had a trading volume of 129 million, rising by 35%. Huge trading accompanied by price increases is a classic method to attract trend-followers. Once the main players have distributed their chips, and the trading volume shrinks, the price may fall just as it rose.
Signal three: The main line of the market remains vague.
Bitcoin, Ethereum, and other mainstream coins have only slightly rebounded and have not formed a strong reversal. The capital is not pushing up the large market that requires huge funds but is choosing these 'lightweight' targets, indicating that the essence of this market is short-term speculation rather than a trend reversal. The main players are testing market sentiment rather than firmly going long.
I am currently highly alert and unmoved. In this kind of market, I not only won’t chase but will check my holdings. Absolutely do not chase these surging altcoins: this is discipline. A daily rise of dozens of points may look beautiful, but when you see the news and rush in, it’s likely that you’re just picking up the last baton. The risk-reward ratio is extremely poor.
The focus remains on key positions: my attention is only on two places: Can Bitcoin stabilize at 85,000 USD and break through 90,000? This determines the true strength of the market. Can Ethereum hold above 2950 and return to above 3200? This is the overall barometer for altcoins. If the main market is unstable, all the altcoin festivities are castles on the sand.
Use the rebound to adjust positions: If you hold previously trapped or weak positions, this rebound is an opportunity to reduce or adjust your positions, not a reason to increase your holdings. Move funds to more core, stable assets.
Heartfelt words for retail investors
I know it’s torturous to watch others make money, but survival in the crypto space is not about who makes a quick profit one day, but who lasts the longest. Understand whose game this is: the current surge is for the project teams and market makers to sell off. Your goal is to profit from the price difference; their goal is your capital. Understand who is on which end of the food chain. Wait for your opportunity: true trend opportunities will give you a relatively calm entry time, rather than forcing you to chase and panic sell in FOMO. Patiently wait for the market to take a clear direction, waiting for Bitcoin and Ethereum to give solid signals.
Summary:
This wave of chaotic surges in altcoins after Japan's interest rate hike, in my view, is not a charge signal but more likely a smokescreen. It diverts attention from the weakness of mainstream coins, creating a localized profit effect with the aim of attracting liquidity.
My strategy remains unchanged: closely watch the key levels of the market and safeguard my wallet. Do not be tempted by profits that are risky; patiently wait for calm before the real opportunities worth betting on.
The excitement belongs to them; what we want is to safely reach the next bull market. Keep your hands steady, let’s encourage each other. As for the next clear opportunity to act, and how to identify the true trend initiation signals, I will share inthe chat room. Remember, true hunters never chase noise but wait for the opportunity to strike.
