The development prospects of Ethereum ecosystem

1. Is Ethereum’s decline mainly due to the challenges and diversions from other public chains? There has never been such a serious divergence between Ethereum and Bitcoin, right?

I think the reason why the price of Ethereum has fallen is mainly due to two reasons:

First, the Ethereum ecosystem has not seen any major innovation in applications during this round of development.

Second, other blockchains have diverted Ethereum's attention in terms of innovation or hot topics.

Regarding the first point, some readers may say that in this round of trend, Ethereum has seen re-staking and second-layer expansion. Isn’t this a major innovation?

In my opinion, these innovations are indeed innovations, but they are all innovations in infrastructure, not innovations in the application side. Innovations in infrastructure are aimed at a small user group, while innovations in the application side can radiate to a wide user group and trigger the rapid growth of the ecosystem.

In the last bull market, DeFi, NFT and blockchain games in the Ethereum ecosystem were very typical application-side innovations. NFT, in particular, attracted a large number of users to enter the Ethereum ecosystem in an almost barrier-free manner.

And this round of Ethereum is still too lacking, at least so far.

The most typical examples of other blockchains diverting attention from Ethereum are the rise of the Bitcoin ecosystem and the emergence of the Solana meme coin.

The growth of these blockchain ecosystems has created a huge wealth effect in the short term, diverting a large number of users and hotspots away from the Ethereum ecosystem.

But in the long run, I am not worried about these issues, because I firmly believe in the creativity and vitality of the Ethereum ecosystem, and I also firmly believe that the price of Ethereum will not remain sluggish for a long time.

2. What position is suitable for short positions now?

At this point, if you are short but still want to make some moves, I think it will be rather awkward, because you will feel like you are in the middle of nowhere.

My suggestions for this are:

Either continue to hold short positions, no matter what happens next, do not buy any coins, force yourself to calmly watch everything that happens next, and then reflect on what mistakes you made in this round and what operations you performed improperly.

If you don't want to be short, just buy Bitcoin and Ethereum. This is a safer and more controllable method. However, if you buy Bitcoin and Ethereum now, even if you wait until the bull market peaks, the returns will probably be very limited. Therefore, it will be very difficult to lock in profits as much as possible with such operations.

3. The Magic of 0.78 doubled some time ago but was not sold. Now it has dropped to 0.6 again. Should I buy it again? Also, is this a big drop before and after the halving?

So far, all the coins I have invested in (including Magic) have never been issued, and will not be issued now. I will still do as I have written many times in my articles, as long as their teams do not have major problems in the future, I will patiently wait for the bull market to come before cashing them out.

As for whether this big drop is the big drop before and after the halving, I guess what this reader wants to ask is, is this big drop the last big drop before and after the halving?

If this is the question the reader wants to ask, I can only say that I cannot predict such fluctuations, but I can definitely deal with them.

Why?

Because if I follow my approach, I will:

First determine whether the market has entered a bull market.

If we don't enter a bull market, then continue to follow the strategy we set in the bear market.

If we enter a bull market, we will follow the selling strategy I set during the bull market.

According to my standards, the current situation is that we are not in a bull market yet, so I will continue to follow the strategy I set in the bear market: since Bitcoin and Ethereum have already passed the fixed investment price, I will no longer make fixed investments. I will no longer buy other fixed investment coins. Then I will occasionally buy some of the remaining funds if I find something I like and think is valuable.

Therefore, as long as we have made arrangements for market fluctuations in our pre-set operations, then when these fluctuations come, we just need to proceed according to the set operations.