How long will this rally last? Which narrative will trigger the start of the bull market?

The U.S. February core PCE data will be released at 20:30 tonight. At present, market expectations are generally lower than the previous value, indicating that inflation continues to cool down and the power of interest rate hikes is gradually being felt. In short, tonight's PCE focus battle will turn into a positive result after the competition.

At 16:00 this afternoon, the delivery of options for Pancake and Auntie with a nominal value of 7.1 billion may also cause fluctuations. Today is also the closing of the weekly and monthly K-lines of the US stock market. It is a day of weekly and monthly resonance. It is either Nirvana rebirth or an eagle soaring into the sky!

In short, if there is a big drop today, it will be a good opportunity to increase your position. Pay attention to the opportunity to push down around 26880, and the extreme opportunity to go all in around 24300.

Reasonable explanation for this round of rise and how long will the trend last?

Reasons for the rise

1. The bull-bear cycle of cryptocurrency has experienced several black swan events in 2022 and ushered in a rebound in 2023.

2. The Federal Reserve’s targeted monetary easing program (BFPT) provides liquidity to the market in the short term.

3. Due to the banking crisis, investors can only avoid the risk of the dollar system crash by leaving the US dollar investment system, and flow to safe-haven assets such as gold and BTC.

4. Safe-haven funds flow to big banks, government bonds or money funds, precious metals, and BTC in turn. Only a small amount of funds flowing into BTC can boost the market. Gold and BTC both belong to the non-US dollar investment system.

5. The priority of dealing with inflation and interest rate hikes from the perspective of the Federal Reserve. The inflation problem has eased with the decline in oil prices, and only the last 1~2 interest rate hikes are left.

Appearance time (May)

1. Confidence in the US dollar system begins to recover, and the demand for safe havens dissipates. The crisis is not over yet (the price of gold is negatively correlated with the US dollar)

2. If the US stock market starts to rise again after the US dollar system stabilizes, it will actually grab funds from the BTC market, which is bearish when there is insufficient funds in the market.

Before the 3.5-month interest rate meeting, the market will speculate on the last rate hike, which will overdraw the expectation of future rises at one time and may even end the market.

4. Hong Kong's new policy was implemented in June, good news came, and speculative funds withdrew

5. The bull-bear pattern of the crypto cycle is very likely to usher in a correction in the second half of 23 years

6. After the short-term impact of the bank rescue plan BFPT, market funds continue to shrink, which will continue to affect the crypto market

So if the logical assumption that the current market is only one narrative away from a bull market holds true, what story will that be?

I just briefly record my views, which are not investment advice but my own thoughts:

1. Looking back, 2020 was mainly the summer of Defi, 2021 was dominated by NFT, and although 2022 was a bear market, the LSD sector began to be speculated because of ETH's transition to 2.0 and the expected Shanghai upgrade this year. As the Ethereum Shanghai upgrade approaches, the native token of the Liquid Staking Derivates (LSD) platform may see a sharp increase.

The Shanghai upgrade will allow Ethereum network validators to finally receive staked tokens and rewards, which is not possible now. This will increase confidence in the Ethereum blockchain and may serve as a catalyst for the LSD protocol.

As the latest development in the DeFi space, LSD offers a new way to spark interest in digital assets, especially Ethereum.

LSD circumvents the traditional Ethereum staking process by lowering staking requirements and enabling ETH holders to stake without locking up any tokens.

This preserves liquidity as it means staked tokens can be used in other Defi applications and makes ETH staking more attractive.

LSD includes: Lido DAO ($LDO), Frax Share ($FXS), Rocket Pool ($RPL), Anchor ($ANKR), ssv.network ($SSV), StakeWise ($) SWISE), Stader ($SD). )、Bifrost ($BNC)、StaFi ($FIS)

2. After the Shanghai upgrade this year, it is the Cancun upgrade, in which the focus is the EIP-4844 protocol, and the core is the story related to Rpllup Layer2. The market value is the first matic (the former concept of l2), and then the hot is arb op, and then zksync and starknet, which have not issued coins, and scroll? These projects will issue coins and go online one after another, which can extend the narrative timeline.

Two of the most anticipated airdrops this year are zkSync and Starknet, as they have the potential to be even bigger than Arbitrum.

zkSync and Starknet are Layer 2 solutions for scaling the Ethereum blockchain, making it faster and cheaper. They use zero-knowledge (ZK) rollups to group transactions and execute them off-chain.

Since they only keep the absolute minimum amount of transaction data on-chain, this reduces congestion and greatly improves the entire process.

As more and more dApps use Ethereum, effective solutions to its inherent scaling issues are absolutely necessary.

Tokens most likely to profit from ZK momentum: $IMX, $MINA, $LRC, $DYDX, $CELR, $SYS, $DUS

3. The ecosystem of the L2 sector is very rich. For example, Arb, which currently ranks first in TVL, has nearly 200 ecosystem projects. Therefore, derivatives under the L2 ecosystem, such as $GMX, which is mainly DeFi, and $Magic, which is a chain game, can continue to be hyped.

4. Considering the pace of Hong Kong's policy opening in June, the past two months are also a good time to speculate on Hong Kong concepts ($CFX has been launched again). However, unless the Hong Kong government allows Hong Kong dollar stablecoins to enter the crypto market, the Hong Kong sector is more suitable as a target for periodic speculation, and it is not enough to support the bull market.

5. To sum up, it seems that only the fierce competition in the L2 track is worthy of being blown up by capital into a bull market bubble. The bubble here is worthy of being called a bubble because it is integrated into the various ecosystems of L2 (it is also in line with the monster market of small copycat coins at the end of the bull market), and our source of wealth depends on the bubble.

The above crypto stories will not all unfold simultaneously. Some, like AI tokens, are already running but may see more positive momentum this year.

With the Ethereum upgrade approaching, LSD may be most affected in the coming weeks, and their native token is ready to gain power.

When trading cryptocurrencies, staying on top of the hottest trends allows you to invest in both coins that are showing strength and those that are showing weakness. As traders, we are always looking for an edge over the market. Following a strong crypto narrative will keep you ahead of the crowd and allow you to trade the right coins at the right time.