This article is only a personal market opinion and does not constitute investment advice. Any trading based on this is at your own risk.

Both the statements from the Ministry of Commerce and Vance expressed a sense of easing, leading to a market rebound. The strong stance from the U.S. side caused uncertainty, resulting in Friday's decline. However, the easing of attitudes from both sides, combined with the fact that tariffs are not currently in effect, alleviated a significant portion of the panic from last Friday, allowing the market to naturally stop falling and recover. The article from the day before predicted that the situation would ultimately ease; currently, both sides are making statements to create negotiation leverage, but the pace of easing is indeed quite rapid. It is evident that the U.S. does not wish to see further declines in the capital markets.

In comparison, the U.S. stock market and A-shares have not been severely impacted, which can be seen as a normal correction after substantial floating profits, akin to a healthy washout. However, the cryptocurrency market on Monday is already a different one from that on Friday; behind the $19 billion in liquidations, many people's positions and holdings are no longer there.

Looking back at this cryptocurrency market correction, BTC and ETH have shown relatively normal trends, reflecting the performance and market depth expected from large-cap assets. However, the decline of altcoins has exhibited significant liquidity issues, highly reminiscent of the liquidity crisis during the March 12 event in 2020. Therefore, it is quite indicative; if there is still an altcoin season, it will likely occur in the upcoming period, as this is the time when altcoins are easiest to pump.

During the crash in the early hours of October 11, many altcoin trading pairs against BTC and ETH saw massive trading volumes. A large amount of BTC and ETH was exchanged for various altcoins to enter at the bottom, which also serves as the foundation for pumping altcoins.

It’s the same old logic: the more expensive something is, the less retail investors buy (previously only BTC, now BTC + ETH), making it harder to sell to retail investors. Therefore, only by explosively pumping cheap altcoins can more people be attracted to buy them, and then offload them to retail investors. The entire process starts with using BTC and ETH to buy altcoin chips at absolute low prices, managing the chips well, and then after pumping, converting them at high prices into USDT, ETH, and BTC to complete the offloading.

You can also search for trading pairs of interest to verify this. During the drop on Saturday morning, there were significant volumes in BTC and ETH trading pairs, suggesting greater potential for subsequent market movements. If my judgment is correct, the following market behavior should show that altcoins have smaller declines but larger increases, while BTC's market share continues to decrease.

Returning to BTC, from a daily perspective, BTC has been operating above a trend line since late April, with prices repeatedly finding support at this trend line, and this time is no exception. With the easing of tensions, the low point of this correction has likely already occurred; even if there is a second test, it should not fall below the daily K-line lows of October 11 and 12—at 109,600. If anyone bought in these past two days, I personally believe that as long as it does not break below the trend line, it can be held for a while longer.

In fact, if you flip through the K-lines of BTC and ETH and combine them with external events, a similar market situation occurred in late June this year. On June 21 and 22, the conflict between Israel and Palestine escalated sharply, and U.S. B-2 bombers attacked Iran's underground nuclear facilities. Similarly, the cryptocurrency market experienced a significant drop over the weekend, preceded by a long period of substantial range-bound fluctuations. BTC and ETH briefly fell below the range, but then also saw a large bullish candle that directly engulfed the previous drop, returning to the range. In the absence of further negative news, this is quite indicative. As long as ETH does not fall back below 3,870, I personally believe it can be held.

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