Adam Cochran on the Market: Three Major Trends and Strategies to Respond, Which Side Are You On?

Source: Adam Cochran X Account

Author: Adam Cochran

Compiled by: Peng Sun, Foresight News

Everyone is asking how the market will move, and currently, there seem to be three directions, each with a distinctly different positioning. Two of these directions are bullish, and one is bearish. I believe that if you play your cards right, you can easily seize any of these opportunities.

Direction One: Echo Bubble Market

In financial markets, there can sometimes be a rebound after a bubble bursts, which is known as an "echo bubble," similar to the echo bubble concept proposed by cobie in the previous market cycle.

Everything is rising, and memes are always fervent. If you see the follow-up trends of meme stocks (like GameStop's GME) and interest rate cuts, this could be our direction. It will be much shorter than the previous cycle, and the decline will be significant. But this means seizing opportunities in mainstream coins + meme coins, setting exit targets in advance, and not being too greedy. Many memes have not broken their previous highs, so it's best to sell before they do.

Direction Two: Steady Slow Growth

This is the direction I find most promising.

I believe that meme stocks, mainstream projects, and meme tokens will all attempt to explode but will ultimately fail, leading the remaining capital to shift towards actual value. In this model, I think you will see capital moving towards projects with real users and real cash flow. We will move away from speculation and gradually grow from funds that start to accept BTC and ETH on a large scale.

As pension funds continue to face performance pressures from economic changes, demographic dynamics, and inflation, it is crucial to shift assets to non-sovereign currencies. Unlike retail investors, these buyers are long-term holders and have stickiness. Although their decision-making is slow, they form an important long-term foundation for the development of the Crypto industry.

This also means that our growth comes from spot growth rather than derivatives growth, which is a significant change in the market. In this case, assets with high liquidity like BTC and ETH will perform strongly, while tokens that provide dividends to holders, such as MKR and SNX, may perform excellently. However, you will also see a significant shift of funds towards RWA assets, on-chain government bonds, and so on.

Market platforms like Pendle will thrive. Because the S&P index will not make us uneasy, interest rates will continue to decline or remain stable, and there will be no sudden fluctuations.

Direction Three: Oh Shit, It's Completely Over!

This scenario is unlikely to happen, but if geopolitical tensions escalate or inflation worsens, all capital markets will be severely affected.

Since BTC and ETH have not strongly surpassed their previous ATHs, it is hard to see capital markets treating them as strong safe-haven assets. The liquidity of speculative assets will flee in large amounts, seeking safe havens. In this case, the only crypto assets that have a chance are those that can capture related bond yields, so it could be MKR or certain stable income-generating assets, but trading volumes may also decrease significantly.

So, now we have these three major directions:

• Go long on BTC, ETH, and memes, and short on interest rates.
• Go long on BTC, ETH, MKR, SNX, and short on memes and hype.
• Go short on BTC, short on the S&P, go long on bonds, go long on MKR, and pray for a better tomorrow.

Therefore, no matter which one you choose, you can hit two of them, and that result isn't bad! But the best approach is to maintain liquidity and avoid any long-term lock-ins, so that once market signals change, you can respond flexibly.