TechFlow, August 1 — Crypto KOL 0xSun posted on social media stating, "Currently, there is a significant divergence between bulls and bears. I've initiated a hedging trade: going long on ETH while shorting a basket of altcoins, with positions roughly at a 1:1 ratio.
The rationale is that ETH has been the engine driving this current rally since late June. The main catalysts are institutions emulating MicroStrategy by raising capital through stock offerings to purchase ETH, and the stablecoin narrative, where ETH serves as core infrastructure and settlement layer.
Referencing the earlier case of MicroStrategy purchasing BTC, which drove prices upward, most altcoins ultimately underperformed significantly compared to Bitcoin. Similarly, funds raised by public companies and institutions for buying ETH are unlikely to spill over into other altcoins.
Data-wise, according to CMC, among the top 200 tokens over the past 30 days, only 20 have outperformed ETH—including Bonk, Zora, CFX, and ENA, which were clearly driven by specific positive events.
For selecting altcoins to short, I follow previous logic: prioritizing those with relatively high market caps but non-dominant status, weak price action, low visibility, and spreading shorts across multiple positions with proper stop-losses in place to prevent sharp spikes in any single asset.
If the second half of the year continues in a bull market, I believe it will still likely be led by ETH. If the market turns bearish, I don't think altcoins can remain unscathed—ETH at least has institutional buying providing a floor. The only scenarios that would invalidate this hedging strategy are either if an 'alt season' truly arrives, with most altcoins consistently outperforming ETH, or if ETH enters consolidation or leads the downside while other altcoins decline less. Based on recent months’ experience, I consider these outcomes less likely."
