A clear hedging trade idea: go long on $ETH and short a basket of overvalued altcoins. Right now, $ETH is indeed the structural main character of this market trend, with ETF fund inflows, on-chain activity, and narrative heat all stronger than other sectors.
I’d like to add a few of my own observations:
1. Recently, the net inflow of $ETH ETFs has been positive for 19 consecutive days, totaling over $5.4 billion, while the growth rate of $BTC has slowed during the same period, indicating that funds are clearly leaning towards $ETH;
2. Altcoins lack a sustained narrative, mostly relying on event-driven short spikes, with $ZORA, $ENA, and $BONK being typical examples that can't drive the sector;
3. If this trend continues, $ETH is very likely to play the role of the target for institutional entry in this market cycle, while altcoins seem to be treated as chips for distribution.
Currently, I also lean towards a structurally bullish view on $ETH, and my strategy model has created a combination of long $ETH + short weak narrative altcoins, mainly to guard against altcoin crashes and to reduce volatility.
1) If the market continues to rally, $ETH is likely still the main character.
2) If the market weakens, $ETH at least has institutions as a backing.
3) Altcoins, on the other hand, are like a scripted game, performing one act at a time.
So I believe this idea is not about seeking thrills, but rather one of the most cost-effective operations under the current structure.
At present, the long and short divergence is serious, I opened a hedging trade, long ETH, short a package of copycats, the position is about 1:1, and I will exchange ideas with you.
My logic is that ETH is the engine of this round of rise that began at the end of June, and the main driving force is that institutions follow the micro-strategy and purchase ETH through currency stock financing, and the other is the stablecoin narrative, which is the relevant core infrastructure and settlement layer.
Referring to the previous process of buying BTC with micro-strategies and driving prices all the way up, in the end, most altcoins are far from outperforming BTC. This part of the funds used by currency stocks and institutions to buy ETH is also unlikely to spill over to other altcoins.
According to CMC, only 20 of the top 200 tokens have risen more than ETH in the past 30 days, including Bonk, Zora, CFX, and ENA, which are obviously driven by positive events.
In terms of copycat selection, follow the logic of previous shorting, give priority to those with high market capitalization, non-leader, weak move, and low presence, and disperse short selling, set stop losses, and prevent single targets from exploding.
If the market continues to be bullish in the second half of the year, I believe there is a high probability that it will still be driven by ETH, and if it goes bearish, I don't think the copycats can be alone, and ETH at least has the purchasing power of institutions. It will lead to the failure of this hedging idea, either the altcoin season is really coming, most of the altcoins continue to outperform ETH, or ETH fluctuates or leads the decline, while other altcoins do not fall much, according to the experience of the past few months, I think the possibility is small.
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