Article author: VNTGPRN Article compilation: Block unicorn

"Are we in a bear market now?" Overall, I think so. Each altcoin fell 40% or more (with a few exceptions). As of this writing, Bitcoin has fallen 23%, its previous local lows have fallen 30%, and the current situation doesn’t look optimistic. This time, every new altcoin or callback that makes millionaires is far less than a 50% callback in three years than it seems. I'll talk more about stagflation later because I think it's the worst case for a broader economy.

Extremely cruel price trends over the past seven years.

continuous decline in the past two years.

I would say that this decline is largely predictable and may not be obvious for crypto-natives who spend 90% of the time trading unpopular instruments with low liquidity requirements, but for those who focus on U.S. trade (tariffs), U.S. (DOGE, mass deportation), and valuations of big tech companies, they have been quietly exiting the risk since November last year. I think this is the initial correction because these large pools of funds are exiting the market. This has turned the market to a defensive trend, causing people to hedge their positions even if there is a slight downside risk. With the adoption of traditional finance for various Bitcoin financial products (CME futures, Ibit options, etc.), there are many liquidities that can be used to buy and sell various hedging tools.

In my opinion, I can see a scenario unfolding that is absolutely devastating for cryptic natives chasing the green K-line. Everyone knows how bad the Bitcoin bear market is. So far, the 75% drop has been normalized, which is one of the reasons why people are even reluctant to participate. Although it performs well by risk-adjusted returns, it is too volatile for many. However, there are now liquid markets that can hedge against this volatility and downside risks. Enter IBIT options. Painful delta neutral. Volatility near the option expiration date has increased, and everyone except those who sell put options at high premiums have lost money. This cycle continues until the seller overwhelms any passive buying, or more marginal sellers enter the market by giving up their positions.

Of course, this assumes a lot of things. As I said, this is not my basic scenario, but it is certainly something to be aware of. Furthermore, if the premium of put options is extremely high, it may indicate that people are afraid of market declines, and if sellers overwhelm market makers’ high inflation and low growth is once again the worst-case scenario for the overall economy, it will definitely be disastrous for the financial market. The only possible thing I can see that during stagflation is gold, even so, will you be confident to chase highs? At present, there are early signs that stagflation is brewing. But extreme pricing efficiency such as 80% pullbacks during retesting is not a big deal because people have liquid options to hedge their exposure. Again, some catastrophic, cryptocurrency-specific situations must happen before we can reach that point. This is possible, but it is only open for five or five. Still, altcoins are easily called back again here by 50-60%. In this environment, who is the altcoin season, but why is this happening? There are hundreds of new altcoins systems that will fall 90% from their all-time highs. What I can see I don't even think the most optimistic headlines now can drive Bitcoin to continue to rise. Every rebound will be sold out. Before the liquidity environment becomes more easing for risky assets, before trade is more certain, and before economic data show moderate growth and slowing inflation, your main goal should be to secure capital.

I will declare again that my view in the medium term is that neutral is slightly bearish. My basic assumption is that we will not hit the highest point in history until economic and geopolitical uncertainties are largely resolved. However, you are not making money from predictions to earn and retaining financial markets. You earn and retain funds by preparing for each scenario and adjusting your position based on these events. From a trading perspective, if you plan to go long, remember to lock in profits every time you rebound. Now is a great market for traders and you can still make profits from this market as long as you have patience and discipline. Don’t chase the rise, and don’t be greedy. If you want to short, be careful. Bitcoin has fallen by nearly 30%, and altcoins have fallen by more than 50%.

I will be the first to tell you that staying optimistic will make you earn more. There is greater room for growth in the financial market. However, now is one of the moments when you should be ready for further downside. There are more things that can go wrong here, and while many things have been going well, the price still hasn't responded favorably for any longer.