Many analysts and KOLs have different views on the current stage of the market. Jason Choi, co-founder of Tangent, recently expressed on X that the signals of the market peaking in 2021 have reappeared recently. These signs include:
– There is a reason for the market to remain bullish: There are credible reasons for the market to continue holding long positions.
– Large venture capital funds completing fundraising: Typically, the investors (LPs) of these funds are late-cycle participants, which means they often get involved when the market is approaching its peak.
– Scams targeting the mainstream market are starting to emerge: The recent phenomenon of celebrities launching their own coins is the best example.
– Prices remain stagnant: The market prices have been stagnant for three months without significant fluctuations.
– High Open Interest (OI) in futures contracts: Open Interest (OI) has been consistently at a high level recently.
– Stagnation in net inflows of stablecoins: The inflow of stablecoins has started to decrease, which may indicate a slowing down of new funds entering the market.
However, Jason Choi also acknowledged that these signals of the market peaking have some limitations. For example, although OI is at a high level, it does not show a clear bias towards bullish positions, the Alt season has not yet appeared, and relaxed regulatory policies are favorable to the market, among other factors. These are all considerations that investors need to take into account when making investment decisions.
On the other hand, regarding the phenomenon of multiple institutional investors expressing bullish arguments in the market, Jason Choi believes that fund managers generally tend to maintain a bullish attitude towards cryptocurrencies when facing market peaks. This is because the main task of fund managers is to manage and maintain the investment allocation of institutional investors (LPs) in cryptocurrencies, rather than their cash positions. This means that their primary focus is on cryptocurrency investments, not holding cash.
Furthermore, if fund managers choose to mitigate risks during market peaks (for example, selling before “obvious” catalysts like an ETH ETF appear), but end up making a wrong judgment, they may lose their jobs as a result. However, if they choose to continue holding risk positions, even if the market falls, no one will blame them because maintaining risk exposure during a generally bullish market is considered normal operation. In conclusion, Jason Choi summarized by saying that