Review of recent phenomenal events in the crypto market: Where has the bull run gone?

In the past week, market changes have left many investors feeling confused. As a long-term investor, I would like to share my views on the current market and future outlook.

1. New breakthroughs in the AI field impact the market

A recent breakthrough in the AI field has made people realize that algorithmic innovation may temporarily surpass the improvement of hardware computing power. This event has dealt a heavy blow to the AI narrative in the crypto market, causing a significant drop in AI-related tokens. In light of this sudden situation, I had to painfully take profits on all my AI token positions on January 27.

Unfortunately, it must be acknowledged that this event has plunged the entire AI track into a predicament. Once the market narrative cannot continue, the decline of the entire track may be difficult to reverse.

2. The participation of political figures triggers market fluctuations

During the Spring Festival, many ordinary investors began to pay attention to certain tokens related to political figures. This reminds me of the craze in the A-share market during last year's National Day. At that time, many investors rushed in, but they have still not been able to extricate themselves.

Currently, some politicians seem to be participating in the crypto market through unconventional channels. This phenomenon made me realize that projects participated in by ordinary investors may not be comparable. Considering this, I decided to liquidate most of my meme coin positions.

3. Market Excitement Raises Vigilance

Recently, a rumor about a high school student making tens of millions through low-cost speculation has spread widely in the industry. Although the authenticity is questionable, this phenomenon brings to mind the market conditions just before the historical high of $69,000 in 2021. At that time, interns and ordinary community contributors were able to easily achieve huge returns.

The phenomenon where ordinary people can easily profit often indicates that the market is in a state of extreme euphoria, which may signal that the market top is approaching. Based on this judgment, I liquidated almost all altcoins on January 30, keeping only Bitcoin and a small amount of mainstream tokens.

4. Questions and Responses Regarding a Certain Trading Platform

Recently, the market's questioning of a large trading platform and its response has attracted widespread attention. As a former centralized exchange practitioner, I am not unfamiliar with such events. However, when these issues are made public, they often shake investors' confidence.

Such events may cause many people to doubt the entire industry, especially the token projects on the platform. This crisis of trust could have a significant impact on the market.

5. Future Market Trend Predictions

The current market adjustment is quite similar to the situation on May 19, 2021. If history repeats itself, we may experience about two months of consolidation, followed by a new historical high for Bitcoin.

However, there are also views that this may be the beginning of a bear market. Personally, I tend to believe this is a short-term adjustment, mainly based on the trend that Bitcoin is becoming part of the U.S. national strategic reserves. If the price of Bitcoin reaches the range of 85000-88000, I might consider increasing my position.

6. Current Investment Portfolio

Currently, my asset allocation is as follows:

• 40% Bitcoin
• 20% mainstream tokens ( include Ethereum, a certain public chain token, a certain meme coin, and certain exchange tokens )
• 40% stablecoin wealth management

Holding Ethereum mainly considers the investment trends of certain politicians and the fact that it has already fallen to a relatively low point. Holding tokens of certain public chains is based on the expectation that they may launch an ETF. Holding certain meme coins is due to the support from well-known entrepreneurs behind them. Holding exchange tokens is to prepare for the potential upcoming bear market.

7. Changes in Investment Strategies for Altcoins

The current speed of new token issuance in the market far exceeds the growth of new users and funds, which has rendered traditional altcoin investment strategies ineffective. An excess of choices has instead increased the difficulty of investing. In contrast, short-term trading strategies may hold more advantages in the current environment.

8. Suggested Asset Allocation

It is recommended to adopt the following asset allocation plan:

• 50% Bitcoin
• 50% Stablecoin Wealth Management

Consider investing stablecoins into high-yield financial projects. At the same time, you can reserve a small amount of funds for investing in projects you believe in or for short-term trading.

IX. Conclusion

Despite the ever-changing market, I hope these insights and suggestions can provide some reference for everyone. Whether pursuing significant investment returns or accumulating experience and connections, the journey in the crypto market is invaluable. Wishing all investors the best results in the new year.