Market Outlook for the Next Month: Challenges and Opportunities Coexist, Utilize Rotation Strategies for Profit

In the coming weeks, the cryptocurrency market may experience a period of volatility. Spot positions may face significant drawdowns, and investors need to weigh the decision of whether to hedge risks in advance. Although this time may be unsettling, if one can hold on, the next wave of increases is expected to bring considerable profits to certain key currencies, potentially even fully offsetting previous losses.

The market has not "ended," and a new round of increases is expected in the next 4-8 weeks. This expectation is based on several factors, including the high dominance of Bitcoin, seasonal factors, the potential rise of the Ethereum/Bitcoin ratio, and the rotation of funds in the market. Furthermore, the government's attitude towards cryptocurrencies is relatively positive, and there are fewer obstacles in the macroeconomic environment, which theoretically creates favorable conditions for the market.

In the upcoming rise, investors should gradually shift into a selling role. It's understandable to choose to hold during the trough, but the subsequent selling plan should gradually lean towards safer assets, such as Bitcoin and stablecoins.

As the market cycle progresses, investors need to gradually reduce risk, shrink position sizes, and slowly exit the market through dollar-cost averaging, rather than liquidating all at once. From now on, the market will lean more towards traders rather than long-term holders. Certain cryptocurrencies may attract a large amount of buying, while others may rise slowly.

It is difficult to predict in advance which cryptocurrencies or sectors will become market leaders. From a rotation perspective, it seems that all cryptocurrencies will rise, but there is no overall upward trend at the same time. For example, ordinary AI cryptocurrencies will eventually experience a significant increase, but it may only be reflected in 1-2 cryptocurrencies.

Investors should not stubbornly hold onto certain cryptocurrencies to achieve unrealistic target prices. Many cryptocurrencies are unlikely to reach their all-time highs again. While some mainstream coins may do so, a bull market does not mean that all coins will return to their historical peaks. Adapting to market trends and taking profits in a timely manner is the wise course of action.

For investors with a highly diversified portfolio, it is recommended to sell 50-75% or more of their holdings during the next wave of price increases, after the rotation ends. For example, when the AI sector rises, if you hold related cryptocurrencies, you may choose to sell; or if you hold tokenized physical asset cryptocurrencies, you should take profits in a timely manner when the price increase is substantial.

In the coming period, investors should try to consolidate their investments, reduce the number of new positions opened, and lower the overall variety of holdings. As for when the next significant pullback similar to the summer of 2024 will occur, it is currently difficult to predict accurately. It is speculated that there may be another round of adjustments in about 3-6 months.

The market may enter what is known as a "super cycle", but caution should still be maintained regarding this. Investors should set reasonable drawdown targets, such as controlling the portfolio from historical highs to a maximum drawdown of around 30-40%.

Most importantly, investors need to continuously monitor market data and constantly reassess the peaks and endpoints of the market cycle. When the market starts to turn, things can become complicated. Even when a bull market ends, there will still be those who remain optimistic about the future. Staying vigilant and adjusting strategies based on the actual situation is crucial.

Finally, investors must conduct independent research and not blindly follow the opinions of others. Everyone's trading strategies are different, and one should not completely rely on others' exit strategies. If you can exit the market with a considerable profit, you are already a successful investor.