Yi Lihua — founder of Liquid Capital — posted on the X platform that their target for ETH in this round is $7,000, while also assessing that the distribution of coins and midterm elections could be the catalyst for a new Bull market.
The post highlights liquidation and market sentiment, advises against leveraged contracts due to already high spot volatility, and compares the current scenario to the 2020 rally; while also giving a perspective on the human tendency to want to get rich quick.
- The ETH price target mentioned is $7,000.
- Cash handouts and midterm elections are XEM as potential drivers for markets.
- It is recommended to avoid leveraged contracts and prioritize observing the spot market due to high volatility.
Key message from the post
Direct: Liquid Capital founder believes liquidation and distribution programs, combined with the midterm election backdrop, could spark an ETH rally towards $7,000.
Analysis: This is a bullish view based on political and cash flow factors. The advice to avoid contracts reflects caution given the volatility and leverage risks in the cryptocurrency market.
Reasons and market scenarios
Direct: The main argument is that widespread money distribution can stimulate demand, similar to the dynamics of the 2020 rally, when multiple Capital forces acted in the same direction.
Analysis: If liquidation is indeed injected into the economy, money could find its way into riskier assets like cryptocurrencies. However, the outcome depends on the size of the distribution, policy response and investor sentiment.
Risks and recommendations for investors
Direct: It is recommended to avoid using leveraged contracts, prioritize spot market risk management and maintain position discipline.
Analysis: Contracts and Derivative increase liquidation risk during strong volatility. Investors should monitor cash flow, Short/ Longing positions and macro milestones before opening large positions.
Is the $7,000 ETH Target Certain?
Uncertain; it is an expected target based on cash flow assumptions and the political environment. Achievability depends on supply and demand, liquidation and macroeconomic risks.
Why is it advisable to avoid leveraged contracts?
Leveraged contracts increase the risk of liquidation during high volatility. If the market moves unexpectedly, losses can be large; spot markets have less leverage risk.
What indicators should be watched to evaluate this scenario?
Monitor stimulus inflows/distributions, Short/ Longing positions on exchanges, spot volume , and macro news related to monetary policy and elections.
How could midterm elections affect cryptocurrency prices?
Elections can have an impact through spending policies, investor sentiment and liquidation expectations. The actual impact depends on the size, timing and market reaction to the outcome.
