Capturing Cycles in "Dual Extremes": New Huo Technology's Strategic Judgment on Increasing Bitcoin Holdings Against the Trend

Author: Allen Ding, President of New Fire Technology Research Institute

In the past period, the pullback of Bitcoin and market sentiment have reached the most "extreme" positions since 2022. While the market is generally filled with panic and doubt, New Fire Technology (1611.HK) has chosen to increase its Bitcoin (BTC) holdings against the trend. According to an announcement at the end of November, the group has initiated a purchase plan totaling no more than $5 million and has completed nearly half of the allocation in the first phase, with an average purchase price of approximately $82,338.

This action has sparked widespread attention in the market. Many people are asking whether this is merely a speculative behavior of "betting on a rebound" against the backdrop of a frustrated narrative for a new bull market.

The answer is no. Our decision is not based on short-term emotions but is built on a professional foundation of systematic review of macroeconomic trends, market structural resilience, sentiment indicator corrections, and industry fundamentals. The core of this strategic deployment is based on four key judgments from our New Fire Research Institute.

1. The short-term decline of Bitcoin has reached historical extremes, and the price has entered the " wrongfully punished zone "

Looking back at this round of adjustments, its nature is more akin to an "emotional stampede" driven by sentiment and liquidity panic, rather than a simple technical correction or fundamental deterioration.

From a price performance perspective, BTC's monthly decline over the past month is about 25%, with a cumulative pullback of about 35% from its peak. Such a decline clearly falls into an extreme range in the historical context of the past three years. The price has already overdrawn a large amount of pessimistic expectations in the market, leading to a significant narrowing of the space for further declines. For long-term allocators, this "emotionally amplified" deep adjustment provides the most cost-effective buying range when viewed over an extended time dimension, which we refer to as the "wrongfully punished zone" or "oversold zone."

( Coinglass data from December 3rd, the greed and fear index recently fell below 10 .)

In line with the price, market sentiment has also fallen to historical extremes. According to Coinglass data, the fear and greed index recently hit a new low in three years, and is the second lowest in the past five years, only behind the LUNA crash in 2022, which was referred to as the "Lehman moment" in the crypto world. However, this decline has not seen a systemic black swan event similar to the LUNA collapse, as the industry's compliance and institutional foundation remain solid.

This structural mismatch of "both price and sentiment have fallen extremely, but the fundamentals have not deteriorated to the same degree" is precisely the core logic behind New Fire Technology's decisive intervention and strategic allocation at an average price of approximately $82,338.

2. The macro direction remains accommodative, and the "snake and rat" phenomenon has amplified pessimistic expectations

Another important background for this round of adjustments is that the market once had extremely pessimistic sentiments regarding the global liquidity direction, especially the Federal Reserve's policy expectations. However, the New Fire Research Institute believes that short-term noise and repeated expectations have not changed a more important direction: the macro direction still leans towards accommodation.

We prefer to attribute the market's previous pessimistic sentiment to the "snake and rat" phenomenon of policy signals that led to amplified expectations: on one hand, there is wavering within the Federal Reserve regarding the path and timing of interest rate cuts; on the other hand, the instantaneous fluctuations of geopolitical events and macro data make it difficult for the market to form a stable consensus, exacerbating investors' panic.

Although the Federal Reserve's Beige Book indicates no significant changes in the economy, with weakened labor demand and moderate price pressures, this "neither hot nor cold" state precisely limits the Fed's ability to continue adopting aggressive tightening policies. Recent releases of various macro indicators point to inflation pressures not being out of control.

( Polymarket's latest prediction shows a 94% probability of a 25 basis point rate cut in December .)

Most importantly, once employment data confirms a weakening trend, the rise in the unemployment rate will determine that monetary policy cannot remain at a "tight and high" position for long. On Polymarket, the probability of a rate cut in December has reached 94%, indicating that the market is reaching a consensus on the path of global liquidity being "loosening while walking."

In addition to the Federal Reserve's policy expectations, the global compliance process is accelerating, providing solid external incremental certainty for the crypto asset ecosystem. Positive signals from the institutional level are also continuously emerging: first, Bitcoin ETFs have shifted from three consecutive weeks of net outflows to inflows, indicating that institutional funds are beginning to replenish. Second, BMNR continues to buy and its mNAV has risen above 1.1, showing that smart institutional funds are actively entering the market. Third, there were concerns that Strategy (MSTR) might see its mNAV drop below 1, raising the risk of selling BTC mentioned by its CEO. However, MSTR subsequently announced a cash reserve of $1.44 billion, sourced from the sale of Class A common stock, successfully alleviating panic and bringing its mNAV back above 0.9, proving that leading institutions in the industry have strong self-rescue and financing capabilities.

In the medium to long term, the tapering (QT) is nearing its end, and the overall environment is "accommodative rather than tightening." In this macro environment, choosing to gradually allocate high-elasticity assets during the worst sentiment and the largest price pullbacks is a risk-return ratio we more favor.

3. Industry Responsibility: Expressing Long-Termism with Real Capital

Finally, New Fire Technology's actions also embody a sense of industry responsibility and value anchoring. As one of the earliest and currently most established digital asset listed companies in Hong Kong, we understand that it is easy to talk about "long-termism" when the industry is thriving, but the true test of attitude comes during significant valuation corrections, extreme pessimism, and the loudest voices of doubt. New Fire Technology has chosen to increase its BTC holdings with real capital during this phase, aiming to send a clear signal through action:

1. Rationality and Long-Term: The group's allocation is based on three rational judgments of "extreme decline, excessive sentiment, and macro optimism," leading to strategic decisions.

2. Confidence and Responsibility: We remain firmly optimistic about the medium to long-term prospects of Bitcoin and the entire industry, willing to stand alongside the industry during difficult times. This move aims to form an important part of the group's diversified asset allocation, and in the future, we will flexibly decide on subsequent purchase timing based on market performance and price conditions, but the core strategy is to firmly practice long-termism.

In summary, New Fire Technology chose to counter-trend buy BTC when it fell to around $80,000 at the end of November, and the core logic can be condensed into one sentence:

In the "dual extremes" of price and sentiment, the fundamentals and compliance trends have not faltered, the macro direction remains accommodative, and for long-term capital, this now resembles a "strategic allocation window after being wrongfully punished," rather than the end of the exit. Although any asset carries volatility risks and short-term prices may continue to fluctuate, if we extend our perspective from weeks to years, New Fire Technology is more willing to make strategic decisions that can still be explained in the future during such "everyone is pessimistic" moments, continuously solidifying the foundation for our vision.

(The above content is for market observation and research viewpoint sharing only and does not constitute any investment advice.)