Retail investors are panic selling, while whales are continuously accumulating

I remember last year (2023), many new friends who added me left messages saying that their goal for this bull market was at least 10 times, and some even set a target of 100 times for themselves. However, over the past year, although the market has been experiencing a bull run, many friends have changed their goals from tenfold or hundredfold to: just break even!

In recent days, the market is still filled with panic, and many people seem to have become restless again. The previous two articles discussed the current market and trends, and today we continue this topic.

In terms of development history, I still believe that compared to other financial markets, the current crypto market is still in a relatively early stage. However, with the progress of ETFs and the deep participation of major institutions, the current crypto market seems to have been controlled by various funds and big players, who can manipulate this $2 trillion emerging market with little effort.

From an operational perspective, institutions and big players have accumulated a large amount of supply. They can easily instill fear in the market by selling, then buy back low-priced chips from retail investors. They can also boost market sentiment through large purchases, bringing new liquidity to the market and attracting retail investors to take over again. Regardless of market fluctuations, these funds and big players seem to be able to profit from retail investors' money.

Although Bitcoin's decline recently exceeded our expectations, many people have handed over their chips. However, on-chain data shows that many whale addresses are continuously accumulating Bitcoin. As of now, the number of wallet addresses holding over 10,000 Bitcoins has reached the highest level in six years. Since June of this year, they have accumulated over 212,450 Bitcoins (accounting for 1.05% of the total supply). As shown in the figure below.

When retail investors choose to sell, many whales are accumulating. If you want to hold onto your Bitcoin, it can be difficult without enough faith and patience, and whales are taking advantage of this.

For example, whales often buy in resistance zones and sell during rebounds, triggering stop-loss orders, leading to price fluctuations, causing many traders to lose their positions in the process. Alternatively, whales may continuously lower prices during consolidation to accumulate lower positions and manipulate future prices after completing their accumulation.

Moreover, whales may also create price imbalances using FVG (Fair Value Gap), as correcting any imbalance can bring them profits. Simply put, FVG can be any directional price impulse that causes significant price changes, i.e., when one side pushes the price significantly in an instant while the other side fails to respond in time, an under-traded area is formed.

In short, during a cycle, whales will attempt to manipulate the market in various ways, hoping to continuously lure retail investors into various trading traps.

The market sometimes resembles a balloon; although it often feels like it could burst at any moment, don't forget that a balloon can stabilize through continuous inflation and deflation. The key question here is that no one knows the specific limit of this balloon; what you need to do is to gradually exit whenever the balloon inflates to its maximum size.

If we briefly review past crypto bull markets, we can find some interesting phenomena. The bull market in 2017 was referred to by many as the tulip bubble. By the 2021 bull market, many people saw dreams, genuinely believing that blockchain could change the world. However, in this current bull market (2025?), the situation has become entirely different, and due to Wall Street's involvement, many believe that the crypto market has turned into another U.S. stock market.

But whether in the crypto market or the U.S. stock market, what we need to do is to understand the potential patterns or issues as much as possible. For example:

From a leverage perspective: Generally, excessive leverage often leads to forced liquidations and market crashes, and the unpredictability of risks may trigger cascade effects. Therefore, before the market enters a new round of upward movement, it is necessary to eliminate these risks, a process that often triggers large-scale portfolio de-risking and leaves over-leveraged investors in dire straits.

From an asset perspective: Bitcoin is currently highly correlated with the U.S. dollar; in a sense, holding Bitcoin means holding dollars, allowing you to buy anything worldwide. Thus, we also find that many multinational corporations have added Bitcoin (including Bitcoin ETFs) as an important asset for their companies. Many even describe Bitcoin as digital gold, suggesting that Bitcoin may establish a certain connection with gold in the future.

If you can hold 1 Bitcoin now, it means you have already outperformed many ordinary people globally. If you can consistently hold 1 Bitcoin, you will surely outperform many ordinary investors in this field in the future.

I remember mentioning before that if you are not a professional trader, you should avoid frequently making swing trades, as your personal feelings or skills are unlikely to compete with professional traders. Ordinary people who wish to gain in this field can only leverage the understanding of the larger cycle's patterns and combine it with their patience. Moreover, what we need to overcome is not the whales, but simply to outperform over 90% of ordinary retail investors like ourselves.

I recall that in January of this year (2024), Bitcoin fell from $46,000 to $39,000 in about two weeks. During that time, I received many messages, and many of them were similar to the questions I have received recently. Many friends also lost their chips during that period due to panic, only to watch Bitcoin rise to $73,000 in less than two months.

Although such pullbacks occur in every cycle, it seems that many people choose to sell their chips out of panic during the pullback process. The same story repeats itself over and over again; perhaps this is how market psychology operates.

Compared to the price increase of Bitcoin driven by the BTC ETF narrative, due to insufficient inflow of funds for the ETH ETF and the FUD (Fear, Uncertainty, Doubt) caused by the current stagnant market conditions, we may not see significant growth changes in the next 1-2 months, and it is likely to continue consolidating.

But I still say, I remain optimistic about the long-term development of the market. Moreover, regarding altcoins, on-chain data shows that the overall performance level of altcoins has now reached the level of November 2023, indicating that there is still a chance for a new round of altcoin season to arrive. As shown in the figure below.

Additionally, looking at the BTC.D index, since April of this year, BTC.D has been consolidating between 54% and 57%. This range seems to be a reasonable position, and once it starts to fall below this range, we may welcome a new round of altcoin season. As shown in the figure below.

Of course, this brings us back to the core issue mentioned in previous articles: in the absence of new liquidity injections, and with a plethora of new projects emerging in this cycle, not all altcoins will have the opportunity for a new round of price increases. If you want to reposition now, the best choice is to narrow your focus and primarily look at projects with greater narrative (storytelling) potential.

Regarding the selection of projects, I have recently noticed a viewpoint where many seem to be denying the "new over old" rule. I won't debate whether new or old is better; what I want to say is that everything is dialectical. If you always prefer to think about problems through a single dimension, it is easy to fall from one extreme to another.

The meaning of "new over old" does not simply mean that you should only buy new coins and not old ones. The essence of this rule is that old coins are usually held by a broader group of people, making them less susceptible to price manipulation. Most of the circulating supply of new coins is typically allocated to specific individuals or groups, making their prices easier to manipulate.

If manipulators target old coins, they need to create or utilize a sluggish market (or directly leverage a bear market cycle) to recover these coins from the market, which is more challenging and time-consuming. However, for new coins, short-term manipulation is easier to achieve. Thus, this is a two-way issue; it depends on how you view and utilize it. If you can follow the manipulators' thinking, you can benefit; otherwise, you will be cut.

Taking the recently popular STRK and ZK projects as examples, although these have undergone extensive airdrops, you still need to consider several questions:

• Are airdrops necessarily fairly distributed? Many tokens may have been airdropped to specific wallets!

• The tokens generated selling pressure upon listing, so their price performance was not very good. STRK fell from $2.7 to $0.6 after listing, and ZK dropped from $0.28 to $0.15, with various unlocks seemingly on the horizon. But have you thought about who is taking the opportunity to buy back the tokens sold in the market at low prices? Is it really all retail investors taking the sell-off?

Of course, figuring out these questions is difficult, even impossible to verify, but it should indeed become a way of thinking for us. Therefore, if you still want to participate in altcoins, consider the following angles:

If you wish to trade old coins, try to find those that have continuously generated trading activity and been accumulated by big players during bear markets or consolidation periods;

If you wish to trade new coins, look for those whose majority supply has been taken away or bought by big players after the token issuance (not before);

And whether old or new coins, it is best to have room for speculation. Speculation refers to the ability to make most retail investors understand and believe (or directly get you to rise), such as AI and RWA, which are relatively easy narratives to speculate on.

The STRK and ZK examples I mentioned above are just random examples, not specific investment advice. However, if you can find tokens that meet the above conditions, it may increase your chances of investment success. Next comes the mindset; do not be intimidated by various so-called negative news. Instead, you should actively pay attention to new market-driving factors, such as:

• The progress of ETH ETF approval (approval of ETF S1 forms)

• The policy tendencies in the U.S. (the presidential election in November and Trump's supportive stance on cryptocurrencies)

• Expectations for interest rate cuts by the Federal Reserve (U.S. CPI data will be released on July 11. Will there be at least one rate cut before the end of the year?)

• FTX may repay $16 billion to creditors (funds continue to flow into the crypto market, bringing positive sentiment)

Then, reasonably plan your position management, control risks, and prioritize using a DCA strategy for your layout. In short, investing is a long-term endeavor; it is not a sprint but more like a marathon. Only reaching the finish line at the end of the cycle makes you the true winner.