Orange Evening Interpretation 8.14

The entire network is waiting for ETH to reach its ATH, while Bitcoin and BNB have quietly reached new highs. The current market structure is absolutely the best in the history of the crypto world. Although there have been differentiated and siphoning markets in previous bull runs, it never lasted this long. For example, with Bitcoin reaching new highs, the prices of Ethereum and other mainstream coins are definitely also maintaining historical highs, and altcoins may perform even better than mainstream coins.

In the past, the altcoins were all large tokens with at least 3x leverage, but now the market has turned into a scenario where the winners eat meat and the losers eat shit. Many old coins on CEX are still hovering at historical lows, and many mainstream coins are still far from their previous highs. For example, $doge had a previous high of 0.73, and the current price is around 0.2; $avax had a previous high of 145, and the current price is 25; $ada had a previous high of 3, and the current price is 1. Only a few coins can keep up with the speed of the new highs of large tokens, and you might be able to count them on one hand: $eth, $bnb, $xrp, $trx, $sol, $link, $hbar, $xlm, $ton, $aave. These are considered strong mainstream coins, but they still have a price difference of at least double compared to their previous highs. There are even worse mainstream coins like $dot, $near, $icp, $algo, which would need to rise another 10x to return to their previous highs. Most of these mentioned are reputable projects, while 99% of the projects on CEX will perform even worse. The drop from their highs has been several hundred times too much. I haven't kept statistics, but probably more than half are still at historical lows, in a bearish trend that can't get any more bearish. Therefore, I have been telling everyone that the way to play in the coin market has changed. In the previous bull markets, there might still be stories of dead fish turning over, but this round really doesn't work. You can only play with leading coins, those with ETFs or crypto treasury. Projects that have upward social resources are altcoins. If the altcoin you hold has not made any news in the past six months, in such a popular crypto environment, then it's likely that the team has already disbanded or has no ambition, just waiting to die. This kind of project must be quickly cut off; otherwise, you will regret it too late.

Speaking of the macro situation, the expectation for a rate cut in September has already been solidified. Bessen has been calling for a 50 basis point cut for two consecutive days, and Trump has also suggested that the new chairman of the Federal Reserve will take office earlier than expected. The candidates have now been narrowed down to three or four, which means we should see results at the FOMC meeting in September. CME has completely removed the option of no rate cut in September, replacing it with a 2% probability of a 50 basis point cut. Polymarket predicts that the probability of a 50 basis point cut in September exceeds 8%. With this expectation, the performance of the US stock market and the cryptocurrency market is very strong.

Last night the new exchange Bullish exploded, opening with a direct surge of 200%. Its market value broke through 15 billion USD, and the trend almost replicated Circle from a few months ago. Many friends are unaware that this is the exchange created by the EOS Foundation Block1, with funding sourced from EOS's ICO. However, this project has separated from the EOS community since its inception, with both being completely independent and even deliberately distancing themselves. They do not use the EOS chain or technology, do not accept EOS tokens as a medium of exchange, and never promote or thank the EOS community. The market's reaction is that Block1 is using EOS's funds to create its own project, which has also gone public. One could say that Bullish is the new favorite, while EOS, represented now as $a, is just a faded flower of yesterday, seen as a project abandoned by its developers. Additionally, Bullish is the parent company of CoinDesk, and both Cathie Wood and Peter Thiel participated in Bullish's IPO, which can basically be seen as a second BMNR.

Speaking of the altcoin market, as mentioned earlier, ETH is still dominating the current market trend. Although BTC and BNB have reached ATH first, the coins that have shown significant increases in the altcoin market are almost all ETH-based, such as $gtc, $skl, $eigen, $arb, $zk, etc. The sectors of infrastructure, DeFi, and L2 are all performing strongly. However, compared to the main coin ETH, these projects are still weak. For instance, ARB is still down about 5x from its previous high. I remain concerned about the future trends of these types of altcoins; this gap may continue to widen with ETH. According to my investment strategy, I would allocate at most 10% of my portfolio to these kinds of altcoins. I will mainly focus on the leading coins. If I am not satisfied with the expected returns from the leaders, I would turn to coin stocks. This type of investment tends to have larger fluctuations, but it could yield enormous alpha returns. Coin stocks might perform similarly to the contracts of mainstream coins, but the risk of liquidation is avoided, making it much better than contracts in this regard.