Alpha Digital

Something most might miss is that $OP actually looks really really good on a higher time frame.

We have seen a clean series of higher lows and higher highs pointing to a bright picture for the future.

So what altcoins will I be concentrating on?

As some of you have already noticed I am a big fan of $OP Optimism.

I firmly believe that $ETH is the underdog of this cycle and will perform better than most expect.

Subsequently, scaling solutions will be needed and sought after. $OP has a very good position with the Superchain being a potential killer application/protocol allowing multiple Layer 2s to seamlessly connect and interact with each other scaling the network horizontally.

Apart from that Layer 1 solutions like $SOL, $AVAX, $NEAR, $SUI, etc. also have a lot going for them and will most likely also perform very well.

Then there are the sectors that saw crazy rallies in the past but couldn't live up to the expectations but could see a revival under more lax regulation. These include DeFi (decentralized finance) and RWA (real-world assets) tokenization.

Protocols like $AAVE, $CRV, $MKR, $ONDO, ... come to mind here.

I expect the total crypto market to perform well into Q1 2025.

People are always the most bullish when prices top and if history repeats itself we will be presented with lots and lots of amazing narratives over the coming months.

Some of them will have some merit to them, and some of them will merely be smoke and mirrors.

Usually, assets perform best on hype and potential which we will see a lot of right before/after Trump is inaugurated.

Whatever he does, I do not expect the Trump admin to live up to the sky-high expectations - potentially marking the top for the sector.

Next, let us take a look at risk management.

Risk management is tricky.

This is true for traditional markets but even more so for cryptocurrencies.

If things go well one manages to risk-off before a move happens.

If the market already moved down 10-20-30% what do you do?

In the past, I found a very good balance between weathering rough conditions and minimizing risk if things look shaky.

What misled me over the past months was $BTC performing well while alts bled and lost a lot of value. Slowly grinding lower without giving any clear signals.

It was hard for me to adjust and I think the boiling frog analogy fits very well here.

I thought and still believe that altcoins are going to perform better than Bitcoin but getting the timing right is hard.

At the same time, I was and am constantly monitoring the markets adjusting the mixture of altcoins in the strategy for optimal results.

The last part is very important.

Allocation > Timing.

Getting sidelined during a bull run is bad. If you are right, nice you can make an extra 10% or 15% but if you miscalculate you miss out on 20% and buy the top just to exit at the bottom while messing up your mind clouding your judgement when future opportunities arise.

Crypto always has been volatile and will probably be like this for the foreseeable future.

During bull runs overthinking is your worst enemy and while managing risk regarding higher time frame market structure is important one shouldn't miss the forest for the trees and ride the market as long as it presents opportunities.

Let's start with a general market analysis.

Bitcoin spent much of the year in a 30% range before breaking out of it only one week ago. Since then $BTC has appreciated more than 20%.

The catalyst for this explosive growth can be attributed to Donald Trump winning the US election which will likely result in lax crypto regulation and probably even Bitcoin being part of the strategic reserve.

Bitcoin Dominance continues to rise which I expected to some extent but I thought altcoins would get more love than they received so far.

I expect the way from 80k to 100k to be the hardest for Bitcoin after that FOMO could kick in propelling the price higher quickly with high volatility.

Initially, my target for Bitcoin was 130k but the future Trump administration could get me to move the goal higher. I will re-evaluate this in the future but will most likely start slowly scaling out around this mark.

Until then a lot can happen, especially on alts.

I think $BTC is ripe for some consolidation before continuing higher. I do not expect any deep sell-offs for now and think that last night's liquidity hunt sending altcoins -10% and more is, for the time being, the lowest we will see.

The trend of Bitcoin is pretty clear and altcoins are also trending higher. Once Bitcoin has more boring price action I expect them to shine again.

My biggest mistake in this bull market was underestimating Bitcoin and overestimating altcoins.

During the last cycles, they already started outperforming and that's what my strategy is focused on.

I hope to outperform again soon.