유명한 KOL Phyrex와의 대화: 언제 정점에서 벗어나야 할까? 거시 분석이 답을 알려준다

This episodes guest: Phyrex, Twitter @파이렉스_니

*The following text is for sharing only and does not constitute any investment advice.

요약

1. Investment Strategy

1. Fund size and allocation ratio: The size is unknown, 90% is allocated to large currencies with good liquidity, and 10% is allocated to small currencies

2. Expected return: one time

3. Ability to withstand drawdown: BTC, ETH and BNB are not worried about drawdown, and they are prepared to hold for another four years; Altcoins are basically free, and they are not worried about drawdown.

4. Trading logic: large cycle timing and fixed investment

2. The content of this issue is summarized as follows

• About buying at the bottom and selling at the top: Is the market bottom now? When will it peak?

There are two types of data that can be used as reference for judging the cycle, one is macro data and the other is on-chain data.

Let’s talk about the macro data first.

• There are three conclusions about the bottom:

1) The current ups and downs are all due to emotions under poor liquidity. If the U.S. economy does not enter a recession in July, August, and September, and no black swan appears, there is a high probability that the market will continue to fluctuate widely in these three months until September, entering the pre-election stage.

Next is the election cycle, which is generally favorable for risky assets and relatively bullish.

If an economic recession occurs, then the current price level is definitely not the bottom, and a larger gold pit will appear.

2) Economic recession can be observed through the unemployment rate. When the United States experiences an economic crisis or recession, the unemployment rate will be above 5.2% or 5.4%. Powell also mentioned in some meetings that when the unemployment rate exceeds 4%, the Federal Reserve will consider whether to cut interest rates in advance. Because from the Federal Reserves perspective, their expectation for the unemployment rate in 2024 is 4.2-4.4. If it exceeds 4.4, it means that the economy has begun to get out of control and will gradually shift towards recession. When the unemployment rate gets higher and higher, the probability of triggering an economic recession becomes greater and greater. Although interest rate cuts may bring certain promotion to the market, from a longer period of time, high unemployment rates may eventually evolve into an economic recession. For a more detailed analysis, you can check out Ni Das two articles on the theme of The Last Drop.

https://x.com/phyrex_ni/status/1723975178927890703?s=46

https://x.com/phyrex_ni/status/1785604678606369221?s=46

3) There is no absolute bottom, find the bottom range that suits you and make fixed investments. If you are long crypto and are willing to buy at the bottom, you can split your positions at the set price. Every time the price drops by a certain amount, add a position that you can afford. Ni Das own strategy is that if BTC falls below $56,000, I will buy 1% of ETH in the 30% position for every $1,000 drop; if it falls below $50,000, I will buy 2% of ETH in the 30% position for every $1,000 drop; if it falls below $40,000, I will buy 3% of the 30% position, and so on. The reason for buying the bottom of ETH is the spot ETF, betting that the increase will exceed BTC.

• Regarding the top, Ni Da judged that this cycle is probably a double top or a triple top:

1) The first peak is the approval of Bitcoin spot ETF;

2) If the U.S. economy does not experience a recession before the election, then it will be a double-top structure, and the second top may be the beginning of a monetary easing;

3) If the U.S. economy enters a recession before the election, then it will be a three-peak structure. The second peak is the U.S. election, and the third peak is monetary easing.

The above top expresses the top of relative prices.

• On the chain, three data have been proven to be relatively accurate/valid:

First, for long-term holdings of NUPL, when it reaches the red area, it is time to buy the bottom of the big cycle.

Second, for long-term holders who have held positions for more than one year, when the long-term BTC reaches the bottom, it basically corresponds to the relative high point of BTC, which is an opportunity to escape the top. When long-term holders begin to decline at the top, it is basically a good time to buy the bottom.

Third, the market value of stablecoins. It is recommended to pay more attention to USDC, because it can better reflect the data of compliant investors in Europe and the United States, and these investors are undoubtedly the leaders of this cycle. When the market value of USDC continues to increase, it means that a large number of investors have converted US dollars or euros into USDC and entered the market. When the market value of USDC decreases, it means that investors have exchanged cryptocurrencies for stablecoins, and then exchanged stablecoins for legal currency and left the market, completing a cycle of buying and selling.

• How to grasp the trend based on cycles?

Cycles are divided into large cycles and small cycles.

The big cycle is the Federal Reserve’s monetary policy, such as raising or lowering interest rates, which represents whether the currency is loose or tight.

The small cycle is to judge whether it is in the early, middle or end of the interest rate hike? Is it entering a pause in interest rate hikes, or entering the end of the pause in interest rate hikes? Looking back at historical data, we can find that:

1) The initial period of the rate hike was a devastating blow to the entire risk market, whether it was cryptocurrencies or US stocks, they were basically falling. However, at the end of the rate hike, the entire risk market rose.

2) From a general perspective, we have entered a cycle of suspending interest rate hikes, which is beneficial to the risk market.

So from an operational point of view, sell when the interest rate starts to rise, and start buying when the interest rate reaches the bottom and people have begun to predict that the interest rate hike will be suspended. When it comes to the interest rate cut cycle, if there is no economic recession in the early stage of the interest rate cut, you can still hold your position. If there is an economic recession, then selling is a better choice. After such a cycle, you may not be able to escape the top accurately, but you can definitely get 70% of the entire rising cycle, and the risk is very low.

There is another cycle, that is, the more it falls before the mid-term election, the more you should buy, because it is likely to rise more after the mid-term election. According to historical data, 14 out of the past 15 times have been like this, and there is at least a profit margin of 40%-50%.

• After the ETH spot ETF is officially approved, is it a good time to sell ETH?

Let me first state the conclusion: As far as Ni Da’s own operation is concerned, he will not sell the News. Two reasons:

First, looking back at the process of BTC spot ETF, more than 90% of the people who bought ETF at the beginning have been holding on to it and have not sold it until now. In terms of price performance, after the decline of BTC ETF Sell the News, there was a correction for about two weeks, and then it rose from 40,000 US dollars to over 70,000 US dollars. Even if there is a sharp retracement now, it is still higher than the price when Sell the News was released.

Second, investors themselves have a kind of FOMO emotion. After the BTC ETF, there was a FOMO period of 5 months. If the ETH ETF also has a similar FOMO period, the 4 to 5 months from July will be the US election. It is both a crazy period for the rise of ETFs and a stimulus period for the market due to the US election. The explosive power under the double superposition may be higher than the explosive power of BTC when there was only the stimulus of ETF.

Ni Da expects the capital inflow of ETH ETF to be 20% of that of BTC ETF.

If you want to follow ETF-related news, there are two analysts from Bloomberg that you can follow, one is Eric (Twitter@EricBalchunas) and the other is James (Twitter@JSeyff).

• How should people who want to invest in BTC and ETH build their own investment strategy?

Take Ni Da’s two fixed investment strategies as a reference:

The first one is experimental. Every month, you will invest 3,000 RMB to buy BTC and ETH on the 10th, regardless of the price. Invest for more than two cycles to see the returns.

Second, as long as the price of BTC falls below the set point, I will buy more as it falls, and the point at which I will stop buying is when the price exceeds the fixed investment line. For example: I bought a 1% position at 56,000, and a second 1% at 55,000. After falling below 50,000, the bottom-fishing position changes from one point to two points, that is, I bought a 2% position at 49,000, and another 2% position at 48,000, but if it rises back to 51,000, I will stop buying, and I will continue buying if it falls back to 47,000.

• As a KOL, how do you view and filter other KOLs’ sharing?

Ni Da’s core point is that the information we absorb is a collection of a person’s knowledge, such as why a certain track is good, how to view the fundamentals of a project, etc. Information such as positions and long and short positions is not very meaningful because no one can always be correct on this.

Ni Da has a little bell list of 40 accounts, which includes macro, micro, trading strategy, and market trends. He spends 3 to 4 hours a day browsing and reading the posts sent by these accounts in 24 hours, enriching the information source and broadening the knowledge. The IDs of these 40 accounts are also posted here, and everyone is welcome to follow them. (These 40 people are equivalent to Ni Das personalized algorithm for obtaining information, which is very valuable)

Media Organizations Institutions

@CoinDesk @BitcoinNewsCom @BitcoinMagazine @BitMEXResearch @Grayscale @WatcherGuru @Blockstream @BitwiseInvest

personal

@Vivek 4 real_ @zerohedge @saylor @pete_rizzo_ @EricBalchunas @intangiblecoins @HHorsley @WhalePanda @sassa l0 x @JSeyff @paulsperry_ @MetaLawMan @M_McDonough @EleanorTerrett @nikhileshde @crypto @bitschmidty @NickTimiraos @Gallup @bergealex 4 @VitalikButerin @blknoiz 06 @Claudia_Sahm @profplum 99 @dr_andrewlaw @evilcos @ThorHartvigsen @Rewkang

3. Final Thoughts

Ni Da first entered the industry by investing in early-stage projects. Later, he lost money in trading and began to study macroeconomics. For a sensitive person, uncertainty is the most unacceptable, so looking for certainty in the industry, such as the impact of the macro cycle on the track, is Ni Das entry point. I think output is the best way to learn, and it is also an opportunity to correct errors and communicate. I look forward to sharing more.

Full Interview

FC:

Lets start now. I wont tell you the reason for the invitation, because everyone knows who you are. Im curious about what kind of experience made you a KOL now. Can you give us a brief introduction?

Phyrex:

I started to enter this market in 2017 and 2018. Before that, I was engaged in the acquisition and merger of game companies. At that time, we mainly made childrens games, which we thought was a relatively good track. Later, our LP said that this track was relatively bad, and you didnt do it very well. There might be a little money in the account, and you can do something else. It was the time of ICO at that time, so I tried to do cryptocurrency. If it succeeded, it would succeed. If it didnt, forget it. I accidentally entered the Crypto market. It happened that in 2017 and 2018, ICO was basically coming to an end, and I didnt make much money. But I took this opportunity to start working on Weibo. Later, Weibo began to be gradually blocked, and many friends said they started to switch to Twitter. I was in charge of our small fund at that time. It was very, very difficult. The difficult situation was that even if you had money, it would be useless. You might have a chance only if you incubated some projects. If you invest yourself, you basically wont be given a chance (to make a move). It is still the same now. If you are a Chinese fund and you want to get some of these high-quality projects, you basically have no chance. So at that time we were thinking, when your personal influence is bigger, will you have the opportunity to invest in some better projects? Unexpectedly, the fund did not make money, but I kept doing it, and kept doing it. I think writing is a hobby and it is quite pleasant. Once I went to a KTV with some friends for a social gathering. In the 40 minutes they were drinking and singing, I had already typed an article of about 3,500 words, and it was all sent out.

FC:

So what is your motivation to keep writing?

Phyrex:

I think many friends have been anxious, especially when the price drops like now, should I sell, close or cover my position? I will also be very anxious, especially when the position is heavy. Many friends know that my Ethereum with a cost of 3600 fell to more than 800 at the lowest, and I didnt sell it at that time. Do you think I cant be anxious? Although I have been covering my position, you dont know when it will be the bottom, and whether it will reach double digits? Like 2018 and 2019, it reached more than 80. So in this case, because of this anxiety, you are forced to learn whether to sell or take, and if you want to cover your position, at what price to cover your position, will it lower my cost, and it will not involve too many positions. I think how to lose less is the main motivation for me to enter here to learn, this is true.

FC:

I understand. I think the most important thing about anxiety is uncertainty, that is, you don’t know that there is no logic to support this thing.

Phyrex:

Yes, it’s okay when the market is rising. When it’s rising, you’re anxious because you don’t know when to sell. But when you’re losing, the anxiety is tragic, as you may face the situation of returning to zero at any time.

FC:

Since we are talking to traders, I would like to ask, what is your trading strategy? For example, your capital size, expected return, acceptable risk drawdown, and what is your cycle?

Phyrex:

What I have invested more in are U.S. Treasuries and Crypto. Basically, I expect Crypto to double in every cycle.

FC: So conservative?

Phyrex:

Yes, because it is so difficult. I feel I would be very happy if I could double it.

FC:

I understand that you basically choose large currencies and rarely do short-term trading?

Phyrex:

Yes. I rarely trade after buying, including the mines I mined on Binance. I usually say that when the price is about the same, I may make a layout, but the yield has been bad recently, so I think it is meaningless to sell it, and the money is not much, so it is better to hold it. There may be opportunities if I hold it, so I basically hold it and trade less frequently. The only time I frequently trade is when the earnings season comes. Before the earnings season, I usually buy Coinbase and MSPR. After the earnings season, I will sell it according to the situation. This is what I may do in the short term, and I will basically share it with everyone on Twitter.

FC:

OK. Lets take the topic that everyone is more concerned about today. Based on the data that your trading system pays attention to, do you think now is the time to buy at the bottom?

Phyrex:

To be honest, many of you may not like to hear that there is really no way to determine whether this bottom is the bottom. Because the current rise and fall are all the effects of emotions under the low liquidity tide, there is a high probability that the wide fluctuations will continue in July, August, and September. But if a black swan event occurs, it is definitely not the bottom. If the US economy is in recession, then at this price, it is definitely not the bottom, and there will definitely be a larger gold pit. I have explained more detailed analysis in two articles on Twitter called The Last Drop.

But it is precisely because of the unpredictability of the black swan, it is unpredictable whether it will happen and when it will happen, so it may not happen in 2024. If it does not happen, then it is very likely that more than 50,000 US dollars is a bottom. So I suggest all my friends, if you don’t know what the bottom is, and you are willing to buy the bottom, then start a split position at the price you set. Every time you drop a certain amount, you can make up a position that you can afford. My current strategy is that if it falls below $56,000, I will add 1% of ETH of the 30% position for every $1,000 drop, and if it falls below $50,000, I will add 2% of ETH of the 30% position for every $1,000 drop, and if it falls below $40,000, I will add 3% of the 30% position, and so on. The only reason to buy the bottom of ETH is the spot ETF, and the bet that the increase will exceed BTC.

FC:

I understand. Actually, those who should do secondary trading should know that there is no 100% certainty. It is more about what we should do if it happens. So I would like to ask, can you give me two key indicators now? For example, what should I look at in the macro level? If it has changed, it is more likely that it is not the bottom now? If it has changed, it may be the bottom now?

Phyrex:

If the accuracy is relatively high, it is what I said before, whether there will be an economic recession. Although economic recession is unpredictable, there are data to show it. The first data is that the GDP of the US economy has been declining for two consecutive quarters. This is also what most countries look at, but the US does not mainly look at it. The second is the unemployment rate. Generally speaking, when we look at it, it is a retracement. When the US economy is in crisis or recession, its unemployment rate will basically be above 5.2% or 5.4%. If this happens, it is very likely that the current bottom is not. Including we can see that in some of the last meetings, Powell also explained that they will pay more attention to the unemployment rate in their economy. Now the Federal Reserve rarely looks at inflation data, because inflation data is indeed going well, so it will look more at employment data. Powell has already talked about employment data. When the unemployment rate exceeds 4%, the Federal Reserve will be better balanced and will consider whether to cut interest rates in advance. Because from the perspective of the Federal Reserve, if the unemployment rate continues to rise from the threshold of 4% to more than 4.4%, their expectation for the unemployment rate in 2024 is 4.2 ~ 4.4. If it exceeds 4.4, it means that the economy has begun to get out of control and the economy will gradually shift towards recession. When the unemployment rate gets higher and higher, the probability of triggering an economic recession will increase, and the possibility of triggering a black swan will increase. So for many friends, I think the most intuitive data to look at is the unemployment rate. If you find that the unemployment rate is getting higher and higher, although it will be in line with the Federal Reserves interest rate cuts, it may bring a certain boost to the market, but from a longer period of time, this may eventually evolve into an economic recession.

FC:

I understand, but there is also a saying that the Fed is now more focused on expectation management. When the unemployment rate starts to rise, will it be possible that the Fed will cut interest rates ahead of market expectations? This may be more in line with what you said about it being preventive.

Phyrex:

I said earlier that if the Fed allows the unemployment rate to be at 4.4% and does not trigger an economic recession at 4.4%, then the Feds early rate cut can be seen as defensive, which is beneficial to the risk market during this period. Because we must know that the rate cut itself will not provide liquidity, but the rate cut itself means that the Feds monetary policy for this cycle has ended, so it is a good market expectation for users, which is a good thing in itself and will stimulate users trading sentiment.

FC:

I just saw someone leave a message asking if it is better to buy long-term government bonds if the economy is in recession and interest rates are falling?

Phyrex:

Yes, didnt I say earlier that I have already started to allocate some of my own funds in US bonds? Then why didnt I allocate long-term US bonds? Because its too late to allocate now. You can see that the yield of more than one year has basically fallen below 5%, with a yield of only 4.5%. I think its not worthwhile to allocate now. What is my personal idea? At present, I buy one-month bonds, which are one-month or two-month bonds with a yield of 5.5%, such as 5.1%, 5.2%, 5.3%, and 5.4%. Then my first game point is September. If there is an expectation of a rate cut in September, I will buy long-term US bonds before September, before the expectation, for example, buy two years or twenty years. I have been holding the two-year US bonds because I generally expect two to three years to be a cycle. Then for twenty years, I am ready to do the secondary market.

FC:

Are we already in the second half of the bull market?

Phyrex:

This cycle is likely to be a double-top or triple-top prediction: If there is no recession before the US election, then this may be a double-top structure, and the second top may be when the money is released, which may be in 2025 or 2026, which is the second top of this cycle. The triple-top situation is that if the US economy declines before the US election, then the first top is likely to be the approval of spot ETFs, the second top is the US election, and the third top is the money release. These three top cycles or double-top cycles correspond to the positions that I expect to reach highs and lows in the industry. The first position is ETFs and or the US election. My views are all around the cycle. The US election may be the best stage for stimulating the entire risk market since 2024. This cycle is the first two months and the last two months. Looking down, we have to look at a problem in the US economy. If the US economy still does not experience any recession during this period, the Federal Reserve will be willing to continue to cut interest rates continuously, the US economy is in a balance, and the unemployment rate is still at a low level. At this time, it is a good thing for the entire risk market. If the next batch of funds is really released, and the release cycle is consistent with 2026, then the next rising cycle may be in the middle and late part of the year 2026, which may be a better opportunity.

FC:

I would like to ask about the election. Is there any reason for the rise in risk markets? Or is it a market sentiment?

Phyrex:

There are both. We look at the previous FIT 21 (banks can carry out cryptocurrency custody), Ethereum through spot ETF, and it has been said that the SEC has been under political pressure, and we can see that the Republican Party has issued many measures that are very friendly to cryptocurrencies, including the Democratic Party and even Biden, who have asked to be more friendly to Crypto. Even if these do not stimulate liquidity, these so-called benefits, even if it is said some time ago that if the Republican Party is successfully elected this time, then the foundations behind the United States will promote Solana like pushing BTC and ETH, and that will be another large amount of funds. This expectation will bring about a rollover of the entire cryptocurrency market and the funds on the market. Because we know that the funds on the market are now enough to push BTC to more than 60,000 or 70,000, but the reason why it has not reached that level is that the sentiment of the entire market is not good enough, and the funds on the market are unwilling to come down to buy. If Trump, as president, shouts a few more words at this time, especially once he said that he hopes Crypto will happen in the United States, and hopes that the United States will drive the development of the entire Crypto world and make the United States the center of cryptocurrency, what kind of sentiment will this slogan represent if it is shouted by the current president? It may not necessarily bring in funds directly, but it will make the on-site funds even more crazy, and the madness of the on-site funds will also drive a large amount of off-site funds.

He will say that we need to defeat the SEC and Gary Gensler, and that we need more new money to enter Crypto, so that the United States can dominate the Crypto field, lead the entire world into a new era of Crypto, and let the dollar hegemony reach a new peak in Crypto. Do you think this is exciting? Is it exciting? Wall Street will definitely smell it. At least in the next four years of the presidents term, even if he is not the main person to promote this matter, his words will definitely represent Wall Street and the entire capital chain. In this case, do you think everyone will feel FOMO? They will definitely. So this is why we can see with our naked eyes that as long as the Republicans are elected in the US election, it will definitely bring a benefit to the entire Crypto market. Even if this benefit is virtual, the moment of being elected will give everyone a good expectation.

FC:

I see. I just heard you say that the third peak might be in 2026. If it really happens in 2026, it would break the cyclical theory of halving to some extent. So do you think the next halving will have little impact on the entire cycle?

Phyrex:

No, I think the halving cycle has a huge impact. Data people like to backtest history. When we backtest history, we can see that every time BTC is halved, the peak of Crypto growth is half a year to a year later. We can see that the period of half a year to a year basically covers the cycle of the US election. The peak of each half-year and one-year rise is either in the pre-swing period of the US election or in the post-swing period of the US election. So from my point of view, it is a mutual achievement. Half a year after the halving, a lot of funds have been driven. Everyone has become accustomed to this position, and miners have reduced their selling. Another thing is that the US election stimulated the risk market, but whether it stimulated the circulation of funds or there were more other market conditions to stimulate, it led to an increase in the buying sentiment of the entire risk market, and then increased the price of the entire cryptocurrency market. So I think at least for now, I still believe that the halving may bring a sudden market surge to the crypto market, and this sudden market surge is likely to overlap with the US election.

In laymans terms, if the US election raises BTC to more than $100,000, then when we do the next halving, we will look back and see if it is still half a year to a year after the halving cycle, which will bring an increase in BTC, and it will still be a halving market. So I think there is still a good overlap between the halving market and the US election, which means that the halving market is included.

FC:

I understand. Just now you mentioned ETF. There is an article saying that Ethereum is going to return to below 3000. You also tweeted about this. Have you made any changes recently? If SOL ETF is launched, do you think its trend will be the same as BTC?

Phyrex: Many friends are also asking these questions. The first question is that the Ethereum ETF will be approved soon. There is basically no suspense. It is just a matter of time. Will there be a selling pressure on the market after it is approved? What I say may not be correct. It only represents my own opinion. I don’t recommend that you configure it according to what I say, but if you have to configure it, don’t ask me to defend your rights if you suffer losses. This should be said in advance.

We have seen a complete cycle before, the cycle of BTC spot ETF. We have seen that when funds are sold, it appears Sell The News. From 46,000 US dollars, it rose to more than 48,000, and then there was a Sell The News drop, and it even fell below 40,000 US dollars at one point, to 38,000, 39,000, and then began to rise. This process clearly shows that there is a Sell The News, so will ETH also appear (this situation)? I think everyones idea is not wrong. But why do I disagree with this view? If you are a BTC Holder, then you sell it when Sell The News, do you think you are losing or making money? When we look back at the entire cycle, we will find that if you do not buy it again after Sell The News is sold, you will lose a lot. Although you may have started buying at 28,000 or 30,000, that is, when the rumors started, and then sold when the news came out, in fact, the amount you made would be very small, because now from a Gods perspective, we can see that after the 38,000 and 39,000 fell, it rose to 69,000, 70,000, and 73,000, basically without a correction period, and it rose directly to such a high. In fact, if you sold at more than 40,000, you would have lost money if you didnt get on the train. If you didnt sell when Sell The News, you would have definitely made money. Even now, it is still 57,000, which is higher than when you sold The News. It is 10,000 US dollars higher than when you sold it at 48,000 or 49,000. So lets talk about it directly, even if you didnt Sell The News until now, you still made money.

So for many friends who missed out on BTC, when the Ethereum ETF was launched, would you sell the news? I believe that even if someone sells the news, he will buy the dip and buy it back when he thinks it is relatively low. Because when more funds come in, it will definitely show an upward trend. We look at some analysts from Bloomberg. They are all analyzing that it is very likely that the amount of funds entering Ethereum is 15% of BTC, or even around 15% to 20%. I personally think that it can be around 20%. At that time, the net inflow of BTC exceeded 10 billion US dollars within three months. 20% of 10 billion is 2 billion US dollars. So what stage can 2 billion US dollars bring Ethereum to? I dare not say how high it will be, but it is definitely higher than now. This is why I said that when BTC continues to fall, I will buy Ethereum at the bottom every time it falls by 1,000, and I will not sell The News, because I think I may not be able to choose a good opportunity to get on board. Suppose the ETF is officially approved on July 8 and listed on July 9, and Ethereum is pushed to $4,000 in the short term, and then you start selling at $4,000, but in the next three months, 1 billion US dollars will come in, and it may go to a higher point. Then you can do whichever you think is worthwhile. If it rises to 4,800, 4,900, or 5,000, will you regret selling it too early? Because after all, we have seen this situation when it came to BTC. When you sold it at 4,500, 4,600, 4,700, or 4,800, it fell below 4,000, but you will find out how much it rose next? 70% to 80%.

In fact, we have seen the entire BTC process. The data clearly tells us that more than 90% of those who bought spot ETFs from the beginning have not bought them yet. So, would you rather be the 90% who did not sell or the 10% who sold? The choice is in the hands of all the friends.

FC:

I understand. This is a very interesting paragraph. I would like to ask, do you think the high point of Bitcoin and the high point of Ethereum will be the same? Or will they be in the same range? If so, can I use the same macro indicators to decide when to sell my Ethereum?

Phyrex:

It is not the same, why? Assuming that there is no BTC spot ETF this time, would we still expect BTC to rise to 73,000 under the current situation, or still fluctuate around 60,000? Do we expect it? We may not expect it. From my personal data model, if there is no BTC spot ETF, the price of BTC is likely to be around 30,000, and may not even reach 40,000. What is the reason for (the current price)? It is the spot ETF. We know that investors themselves are a kind of FOMO emotion, especially when the price rises, the more crazy it is, that is, buy high and not buy low. This is not only the case for Asian friends, but also for American friends. So when it appears a FOMO period, for example, BTC, we see that the highest period of FOMO is the first 5 months, and it is a FOMO period until June. After 6 months, its FOMO emotion may begin to decline.

Now lets look at the situation of Ethereum. Assuming it also has a correction period, like BTC had a two-week correction period at the time, then assuming that Ethereum also enters a two-week correction period, it will be in an upward volatile period from the first month to the fourth or fifth month. As of now, the four to five months from July is exactly the US election. It is both a crazy period for ETFs to rise and a stimulus period for the market due to the US election. I think it is a double superposition, and its possible explosive power will be higher than the explosive power of BTC alone with only one ETF.

FC:

Understand. Can you share with us, for example, if I am interested in ETFs, which bloggers should I follow? If I want to know when Ethereum will be sold, what data should I look at?

Phyrex:

As for bloggers, I would recommend these two from Bloomberg, Eric (Twitter@EricBalchunas) and James (Twitter@JSeyff). These two people started with only 10,000 or 20,000 followers, and now have more than 100,000 followers. Most of the followers are from ETFs, especially Eric. Eric is, at least as far as I know, the first one to predict that the ETF may have a higher approval rate, and he gave a time. He also gave a high probability of passing 19 B-4 first, and then S 1 and S 3. I personally think his accuracy is basically above 90%. If you want to get better information in this area, follow Eric.

Regarding the data of selling points, after the first rate cut, there is a high probability that there will be a second rate cut in November and December, which is good for the market. As long as the rate cut cycle is entered before the economic recession, the market will predict that the Federal Reserve will enter a defensive rate cut, which is a good thing for the market. This is the first data. The second data is the unemployment rate. The unemployment rate can be high, but not too high. The unemployment rate is now 4. It is relatively safe to reach 4.2, 4.4, and 4.6. Once the unemployment rate exceeds 5%, it is likely to give us a danger signal. At this time, some of our friends can consider whether to prepare to leave the market, but it is just a consideration. We also need to judge more macro and micro data. For example, it was still at the peak of ETF FOMO at that time, so it was still good for you to hold BTC or ETH at this time. For example, at this time we found that Solanas ETF has begun to speculate expectations, so it would be a good thing for you to hold some Solana at this time. Basically, for the big cycle, we still look at these.

Let me add that we all said it was macro data before. In fact, there are also many guides for escaping the top and bottom in the on-chain data. For example, for bottom fishing, I shared a long-term holding NUPL in 2022. This value is the most accurate range for bottom fishing. When it reaches the red area, it is 100% bottom fishing. Historically speaking, it has never failed. But it is suitable for bottom fishing in this big cycle. When escaping the top, we also have a data to look at long-term holders, that is, long-term holders who have held positions for more than one year. This is also the data that Murphy and some other friends like to share. This data has never been wrong from a historical cycle. When the long-term holding of BTC reaches the bottom, it basically corresponds to a relatively high point of BTC. When long-term holders begin to decline at the top, it is basically the best cycle for bottom fishing.

Another data is the market value of stablecoins. The market value of stablecoins is divided into two, one is USDT and the other is USDC. I used to look at USDT more, but now I look at USDC more. As we all know, USDT is an index for buying and selling cryptocurrencies. When its market value increases, it is likely that there is more money in the market. However, Tethers CEO only uses 60% of USDT in cryptocurrencies, which means that 40% to 50% of stablecoins, USDT, are no longer used in the cryptocurrency market. This was said two years ago. Now, this ratio is likely to be reversed, that is, more than 60% are no longer used in cryptocurrencies. Therefore, the increase in the market value of USDT may not reflect the buying and selling sentiment of the entire market, so I suggest that you look at USDC more. On the one hand, it is because the leaders of this cycle are American investors. There is no doubt about this. You can go to the K-line in Trading View. The most popular Crypto among American investors, including BTC and ETH, has a peak trading volume from 3 a.m. to around 5 a.m. every day. At the same time, we can see that as long as it is a non-US holiday, its trading volume is relatively the highest. USDC is the most compliant one for American investors, especially now that circle, the issuer of USDC, has also obtained a compliant license for issuing stablecoins in Europe, so USDC will serve more major markets such as the United States and Europe. Then the change in the market value of USDC is a better way to judge the sentiment of American and European investors towards the cryptocurrency market. If the market value of USDC is in a state of continuous increase, it means that more investors have converted US dollars or euros into USDC and entered the market, entering a buying and selling mood. When you find that the market value of USDC has a continuous decline, it is very likely that a large number of investors have exchanged cryptocurrencies for stablecoins, and then the stablecoins have withdrawn from the market as legal currency, completing a cycle of buying and selling. When a large amount of USDC market value is issued, you can see a large number of such investors buying USDC through their legal currency to enter the market to buy cryptocurrencies. This is my personal judgment.

FC:

I understand. I just had a chat with Murphy today. These data actually have a core logic. They have a trend, so they can determine the range of the top or bottom range. In general, what cycle do you think the trend is formed based on? Weeks or?

Phyrex:

There are several trends here, we talk about big cycles and small cycles. The big cycle is the monetary policy of the Federal Reserve, such as interest rate hikes and rate cuts. Now from a Gods perspective, the end of 2021 is the end of the previous cycle. It ended the monetary easing policy and entered the interest rate hike cycle. The market believes that it may have monetary tightening, and everyone starts to run, so it starts to fall until the entire water release cycle is completed. This is a big cycle. In the small cycle, we have to judge whether it is in the early stage of interest rate hikes, in the middle of interest rate hikes, or at the end of interest rate hikes, and whether it has entered a pause in interest rate hikes, or entered the end of a pause in interest rate hikes, or it has entered a rate cut. We can see that the early stage of interest rate hikes is often a destructive blow to the entire risk market, whether it is in cryptocurrencies or US stocks, which are basically falling. On the contrary, at the end of the interest rate hike, because it has anticipated the end of the interest rate hike, the entire risk market has seen an increase. Entering the cycle of suspending interest rate hikes From a general perspective, the recent 4 to 5 interest rate hike cycles are all beneficial to the risk market. So if we judge the small cycle, we start selling when the interest rate hike just begins. When the interest rate hike reaches the bottom and everyone has begun to predict that the interest rate hike will be suspended, you start buying, because when the interest rate hike is suspended, the market will usually rise. When it comes to the interest rate cut cycle, if there is no economic recession in the early stage of the interest rate cut, you can still hold your position. If the interest rate cut catches up with the economic recession, then it is a better situation for you to sell. It is a good cycle for you to start buying until the interest rate reaches zero. You can keep buying when the water release starts, and you can start preparing to sell when the water release ends. This is a cycle. You may not be able to reach the top, but you can definitely get 70% of the entire rising cycle, and the risk is very low.

Another cycle I mentioned is that the more it falls before the midterm election, the more you should buy it, and the better it may rise after the midterm election. Our investment is about probability, that is, the harder it falls before the midterm election, the higher it will rise after the US midterm election. From a historical perspective, only one of the 15 times failed, and 14 were successful. There is at least a 40% to 50% difference, which is the profit space. It is the same during the US election. The harder it falls, the better the election and election cycle will rise. This is after 15 times in history, and only one or two times failed during the 15 times. So this is a change between the big cycle, the small cycle, and the small cycle. Through monetary policy and several key nodes, you can judge the big trend and the small trend.

FC:

I see. I would like to follow up with a question. You are mainly focusing on fixed investment now. When will your fixed investment end?

Phyrex:

Yes, I have two fixed investments. The first one I want to test is whether an ordinary investor can outperform the market even when Bitcoin exceeds $60,000 to $70,000. This is also what I have been saying about the fixed investment funds left for my son (Chipmunk). It is about 3,000 RMB per month to buy BTC and ETH. I just want to see what will happen to your income as an ordinary person if you take out 3,000 RMB per month and invest for more than two cycles? This is something I do as a social experiment. I will buy on the 10th and 11th of each month regardless of the price.

Another one is what I said before. As long as the price of BTC falls below my set point, the more it falls, the more I buy. The point where I end is when it exceeds my fixed investment line, then I will not buy. For example, if it is 56,000, I will buy 1% of the position, and if it is 55,000, I will buy another 1%. After it falls below 50,000, I will change the position from one point to two points, that is, when it is 49,000, I will buy 2% of the position, and at 48,000, I will buy another 2% of the position, but if it rises back to 51,000, I will not buy, and if it rises back to 52,000, I will not buy, and if it falls back to 47,000, I will continue to buy. Then when it falls below 40,000 to more than 30,000, I will start to add three points of position, and I will add three points of position for every 1,000 drop. Of course, I believe it will not fall so much, but this is a rule I set for myself. I won’t invest if the price goes up, but I will continue to buy if the price goes down. So these are my two operations for fixed investment. One is to do a fixed investment position for social experiments, and I will buy on the 10th of every month. The other is that the more the price goes down, the more I will buy.

FC:

Lets pause for a moment and talk about your role as a KOL. In fact, I have talked to many traders about the issue of communication path. I want to ask, in terms of the trading ecosystem, what are the upstream and downstream links of the entire secondary market? And when a project rises from the beginning to 10 times, in which link of the communication path does the KOL play in the whole process?

Phyrex:

From my personal experience, the current trend of KOL has gradually moved from the pure secondary market to the primary market. Many friends in the West have begun to discuss the issue of KOL rounds, which reflects that the entire primary market is paying more and more attention to the voice of market communication. In the past, we know that for the Chinese market, your communication channel is basically in this group. Whether you are a TG group, a WeChat group, or a community group on Weibo, it is all led by the so-called group owner or administrator. The project party is very low in the way to convey the voice to more users. So we can also see that before the last cycle, many leaders were community leaders, administrators, etc. Their requirements for this market are very simple. Whether they can make money is the most important. As long as I can make money, I can shout orders. Shouting orders is more about letting people in my community come in. On the one hand, the amount of funds he can shout orders may be limited, on the other hand, his radiation range is limited, and the third is that he is actually irresponsible for the users he undertakes. His identity is more about the carrying surface of funds, and he will not promote whether the project is good or not.

What will be spread more now? Spread the reason why I bought this token? Why do I think a track is good? For example, I will also share why I am optimistic about DePin and RWA tracks? Why do I think ETF will bring a lot of funds? Now many so-called KOLs have changed from simply shouting orders and leading orders to contributors to the community. For the project parties, they will use a more fair way to evaluate the project. Is your track good? What kind of solution can you bring to the entire track? For many project parties, they know that the value of KOL is long-term and gradual. They are not people who will run away after making a profit. But there are thresholds to achieve these. They have a very rigorous logic for the (content) output of a project.

Now more and more investors like to read such articles and like to ask why. As investment becomes more rational, we will ask more and more why buying this can make money? I don’t deny that there are many friends who want points directly, want to go long or short, but no one can always give you the correct points 100%. When you put your position, you will find that you want to grow. Especially when you lose money, you want to grow. That is, based on your own understanding, you can be responsible for yourself, you can pay for your own cognition, and you can live in this market for a long time. After you grow, you will know that the Federal Reserve has called for an interest rate hike, and I want to run at this time. The Federal Reserve is releasing water, and I want to buy at this time.

I think that after the great waves, the KOLs who can stay will be those who can truly contribute practical knowledge, and let more friends know about the big cycle, the carrying capacity of funds, what is a safe investment, and what can make you live longer. In the eyes of the project side, these people are also truly valuable people, because for the project side, blindly shouting orders will also be a kind of damage, because once the market crashes, you will be a dog dealer. In summary, what we should care about is the collection of personal knowledge, rather than relying on just one point.

FC:

I understand. Actually, from the perspective of an individual trader, if there is a project in front of me, my real action should be to learn, not to buy immediately. I am still curious, if a project party actually finds you, he must have found many KOLs. I don’t know at which level of the communication chain the KOL is at this time. Is the next level directly facing retail investors? At this level, do everyone start PVP?

Phyrex:

To be honest, all KOLs must face the last (retail investors), this is 100%. The ultimate purpose of a project looking for KOLs, whether it is to spread the value of the project or something else, must be to reach retail investors. Including me, do you think that all the articles I publish are read by institutions, VCs, and exchanges? Definitely not, the vast majority of people are ordinary users like you and me, these people are actually the last layer of the chain, this is an undoubted thing.

FC:

Understood, so what should we do?

Phyrex:

Let me talk about myself first. I also make a living, as everyone knows. At the same time, I should be the first person in Chinese Twitter to run a sponsor advertisement. Many pure analysts do not take orders and have no community. They do not make money by analyzing. What do you think is the motivation for them to maintain their motivation? Some people say that as an analyst, isn’t it enough for you to make money by trading? Why write advertisements? In fact, for many of us, trading can indeed make money, and many excellent traders do not share on Twitter. They have no obligation to do so. They just make their own money. So why are many people willing to share? He is maintaining his own fun, and this fun is shared by many friends, but it does not mean that he is willing to share unconditionally. At this time, if there are some sponsorships or some advertisements, he will think that my efforts will have results, which is different from whether I make money from trading. In addition, some people do not trade frequently, and they will also have drawdowns. They also trade in large cycles. At the same time, they may also be ordinary office workers. So it is very normal for them to hope to make up for some daily income.

But as a KOL, you still have to set a lower limit and a threshold for yourself. If a KOL does not usually talk about certain topics, but suddenly you talk about them, it may be an advertisement, but it does not mean that all advertisements are bad. My requirement for myself is that when I do advertising, I never accept those involving token prices, but like Launchpool/Launchpad, I am willing to predict prices, and everyone knows that this is a kind of fun. I am here to talk about the rate of return, which does not mean that I ask everyone to buy at a certain price, so I will not accept any requests that ask me to call out the price, and I will not accept any requests that ask me to encourage everyone to buy. If it is to popularize a certain track or the fundamentals of a certain project, then I can do it. I have no psychological pressure on me. Or if a certain project is doing IDO in DAO Maker, I can do it too. Why? Because it is 100% refundable. If you think it is not good and the price drops, you can immediately get a 100% refund. This is not stressful for me either.

As you all know, I have been on Twitter for a long time. Many of my friends know my identity, including what I look like, my name, and even where my home is. I am a very transparent person in front of the public. I set a threshold for myself to do evil because if any of you find that I have done evil, you can easily find me to defend your rights. In order not to avoid this situation and to avoid causing trouble to my family, I cannot do evil.

I have always believed that it is not shameful to earn a living. As long as I do not cross the bottom line, I do not make money by cutting leeks, and I do not rely on the funds invested by my friends as the source of my living, then I think I am OK. So for everyones judgment, if you think he just wants you to buy this thing, instead of analyzing this track with you, and making you feel that there may be such risks, then he may be a pure advertisement. If he just introduces the track and may supplement your knowledge, then even if it may be an advertisement, I think you should not be too harsh on him, at least I think so.

FC:

I understand. The next question is that we generally believe that trading is related to personality. I think from talking to you, I found that you are a giving person and are more sensitive to relationships. So I think you have a certain correlation between price and certain factors. Maybe because of your personality, you care more about this. So if someone wants to copy your trading strategy, I think he may need a personality similar to yours to be more sensitive to many things, right? I even saw that when you observed Powells speech, his state, tone or tendency were actually judged from it. I understand that this is related to personality, right?

Phyrex:

Yes, actually because I studied clinical psychology, I am more sensitive and can see that when he is nervous, I am wondering whether he is expressing his true mental state or he is just demonstrating it.

FC:

The last two questions, you just mentioned the bottom line, lets go back to trading, what is your own stop doing list? For example, I usually dont do right-side trading, I will forget it if the price goes up, because I am too prone to FOMO.

Phyrex:

I will never buy something I don’t understand, such as MEME. I will miss out on 99.99% of the time. I buy things because my friends push me to buy them, maybe PEOPLE and two or three others. My friends keep pushing me to buy, and they urge me to buy every day, so I might buy a little. Other than that, I will never buy something I don’t understand, including Inscription. I only bought one or two that were pushed to buy, and I bought a little bit of ORDI, which I still hold. I may be a bit old-fashioned, but I won’t buy anything I don’t understand.

FC:

What is the reason for buying? What reason did he ask you to buy?

Phyrex:

There are various reasons. For example, PEOPLE was auctioning the US Charter. He felt that there would be FOMO and forced me to buy it. Sometimes, a friend who is very close to me told me that he got some passwords and told me to buy it quickly. I might buy it. Apart from this, I basically don’t buy it. For this kind of friends who force me to buy, I don’t care about the logic. Basically, if a friend who is relatively close to me tells me to buy, I will basically buy it. But if I am forced to buy it, I will basically lose money.

FC:

I understand. He usually pressures you to buy, but not necessarily to sell. OK, our last question, can you recommend a book, or a persons tweet or articles that have helped you the most at this stage, so that everyone can improve.

Phyrex:

I always say that I am a layman and rarely read books, but I like to read Twitter very much. I have a list of small bells on Twitter. There are about 40 people in this list. I may not read a post from a certain person, but I will spend at least 3 to 4 hours a day on the list of these 40 people. I will read all the posts they send in 24 hours. This includes macro and micro information, some trading strategies, and some overall market conditions. I will read all these things. So my personal suggestion is that whether it is for the cryptocurrency industry or the economic industry, if you think that analysts or journalists will be helpful to you, you should add them to your small bell. You may not visit one person every day. When your list is larger, you will see, for example, 40 to 50 pieces of information every day, 70 to 80 pieces of information. Their information is likely to help you popularize your knowledge as a whole, and it may not be an impact on a certain person or a certain article. I now have a list of about 40 to 50 people.

This article is sourced from the internet: Dialogue with the famous KOL Phyrex: When to escape the peak? Macro analysis gives you the answer

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