To The Moon

During phases of temporary market adjustments, the intensity and duration of such trends often surpass expectations. These circumstances can lead many investors to either hesitate in buying the dip or surrender their positions amid repeated fluctuations and reversals. This phenomenon is one of the underlying reasons for the common saying: "Holding onto losses stubbornly, but hesitating to hold onto profits." If your investment strategy is guided by the mindset of "breaking even is earning," then quick trading with low risk is a reasonable approach. However, for those seeking above-average returns, attempting to buy during uncertain or potentially risky market turning points becomes an essential skill.

Currently, Bitcoin presents itself in a similar situation. On one hand, the market previously showed a strong upward trend, consistently reaching new highs. On the other hand, its price recently formed a double-top pattern, followed by a failed rebound, and is once again under downward pressure. The key question now is whether to avoid short-term technical risks by following a small-cycle trend or to take a contrarian approach by buying the dip, considering broader market trends and cost-effectiveness. Personally, I lean toward the latter strategy.

Fundamentals Assessment

Although the cryptocurrency market lacks a reliable fundamental support system, its strong correlation with U.S. stock indices is evident. Regarding U.S. stocks, we have previously discussed that former President Trump’s policy approach during his term favored a "first suppress, then boost" strategy. After experiencing setbacks in his initial term, Trump fully understood that late-stage market growth is more advantageous than early growth. However, adjustments in the stock market do not imply a crash or the onset of a recession. Historically, a correction of around 20% from short-term market highs generally satisfies the need for adjustment. At present, the U.S. stock market has already completed half of such a correction. In other words, the downside room is limited, while there is still potential for new highs. As long as the U.S. stock market remains stable, Bitcoin is unlikely to face a major collapse, particularly with the increasing influence of ETFs and thematic stocks tied to cryptocurrency.

Technical Analysis

From a technical standpoint, the recent double-top formation on Bitcoin’s chart is valid. However, its theoretical correction target is approximately $70,000, which is not far from the current price level, considering Bitcoin’s high volatility. Additionally, our previous analysis anticipated a platform-like adjustment phase, suggesting that the formation of a potential double-bottom pattern is plausible. Once this adjustment phase concludes, the next projected upward target, based on prior extension levels, would likely be in the $120,000 to $130,000 range. Only after reaching these levels could a meaningful shift in market trends possibly occur.

Risks and Strategic Considerations

Despite the aforementioned positive outlook, we cannot ignore the recent weakness in Bitcoin’s weekly chart and the general sluggishness across the broader cryptocurrency market. Given these conditions, Bitcoin remains the most viable option for investment. In contrast, alternative cryptocurrencies like Ethereum and other second- or third-tier tokens are more suitable for shorting or hedging. Over the long term, Bitcoin is likely to remain the only cryptocurrency with substantial prospects for survival and success.

From a strategic perspective, initiating a dollar-cost averaging (DCA) approach or establishing a base position at the current price carries relatively low risk. If Bitcoin undergoes a secondary dip, it would present a further opportunity to increase holdings. Only if the price drops below $65,000 should it be considered a trend reversal, in which case exiting the market to cut losses becomes unavoidable. However, as long as prior support levels hold firm, reaching above $100,000 would likely be a matter of time.

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