This article is only a personal opinion on the market and does not constitute investment advice. If you operate according to this, you are responsible for your own gains and losses.
BTC is just a step away from its previous high. Look at two pieces of data:
At the end of September, there are less than 7 months left for the delivery of BTC futures contracts. Currently, there is a premium of 12.86%, with an annualized rate of over 22%. I remember seeing this premium only at the peaks of 2017 and 2021. Around February 20, this premium was 8%, then rose to 9% by the end of February, and recently rapidly increased to 12.86%. The corresponding annualized arbitrage space is 13.7%, 15.4%, and 22%. This indicates that since early March, a large amount of capital has entered and rapidly pushed up the premium of the futures contracts.
There are two ways to interpret this data:
From a spot perspective: the existence of future arbitrage space will stimulate the demand for spot purchases. Some people continuously buy spot while simultaneously shorting 1x coin-based contracts to obtain stable arbitrage income. This forms a virtuous cycle and is also the driving force of the bull market's spot purchasing power. As long as this premium space still exists, the purchasing power of the spot will continue to be guaranteed.
From an emotional perspective: based on my own experience, in the past bull markets, a normal premium of around 12%-15% annualized is quite common and normal. When it reaches around 20%, it indicates that FOMO emotions may have occurred in the short term.
Now let's take a look at the current greed index, which has reached 90. The last time this value was seen was in November 2021. A value of 90 also indicates that the short term has entered the FOMO stage.
It is important to note that: the index providing a FOMO alert does not mean that the price will immediately fall. It is also possible to continue to maintain the FOMO state for a period of time. However, a characteristic of entering this stage is: the volatility will significantly increase. So the difficulty of contract trading will significantly increase. The trading suggestion is: high leverage contract trading should be avoided. You may even consider closing the contract position periodically. Wait until everything returns to a normal stage before rebuilding the contract position.
In a bull market, there is actually no need to worry about a pullback in the spot market, and I don't think it is necessary to sell spot. During the FOMO stage, any trend is possible. The key is to remain unchanged and remember to enter when the pullback comes. When the US stock market opens at night, there may still be a chance for the price to once again challenge the previous high, or even break through 70,000 in one go, attracting a large amount of sidelined funds to enter, further fueling the FOMO sentiment before making a retracement.
Finally, let's take a look at the exchange rate of ETH. I believe that the exchange rate of ETH has likely bottomed out. The weekly divergence is very clear. If the candlestick of the week of the 18th is considered as the starting point of a new round of exchange rate rise, then it is currently in the second wave of retracement, and it has already entered the final stage, with not much room left for the exchange rate to fall. The leading market trend of ETH should not be far off.
Follow me and maximize trend profits with minimal operations.
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