Sector Rotation Accelerates: Neocloud and Memory Stocks Lead Declines
On July 3, well-known analyst degentrading issued a market view stating that both crypto and traditional markets continue to face persistent selling pressure. In the Neocloud sector, IREN and CIFR are leading the decline, bearing the brunt of capital outflows. Meanwhile, memory stocks are also suffering: Micron Technology (MU) broke below the key $1,000 level, reminiscent of its post-earnings plunge last quarter. Meta (META) has also given back some of its earlier gains as the market has taken a sobering look at the substance of its plans, dousing previously high expectations.
degentrading: Position Liquidation Is Brutal But Offers an Entry Window
degentrading believes that current position liquidation events are typically “violent and fast.” While he admits he cannot precisely time the “absolute bottom,” he emphasizes that this is precisely the time for investors to conduct their own in-depth research. Only through solid research can investors build the conviction to hold through heightened volatility and avoid panic selling at the worst possible moment.
He points out that while such washout events are painful, they historically offer the best entry opportunities. Data suggests that sharp drawdowns often mark the starting point for future gains. However, degentrading also warns that leverage is not suitable for long-term holding; it works only for short-term trades lasting a few days. Long-term leveraged exposure introduces significant volatility decay. He advises investors to ensure they can withstand further drawdowns and avoid being forced out by excessive leverage.
Risk Warnings and Trading Advice
degentrading concludes by noting that while current market sentiment is bleak, it is exactly the time to test investors’ discipline and research depth. He encourages identifying quality assets amid the liquidation chaos and gradually building positions on pullbacks, while strictly controlling leverage ratios to withstand ongoing volatility.
