Nothing Research Partner: Chasing highs is the real bottom fishing, insights and analysis on this round of bull market

Author: Allen Ding 鼎

Two years ago, I set a major tone for my operations in this bull market, which all my long-time followers already know:

1. Get fully invested in spot as early as possible; holding assets in cryptocurrency is the mindset that a bull market should have. So I went all in personally in November 2022, when Ethereum was at 1180;

2. Heavily invest in Bitcoin and Ethereum, strictly controlling the number of altcoins to no more than 10;

Currently, my positions are 20% Bitcoin, 60% Ethereum, and 20% altcoins.

3. Always look for opportunities to leverage Bitcoin and Ethereum, but definitely not exceeding 2.5x of the total position;

Why leverage? Because it can indeed amplify profits, and this round might be the last significant surge in the crypto space that ordinary people can enjoy. Why not exceed 2.5x? Because I believe that a drop of over 30% in a bull market will be quite common, and excessive leverage can easily lead to liquidation.

4. Do not sell unless there are obvious signs of a top, but once such signs appear, you must sell;

Currently, I have done quite well with points 1 and 2, but point 3 has not been completed, which has been a lingering concern for me. Finally, five days ago, I leveraged 0.8x at Bitcoin 63500/Ethereum 3500, and my total leverage is now 1.8x. I must admit, this entry point is definitely not the best choice; it feels more like a last resort because the bottom for Bitcoin in this round was 15000, and for Ethereum, it was 900. My leveraged position is already four times the bottom price. However, I still decided to enter at this point because I have come to understand some things.

1. The capital involved has changed

The approval of the ETF has allowed old money in the U.S. to enter and dominate the crypto game openly and without obstruction. This is like seawater flooding a small fish pond, where the fundamentals of the small pond are no longer important. This is also why, after the ETF approval, Bitcoin did not experience the deep correction I imagined and quickly rebounded, repeatedly hitting new highs. Even when the technical indicators looked bearish, the price could still rise indefinitely. The essence of this is that the technical indicators of the small pond do not count; it is the seawater's indicators that matter. Recently, I interviewed many technical experts and short-term traders around me, and they have generally missed this wave, only starting to surrender and join the blockchain revolution in the past month.

"As long as you surrender quickly, you are part of the revolution."

2. The players have changed, the rules have changed

In the past, the major players in the industry were exchanges and market makers, who made money from market fluctuations. The extent of Bitcoin's one-sided rise in a bull market was not important; what mattered was the volatility and the amplitude of the fluctuations. As long as the volatility was sufficient, gamblers would bet happily, and the more frequently they traded, the more fees the exchanges earned, and the greater the arbitrage opportunities for market makers. However, this time, the major players are the ETF issuers on Wall Street, whose profit model is not based on transaction fees but on management fees. For a $5 billion fund, they charge 0.2%; for a $50 billion fund, they also charge 0.2%; for a $500 billion fund, they still charge 0.2%. So I ask you, do they want to make the market bigger or smaller? The answer is, of course, to make it bigger, because only with a larger market can they earn more management fees. How can the market be made larger? It must be through higher Bitcoin prices, because there is only so much Bitcoin; the higher the price, the larger the market.

"Find the purpose of the players, judge whether they have achieved their purpose, and if not, then join in."

3. New highs are not considered high until after they are established

I vaguely remember January 2021, when my partner 0xTodd and I were in Yunnan for New Year's. We were soaking in hot springs and enjoying mushroom hot pot while watching Ethereum rise from 700 to 1300 in a month, a staggering increase of 78%, which completely blew my mind. The previous high was over 1400, right near that level. At this time, Ethereum's price on February 1 was 2283, and now it is 4018, which is exactly a 76% increase, with the previous high being over 4800, also near that level. So I ask you, is this moment not just like that moment back then? If you think Ethereum is high right now, then congratulations, you must have thought that Ethereum at 1300 was also high, and then you would have missed out on Ethereum at 4800.

"Sometimes, chasing highs is the real bottom-fishing."

4. It may take several attempts to break through the ATH, but you must seize every opportunity, especially the first one

The main reason I chose to leverage on March 6 was that I believed the liquidation data and the strength of the pullback after the failed attempt to reach ATH on March 5 were adequate, and the rebound was also strong. In the bull market of 2021, I remember the ATH took 4-5 attempts to break through. This time, with the strong support of the ETF, the resistance to breaking through the ATH will definitely be less than last time. Therefore, after the first pullback that I deemed adequate, I did not hesitate to build my position because I did not want to gamble on whether there would be a second or third failed attempt to break through.

"In a bull market, any behavior betting that prices will not rise is foolish."

Finally, I hope my sharing can help those who are not fully invested yet gain some strength. We are currently only at 1/4 of the bull market; you will still experience significant surges in mainstream coins like Ethereum, a major reshuffling of the top 100 projects by market cap, altcoins going wild, and many other bull market phases. There are plenty of opportunities, with each phase offering chances for 5-10x returns. Seize this bull market!

Lastly, I do not encourage everyone to use leverage, especially high leverage. I myself am a victim of high leverage from the last round, and I have repeatedly warned about this in every live broadcast. This article is merely sharing my thoughts and does not guide anyone to use leverage or contracts.