Market Outlook for the Coming Weeks: Pain and Opportunity Coexist—Learn to Profit from Rotation
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Market Outlook for the Coming Weeks: Pain and Opportunity Coexist—Learn to Profit from Rotation
Be sure to do your own research and don't blindly follow others' opinions.
Navigating Web3 tides with focused insightsAuthor: Altcoin Sherpa
Translation: TechFlow
I originally intended to write this as a long tweet thread, but ultimately decided to organize it into an article to see how this format works.
Over the next few weeks:
(A few random thoughts in no particular order)
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Your spot holdings may face significant drawdowns—whether or not you choose to proactively mitigate risk is entirely up to you. This period could be extremely painful.
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If you can hold on (hodl) through this difficult phase, I believe the next upward move will be very favorable for certain key assets, potentially fully recovering previous losses.
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The market isn't "over." I expect a new bullish phase within the next 4–8 weeks. Reasons include Bitcoin dominance (btc.d) being high, seasonal factors, potential strength in Ethereum/BTC (ethbtc), and capital rotation across sectors. Additionally, positive government sentiment toward crypto and fewer macroeconomic headwinds theoretically create a favorable environment for markets.
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During the next rally, you should gradually become a full seller. I understand holding through the lows, but your exit strategy should progressively shift toward safer assets.
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Safer assets include Bitcoin (BTC) and stablecoins.
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As the market cycle progresses, you should gradually reduce risk and scale down position sizes, exiting via dollar-cost averaging (DCA) rather than all at once.
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I don’t have a clear prediction about the next market rotation. From here, I believe the market will primarily belong to traders, not hodlers. Some coins may attract strong buying interest while others rise slowly (e.g., XRP vs. TIA).
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It’s hard to predict in advance which coins or sectors will lead. Rotation-wise, it seems like everything might go up—but also that nothing goes up comprehensively. What I mean is: generic AI tokens will eventually surge, but likely only 1–2 will really explode (e.g., TAO could have an extreme run, while AKT might only gain 50%).
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Don’t stubbornly cling to your positions chasing unrealistic price targets. Many coins may never reach their all-time highs (ATHs) again. Sure, some major ones might, but a bull market doesn’t mean every asset returns to ATH. While anything is possible, I think 80% (or more) of coins won’t achieve this. Go with the flow and take profits wisely.
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If your portfolio is highly diversified, I recommend selling 50–75% or more of your holdings when the rotation ends during the next rally. For example, if AI tokens are surging and you’re holding FET, consider selling; or if you’re in RWA (real-world asset) tokens, take profits when ONDO performs well.
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In the recent rally, I’ve already sold many of the lower-conviction coins in my portfolio; I’ll reallocate those funds to higher-quality assets later.
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Over the coming period, you should focus on consolidating your investments—reduce the number of new positions and lower the overall diversity of your holdings.
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I’m unsure when the next sharp correction similar to summer 2024 will occur. I suspect we still have 3–6 months before the market turns ugly again. Whether this next downturn will be driven more by time (prolonged sideways action) than price remains unclear.
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This past summer, altcoins saw ~75% drawdowns, mainly due to price-driven capitulation rather than extended consolidation. Although those six months felt endless, compared to the 1.5-year range-bound periods for altcoins in 2018–2019 and 2022–2023, this correction was actually relatively quick.
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The market might enter what some call a “super cycle,” echoing the phrase “this time is different.” But I remain skeptical, so I’ll continue to act cautiously.
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My ideal goal is to keep my portfolio drawdown from all-time highs (ATH) around 30%. I know my risk tolerance—I could accept up to 50%, but 30–40% is a more comfortable range.
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Your job is to analyze data weekly and constantly reassess where we are in the market cycle and when the top might form. When the market starts turning, things can get messy fast. Even after a bull run ends, many people will still shout “the bull market is alive!” These shifts are always hard to predict—stay vigilant. Don’t try to forecast too far ahead; accept incoming information and adjust accordingly.
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Finally, do your own research (DYOR). Don’t blindly follow others—analyze independently and manage your own portfolio. Everyone’s trading approach differs. Don’t rely entirely on your favorite KOL’s exit strategy. Some may do well, but most could suffer serious losses. If you manage to exit with solid profits, you’ve already won. Good luck!
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