"CT Chinese · Crypto Circle Open Mic" is a monthly crypto audio interview program created by Cointelegraph's Chinese site, airing on the last Thursday of each month at 7 PM. The show invites core practitioners and observers from various fields such as blockchain, Web3, DeFi, stablecoins, the Ethereum ecosystem, and policy regulation to discuss industry hot topics, market dynamics, and in-depth perspectives in a relaxed and open dialogue atmosphere, presenting a more authentic, diverse, and cutting-edge crypto world to the audience.
This episode's theme is: The Rotation of Crypto Assets from an Insider's Perspective, the Strengthening of ETH, and Altcoin Selection Strategies.
Our invited guests include:
- Alec, Growth Lead at the DEX project Hyperion
- 0xToolman, Analyst at the blockchain data visualization platform Bubblemaps
- Well-known KOLs from the Chinese community, Tang Eleven and Zhang Zhang
(The audio transcription has been processed by AI, with some content edited for brevity. For the complete audio, please visit the X platform.)
Host Eva: Welcome everyone to our Cointelegraph Chinese AMA event tonight. I am your host, Eva. The theme of this AMA is "The Rotation of Crypto Assets from an Insider's Perspective, the Strengthening of Ethereum, and Altcoin Selection Strategies."
First, we are very honored to invite our four guests today, including Alec, the Growth Lead at the DEX project Hyperion, Toolman, an analyst at the blockchain data visualization platform Bubblemaps, and our two well-known crypto KOLs from the Chinese community, Tang Eleven and Zhang Zhang.
Before we start with today's questions, let's have our guests introduce themselves and greet our audience, starting with Alec.
Alec: I'm glad to chat with everyone about today's theme. I have been involved in primary investments in the crypto space for three years, and I usually make many blue-chip investments, mainly focusing on occasional cyclical trading.
Toolman: I am an analyst at Bubblemaps visualization platform. In addition, I help different market makers and funds with their analyses, so I am happy to share my views on this theme with everyone.
Tang Eleven: Hello everyone, my name is Tang Eleven. Thank you for the invitation from CT, and I hope everyone will take care of me.
Zhang Zhang: Hello everyone, I am very happy to be invited by CT to participate in today's AMA.
Host Eva: Thank you, everyone. Let's start with our first question about the big trends. As we all know, in previous crypto cycles, funds often rotate from Bitcoin to Ethereum and then to altcoins. So, my first question is for Alec: Can you analyze the driving factors behind this rotation? Is it due to changes in market sentiment and fundamentals, or a combination of both?
Alec: If we look at this cycle compared to previous ones, I can say that market rotation is like a dam, where water flows from a higher level to a higher water level, then gradually irrigates layer by layer, similar to a stepwise process. From Bitcoin to Ethereum to more smaller coins, it’s like a natural sector rotation concept.
In this cycle, there is still some rotation phenomenon. Specifically, it flows from Bitcoin to Ethereum, then to platform coins, and stops there. It indeed fits the theme of rotation, but I believe its internal driving factors are not like before, where it flows down layer by layer, but rather an objectively trend-driven rotation, not driven by macro liquidity overflow.
Specifically, it can be explained that Bitcoin initially rose due to market price expectations and served as a safe haven, mainly due to market price expectations and macro overflow from dollar printing into Bitcoin. This logic has always existed.
Ethereum mainly has its low point, and its value has aspects that can be discussed. Objectively, from the chip level, it has also undergone a long period of washing, and the chips have been cleaned up quite well, making it easier to pull up.
Solana also has its stock and strategy as driving factors. Platform coins are mainly driven from a value perspective. For example, Binance is the largest liquidity platform in the crypto space, so its Binance Coin will be a value-driven asset. OKB is also due to X layer.
This rotation is more aligned with traditional stock markets, and we can use some understandable value investment logic to explain its rotation, rather than simply liquidity overflow.
So, from this perspective, assets that cannot be explained by value logic will not have the same liquidity as before. I think this perspective on the current rotation is a reasonable direction.
Host Eva: Alec, where do you think we are in the rotation now? Previously, we saw Ethereum pushing towards the $5000 price level. Of course, it has slightly retreated in the past couple of days, but some people in the market, like Tom Lee, are still calling for further upward movement. Do you think we have rotated to Ethereum and reached a mid-term point, or has Ethereum's rotation completed, and we should look at platform coins or other altcoins next?
Alec: I understand. This question is actually about considering a larger framework and macro perspective, which is a suitable point. In previous cycles, we felt that rotation was from top to bottom, flowing down to the bottom. Then there would be a four-year bear market, and the next round would start rotating again.
In this cycle, I have seen many people calling for an eternal bull market, but indeed Bitcoin and the overall crypto market have become more involved with traditional financial markets, attracting more attention from mainstream investors and traditional funds, including U.S. pensions and those regulations. Therefore, its volatility and cyclicality may not be as pronounced as before.
Currently, I believe that although we have rotated from Bitcoin to Ethereum to platform coins, I think there will still be a second and third wave of rotation.
I believe we are now at the stage of Ethereum, moving towards platform coins. However, this stage may last a very long time, and there will be repeated horizontal movements between Ethereum and platform coins, where they will mutually increase, and Bitcoin may also increase. This flow will continue and repeat, rather than just abandoning it at a certain stage.
Host Eva: Understood. Toolman, as an analyst, do you have any additional insights on this issue? Can you analyze from a data perspective whether there are any indicators in the market that reflect this capital rotation?
Toolman: I think, first of all, I agree with what Alec said, that this cycle may not be the same as previous cycles.
The first effect I think is the wealth effect, meaning that a few years ago, the liquidity ratio of BTC was high, and ETH was also higher than altcoins. So, when BTC rises, people have funds to buy ETH and altcoins, leveraging relatively small amounts of capital to drive their significant increases. However, the reverse cannot be done; that is, if altcoins rise, you cannot use the profits to buy ETH or BTC to drive ETH up significantly. So, it must be a top-down effect.
I think there are also some self-fulfilling phenomena in the previous two cycles, proving that this phenomenon is real. In previous cycles, it was BTC to ETH to altcoins, but in this cycle, initially, only BTC was rising, and BTC's dominance continued to rise to about 80%. Many people thought this cycle was over and that it wouldn't rotate to altcoins. However, when altcoins started to rise, people realized that it had returned.
So, I think there are some self-fulfilling situations: if altcoins rise in this round, people will believe in the impact of rotation. Then, when altcoins rise at a certain time, people will also believe that this cycle continues to exist.
From a data analysis perspective, the first data to look at is BTC's dominance data. If it continues to rise without a peak in sight, we may not see the existence of an altcoin season. If it starts to decline, we can confirm that altcoins may have begun.
As Alec mentioned, many of the recent rises in BTC and ETH are driven by traditional financial institutions.
To address the issue, there are two points. First, we need to know whether an altcoin season will come. The first thing to look at is whether traditional funds and traditional financial markets will pay attention to these altcoins. Currently, we are only focusing on BTC and ETH, which have good reasons for attention. For example, BTC is a good digital gold, and ETH is a programmable blockchain. The question is whether traditional financial markets will pay attention to different altcoins.
The second question is that the number of altcoins this year is more than 100 times that of four years ago. I think many altcoins are present, but will all altcoins rise? I think the opportunity for that is quite small.
If certain quality altcoins rise, I think that is more likely to happen. We can select which altcoins are better based on the data and price trends of different sectors.
Host Eva: Speaking of the timing of rotation, Toolman, I want to ask how you usually look for entry signals. What phenomena or news points make you feel that it might be time to start buying?
Toolman:
I will directly say what indicators I look at for buying ETH in this round. I believe the rise of ETH mainly comes from two sources: the aforementioned stock coins and ETF funds. At these two levels, we can look at some different indicators. The first is the stock price trends of the stock coins themselves, and we can also look at their market cap divided by their holdings ratio, and finally, we can look at the net flow of ETFs—these three data points.
The stock coins refer to institutional-level vaults, for example, Ethereum is held by SBET and BitMine as ETH vaults. Their stocks can generally be bought, and they can continue to use funds to buy ETH, creating a flywheel effect. When they buy in, it can be considered a medium to long-term investment rather than short-term speculation, so this serves as a good indicator to determine whether the sector has started to rotate or rise, as it is medium to long-term.
From the perspective of altcoins, we can see whether the market cap of these stock coins divided by their holdings is greater than 1, meaning their market cap is already higher than their holdings. This indicates that there is some premium present, which could be due to high market expectations, insufficient liquidity, or good speculative sentiment, making this situation favorable for these altcoins.
If this ratio is less than 1, it indicates some discount, meaning the market is unwilling to pay the intrinsic value of the tokens that the stock coins have already acquired. This could also be due to insufficient liquidity, lack of confidence, or low transparency, leading to increased risk.
Therefore, if we see a good ratio for these stock coins, we can determine that an altcoin season has already begun.
Host Eva: Next, I would like to ask Tang Eleven, based on the current on-chain capital flows and trading data, do you think the rise of ETH in this cycle is driven by short-term sentiment, or could it evolve into a more long-term trend? I've heard many people in the market say that ETH might not just aim for $5000, but could even target $10,000.
Tang Eleven: My understanding is that this marks the beginning of a long-term trend. The momentum for Ethereum in this round actually started with the RWA series, meaning that after institutions buy Ethereum, they will set up nodes. As Ethereum is the public chain of the crypto world, it basically has no downtime, while other public chains still carry the risk of downtime.
When traditional finance enters the crypto space, stability is the most important factor, so I believe this will be a long-term trend.
Recently, there have been significant fluctuations, such as when a Bitcoin whale sold a large amount of tokens, causing a flash crash that also affected Ethereum. From the whale's actions, it seems they are more inclined to switch to Ethereum, which indicates a long-term bullish outlook.
I believe that Ethereum breaking through $10,000 should not be a problem, as I think the crypto space has two indicators: Bitcoin and Ethereum. I believe Ethereum's potential should exceed $5000.
Host Eva: Right. You mentioned it might rise to $10,000. Do you have a timeline for when you think it could reach that number?
Tang Eleven: To be honest, right now it's purely the U.S. institutions providing support because many retail investors have been deeply hurt. Since the last round when Ethereum hit $4800, many years have passed, and many retail investors no longer hold tokens. Now it's about building confidence; the narrative is influencing people.
I think it might take one to two years, and then it will be a FOMO situation. I believe the rise from $5000 to $6000 to $7000 might be slow, but the jump from $7000 to $10,000 will be quick because it represents an accelerating upward trend. My prediction is within the next 2 to 4 years.
Host Eva: This logic sounds very similar to what we often say about effort: it's hard to go from 0 to 1, but it becomes much faster from 1 to 100. Alec, what do you think about this issue? Are there any long-term trend signals that can help us make judgments?
Alec: I select targets from a value perspective and determine trading timing from a technical perspective.
Toolman just mentioned some indicators, and there are a few that are sufficient for judgment because there are too many market signals. If you look at all of them, it’s easy to find that 50 people are bullish and 50 are bearish, which can be confusing.
I generally only look at one thing: the crossover of the daily EMA, specifically the daily EMA20 and daily EMA200. When it comes to selling, I usually sell in batches, and when the daily EMA20 crosses below the daily EMA200, I clear my position. I generally operate this way. I feel that when it’s about to consolidate, I will slightly reduce my holdings. Just looking at the fundamentals cannot facilitate trading.
Host Eva: Thank you very much, Alec, for honestly sharing your investment strategy with us. Speaking of altcoins, some friends around me tell me that altcoins are only suitable for shorting. However, from an investment return perspective, going long might yield much higher returns than shorting.
I want to ask Toolman, when you deal with altcoins, which aspects of the project do you focus on? For example, the team, technology, or its community engagement?
Toolman: I think all of those aspects can be considered—team, fundamentals, etc. However, there are a few indicators I can specifically mention.
The first is market capitalization, which is FTV. Many beginners make the mistake of looking at the price of the coin without considering its market cap, but this market cap generally indicates whether the token is expensive or not. If you look at various tokens, you can roughly understand what market cap corresponds to different conditions, allowing you to determine whether a token is cheap or expensive. We buy the cheap ones and avoid the expensive ones.
Regarding the team, I find the term "team" a bit vague. I think we can look at two main abilities: first, whether the founder can tell a compelling story, and second, whether the team can manage the token's price.
I believe the founder's storytelling ability is crucial; the founder needs to have marketing and business development skills, possibly having many followers on Twitter or being able to attract significant traffic on that platform.
The ability to tell a story essentially determines how many people can see the project and how many are willing to buy into the token's narrative. This is very important because no matter how good the fundamentals are, if no one knows about the project, it is useless.
The second aspect is whether the team has the ability to manage the token's price. Often, when the team announces certain information, they need to respond to bullish market conditions to drive the price up effectively. If they can only announce new features at any time, they cannot effectively capture attention or ride the wave.
Therefore, I think we can assess whether the team has marketing capabilities. If they can seize market timing to drive the price up, it usually indicates that their token will perform well.
Host Eva: Zhang Zhang, do you have any altcoin selection strategies that you can share with us from your experience in the altcoin market?
Zhang Zhang: Personally, I consider two aspects when selecting altcoins: fundamentals and hype.
I believe these two aspects complement each other. For example, in 2023, many coins surged by several times just because Elon Musk tweeted, but the projects themselves had no real functionality, and over 90% of those coins eventually fell back to their original state. Those retail investors who chased the hype ended up getting trapped.
On the other hand, having good fundamentals without hype is also not enough. For instance, some altcoins in the public chain space may have advanced technology like zero-knowledge proofs, but if their community only has 500 people and no one is talking or providing liquidity, even the best fundamentals won't lead to price increases.
I first filter out some reliable projects based on fundamentals, and then wait for a wave of hype, such as being listed on major exchanges or receiving investment from top VCs. At that point, I will buy. This way, I have both a safety net and can benefit from the hype.
Host Eva: However, Zhang Zhang, you also mentioned that many coins fall back to their original state after the hype fades. From this perspective, is it not a more prudent choice for investors to short, knowing that a coin has already risen and that the hype may pass, so they can safely enter and short?
Zhang Zhang: I am also a short seller. I believe that for many coins that surge significantly, I will pay attention to them.
Host Eva: Next, I want to ask Alec, if Ethereum has peaked and altcoins start to rotate, how would you advise investors to arrange their sell-off or reduction strategies to ensure safety or maximize returns?
Alec: Here, we actually consider two situations: one is holding ETH, and the other is holding other altcoins. The reduction strategies for these two situations are quite different.
For Ethereum, each token has a pressure level, including previous high pressure levels, etc. I generally reduce my holdings at pressure levels, and if I determine that the daily and weekly trends are still intact, after reducing my holdings, if there is a sharp drop, I will buy back in batches. When the daily EMA20 crosses below the daily EMA200, I will clear my position. This is generally how I operate with Ethereum, completely based on technical analysis.
For altcoins, it’s actually more complex. I usually don’t hold altcoins for long. First, when buying altcoins, I generally look at the narrative, the distribution of tokens, and the team's structure. The team's structure mainly looks at costs—how much the team has spent on marketing and how much they have invested. To recoup their investment, they need to drive the token price up, allowing them to sell and recover their costs. Generally, I find teams that have invested significantly in marketing, narrative, and development to be more reliable and willing to buy because they need to drive the price up to profit. This is how I select altcoins.
When selling altcoins, I mainly look at trading volume because you never know what the market makers are planning or how high the price can go, making it easy to miss the selling opportunity. I primarily look at trading volume to decide when to sell.
For example, previously with OKB, when it surged to over $200, there was a massive trading volume in one hour. Generally, such high trading volume indicates that those holding a lot of tokens are selling, so I would follow suit and sell a bit. I mainly look at volume for selling, and that’s about it.
Host Eva: Alright, speaking of OKB, that really hits home for me. As a long holder, I’ve been heavily trapped at the peak. Tang Eleven, do you have any risk control tips to share with everyone based on your actual operations?
Tang Eleven: For Ethereum, I buy spot as gas fees. For other altcoins, I tend to do contracts, using low-leverage contracts, similar to buying spot. This is because the liquidity of spot trading is definitely not as fast as contracts. If you hold spot and it really starts to crash, you can only escape by cutting losses.
In terms of risk control, I think if you are a risk-taker, you might continuously increase your risk exposure to seek high returns. If you are not a risk-taker, your exposure won’t be very large, and your losses will also be limited.
This also depends on personal strategies. I think it’s best not to chase after rising prices. For example, with OKB, I analyzed that when it was around $100 to $120, it fell back to the $80s, which was actually a good entry point. If you are optimistic about its ecosystem, it can also be a long-term hold because OKB is backed by OKX, which is a comparable asset.
Another coin I think is interesting is CRO. I have also analyzed it on Twitter. Its unique feature is that when the market is bad, it declines steadily, and you can clearly see the bearish trend on the K-line, with a 45-degree downward slope. However, when the market improves, it can surge 3 to 4 times in a week. This coin serves as a small auxiliary for my market observations. A few days ago, it was invested in by Trump, and it surged dramatically. This coin is also listed on the Hong Kong Stock Exchange, and I have downloaded its app, but I found that users from mainland China seem unable to register.
Host Eva: Alright, for our last question, I want to ask Alec again. If this rotation continues, what kind of impact do you think it will have on the overall market structure? Additionally, there is a voice in the market saying that previously it was a 4-year bear market followed by a 1-year bull market, and that this bull market will pass quickly. However, many people now believe that this cyclical nature may be broken, and some big names in the media have stated that our current bull market may last until 2028. What are your thoughts on this issue?
Alec: First, regarding the first question about how the ongoing rotation will play out, it’s actually quite understandable because each cycle's rotation is connected by underlying factors. For example, in 2021, people were looking for projects that were the most Ponzi-like to invest in.
The narrative this time is about stock coins, which are leveraging liquidity through coin valleys, stepping on one foot and then the other. It’s quite simple: any altcoin that embraces stock coins and this liquidity can be focused on and explored.
I actually pay a lot of attention to this area, looking at the larger ecosystem or blue chips that are linked to stock coins, to see how they are performing in this regard, and then I can keep an eye on them.
In any case, the primary narrative for altcoins is important; once there is a narrative, we can look at other factors. For instance, we established ourselves on Aptos because its narrative aligns closely with that of the U.S. If they want to develop stock coins, they should have a good advantage in the West, with better resources and positioning. Ultimately, it’s all about the narrative—whoever chases the narrative can be followed.
The second question is whether the cycle will continue. Personally, I hope and believe that this cycle may not be as obvious as before. Regardless, cycles will definitely exist, but due to the larger volume of funds entering the crypto space and the increased attention from Web2, the volatility may decrease. On one hand, the larger influx of funds reduces volatility, and the investment philosophy of Web2 funds tends to lean more towards the long term, which may objectively lower volatility.
Thus, the reduction in volatility may lead to a perception that cycles are not as pronounced, or that bull market cycles are longer.
I objectively believe this, but in practice, I will also pay attention to technical indicators. If my sell-off indicators are triggered, I won’t care about any eternal bull market; I will just exit.
Host Eva: Alright, Toolman, what are your thoughts on these two questions?
Toolman: I think if this rotation indeed flows into altcoins, it will increase confidence in the rotation, and perhaps every cycle will continue like this, leading to a self-fulfilling situation.
However, I also think this situation may not necessarily occur because there is a saying in the financial field: "This time is never the same." If something were always the same, everyone would be making money, but that situation cannot exist.
Host Eva: Tang Eleven, do you have any additional thoughts on this issue?
Tang Eleven: I have also thought about whether it’s a 4-year cycle or an eternal bull market, but I haven’t come up with a definitive answer. I might hope for an eternal bull market, as there are assets involved, and if we enter a bear market, your assets will shrink, which can be quite painful.
I think it also depends on whether a black swan event occurs. After all, no one knows when such a black swan will arrive, so one must make a judgment and be decisive when that day comes. Currently, the market situation seems to have low volatility; the instances of major flash crashes have become quite rare. I feel that the market is currently good, but it’s just a matter of when a black swan might appear. Personally, I feel like we are already experiencing a sense of the end of a bull market.
From several phenomena, such as the influx of money into various USDT financial products, many investors in spot trading are not optimistic about the investment cycle over the next six months and are gradually liquidating their positions. If we judge based on a 4-year cycle, we are actually nearing the end of the bull market because I believe the main narrative theme this time is the meme theme, which has essentially run its course.
I think a larger reason is that Trump is innovating in the crypto space; his projects are present in the crypto world, which indicates that U.S. capital is still active in the market. I feel that in this round, the entrepreneurial capital in the Chinese-speaking community has not seen much investment.
I have also asked some people, and they said they are basically not investing anymore. At this time, they are not making moves and are waiting for the bear market to start before they will act because investing at high valuations now would lead to significant losses.
Host Eva: So, there are still some people who have already taken profits and are preparing for the next entry opportunity.
Thank you very much to our four guests for their wonderful sharing, and thanks to all our listeners for their enthusiastic participation.
Tonight, our AMA delved into some trends behind Ethereum's strength, altcoin selection strategies, capital rotation logic, and risk control methods. We hope everyone can gain some practical insights and operational guidance from this discussion.
Of course, I would like to remind everyone again that market risks should not be overlooked, and investment requires caution. I hope everyone can seize opportunities and grow steadily in the future market rotations.
We also thank Alec, Toolman, Tang Eleven, and Zhang Zhang once again, as well as all the online listeners. We will see you at the next AMA.
Related: Bitcoin (BTC) "horn" pattern points to a target of $260,000, technical indicators issue "oversold" alerts.
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