The new tariff policy in the United States has led to a market crash? Bull run or bull collapse?

Source: Talking Li and Talking Outside

The market has not been performing well these days, so some friends seem to be quite emotionally volatile. In the last article (February 1), we simply compared ETH and SOL, which ended up stirring up a hornet's nest, resulting in over ten comments filled with artistic language. The first comment that started with profanity came in about a minute after the article was published. I was puzzled; a 3200-word article should take about 7 minutes to read, yet I received an artistic comment in less than a minute.

I remember when I first started the public account, I would sometimes kindly reply to such comments and ask about the other person's situation, such as asking: which part of the article they had opinions or suggestions on, or what difficulties or problems they encountered. However, over the past two years, I have slowly gotten used to and accepted such comments. In this world, who doesn't have a few haters? Sometimes, it is really necessary to show some empathy and respect for others' fates.

Even if I want to be open and sincere, it is still impossible to make everyone like me. Therefore, I just need to do my best and stick to my original intention. This world is divided into black and white; no one can change this pattern. Most people can only choose to either thrive in the white or in the black, while a few exceptional individuals can thrive in both. There may be some outliers, but most of these outliers ultimately end up being mediocre or do not achieve good results.

In this world, some people work for money, while others do not. Those who do not work for money are often those who are already financially secure, but they pursue higher-level things, such as being able to call the shots (like running for governor or president, or standing alongside the president).

Of course, there are always things that money cannot buy. Some people do not care if others see that they are wealthy, nor do they care if others do not see it; they just want to do what they love freely. The end of prosperity is desolation; many people and things will exist in our lives without us noticing, and if we are greedy, we will surely be disappointed.

1. Has the bull market collapsed?

Last night (February 2), while chatting in the group, someone said: "I found that many KOLs have announced that the market has entered a bear market!"

I chimed in:

Just go at your own pace. KOLs can announce bear markets or bull markets, or even discuss the ownership of the moon and the sun, but these are just personal opinions from different people. KOLs will operate according to their own views, which is their freedom, but everyone's position cost and risk preference are different, so it is not suitable to directly adopt or copy their strategies. We just need to extract their thoughts and methods and see which ones can be combined with our own strategies.

2. Is the altcoin season here? Gone? Not here?

Then, the topic shifted to altcoin season, and several representative viewpoints emerged:

• There is no altcoin season anymore.

• The current altcoin season should be more than halfway through.

• This round of altcoin season is different from what everyone imagined; the beautiful scene of all coins rising together, where just holding coins would lead to gains, is not the case. In reality, only one or two tracks have attracted 80% of the funds and attention.

• Catching twenty times in the first tier and five times in the second tier is already considered having the ability to pick coins.

Regarding the topic of altcoin season, we can add some data-driven thoughts:

Taking the Solana chain as an example, there are currently a total of 28,599,095 token contracts deployed on the chain. As shown in the figure below.

Among them, approximately 9,048,663 tokens can be traded through DEX. As shown in the figure below.

Now let's make an assumption:

Assuming each token has a market value of $200,000 (a relatively conservative assumption), then the total market value of altcoins on the Solana chain alone would be 9,048,663 × 200,000 = $1.81 trillion.

Continuing with the same assumption, the market value on the Ethereum chain is $83.774 billion, BSC is $358.21 billion, Base is $256.607 billion… If we add up the dozens of commonly known chains (calculating based on 13.4 million tokens), it would be $2.69 trillion.

Currently, the TOTAL2 data in TradingView is $1.21 trillion (TOTAL2 statistics represent the total market value of altcoins on mainstream platforms, such as CoinMarketCap, CoinGecko, TradingView, etc.), so based on the above assumptions, we can draw a simple conclusion:

• The total market value of altcoins this round may be much larger than we imagined, as TOTAL2 may not account for the market value of some on-chain assets.

• The massive number of projects born in this cycle has diluted liquidity. If the same liquidity had appeared in the last bull market, it would have likely led to a collective rise of all altcoins by several times. However, this cycle is destined to have only a few altcoins with significant gains. If there are no fundamental changes in macro liquidity, then even if we welcome the so-called altcoin season next, or if we are experiencing an altcoin season, the perception will still be quite different.

I remember a few days ago, an analyst released a statistic predicting that by the end of this year, the number of cryptocurrencies in the market is expected to exceed 100 million. If that is the case, then the emergence of an altcoin season may be even harder to perceive. Perhaps when you see someone’s position in a certain coin multiplying in a short time, it might just mean that the altcoin season has already passed.

In short, I still believe there is an altcoin season, but this time it may be completely different from the historical altcoin seasons where "all coins fly together" in a short time.

3. Is there no hope for Ethereum?

While the group was discussing the topic of altcoin season, another friend threw a question into the group: How high can ETH rise this round?

Different people may have different answers to this question. Then I casually said:

• Optimistically, 3800--4100--4800--5300, then reaching around 6000 in May.

• Pessimistically, I can't say for sure.

Since this is a private group chat, my comments are relatively casual, so I need to remind you that the numbers mentioned above are just my random guesses, not trading advice. The short-term market cannot be predicted, and no one can predict it accurately.

As for whether you remain optimistic or pessimistic, that depends on your own position and risk preference. Personally, I remain optimistic (perhaps my optimism is misguided, but it won't have a significant impact on my position).

4. The market has dropped again!

Unfortunately, a rather pessimistic event occurred that same night. Last night (February 2), the overall market dropped significantly, with Bitcoin falling from 101,000 to around 96,000, and ETH even breaking below the support line of 2800, dropping to a low of around 2750. Other altcoins dropped even more, with many exceeding 20%. As shown in the figure below.

After this drop yesterday, the current market value of TOTAL2 has directly decreased by about $130 billion. According to on-chain data, in the past 24 hours, a total of 454,783 people were liquidated, with a total liquidation amount of $1.184 billion, as shown in the figure below.

The drop was indeed significant, but I personally feel relatively indifferent to this drop; I have experienced much larger drops over the years.

As the market declines, from last night to today, we should see many new negative news emerging as per usual, and various KOLs will come out and say: "See, I said it was a bear market, but you didn't listen; I have already accurately called the top."

As for the reasons for the drop, I saw some analysts summarize that the recent market decline is mainly attributed to the impact of the new tariffs imposed by the U.S. government (on February 2, Beijing time, the U.S. government announced a 25% tariff on imported goods from Canada and Mexico, and an additional 10% tariff on all goods imported from China. The U.S. also stated that if there is retaliation against U.S. tariffs, they may continue to increase tariffs).

Yesterday happened to be the fifth day of the Lunar New Year, and many people were "welcoming the God of Wealth," but the sudden drop seemed to scare quite a few people. I noticed that some friends had already sold or cleared their positions out of panic. However, some friends bravely added to their positions, and even some calmly stated: "The drop is not enough; I have no desire to add to my position." See, this is how different people have different risk preferences.

As for what you should do? I don't know and cannot give specific advice; I just continue to remain optimistic. As we mentioned earlier: everyone's position cost and risk preference are different, and others' opinions and actions are not suitable for direct adoption or copying. We just need to extract their thoughts, logic, and methods, and see which ones can be combined with our own strategies.

In other words, if you believe the bull market has collapsed, then you can clear your positions or short the market. If you believe the bull will continue to run, then we should maintain the viewpoints from the previous articles:

• For those who dollar-cost averaged into the bear market, you can continue to maintain your pace and plan to sell in batches this year, ignoring the short-term fluctuations in the market.

• If you enjoy trading in waves, you can still combine your own indicators to add to your positions at lows while having a good profit-taking/loss-cutting plan.

Here’s an example (using myself as an example):

I dollar-cost averaged into the bear market, so I will continue to operate according to my existing pace. I personally do not care much about short-term market fluctuations; I have shared this in previous articles and in the group. So far, I have only sold 10% of my position, as shown in the figure below.

If I were to trade in waves (since I don’t, this is hypothetical), during the drop last night, I might consider placing a buy order for BTC at 96,500 and for ETH at 2800. But since it is wave trading, I would strictly set stop-loss and take-profit levels. Considering that BTC has entered a small descending channel since around January 20, if it continues to drop below 92,800, I would consider selling to stop-loss. Of course, if I feel relatively optimistic (with a higher risk preference), I would wait until it drops below 87,000 to stop-loss. The same goes for ETH; if it continues to drop below 2600, I would consider selling to stop-loss. Of course, since this is wave trading, I cannot use too much of my position to operate; for this operation, I would only take out a maximum of 0.2% of my total position (corresponding to my B-level position allocation). As shown in the figure below.

The reason for giving this example is still to express the previous point:

Whether the bull market is still here or not, these are relative concepts. If your average holding cost for BTC is 20,000 (or your average holding cost for ETH is 1,000), then it is still a bull market for you. We just need to continue executing our trading discipline according to our existing strategies and plans.

However, if your average holding cost for BTC is 100,000 (or your average holding cost for ETH is 3,000), then you should make corresponding plans based on your position situation and personal risk preference (in simple terms, consider both profit and loss plans), and not casually base your trading decisions on the personal opinions of KOLs or bloggers (including Talking Li and Talking Outside). Many self-media bloggers may sometimes consider traffic issues rather than unconditionally helping you get rich; DYOR.

In this field, a prerequisite for wanting to make money is to not ignore the environment and market. Always learn to find reasons within yourself and continuously optimize yourself (including your knowledge, strategies, mindset, and other aspects).