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This cactus was taken from my dad’s cactus garden before it was destroyed. It is very important that I keep it alive. I’m wondering if all this white cottony stuff on the top and the spikes is normal. Doesn’t look like mealy bugs. Is my plant healthy?

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In my opinion, that is completely normal "felt" or "fibers" that some cactus produce. Some produce it from areoles like this plant. It is generally longer/denser on new growth (exactly as in your plant). The theory is that this is temporary shade for the new growth at the plant apex.

If you scrape all the areoles with their felt off, you probably won't kill your plant, but it will look bad and will be scarred forever.

Cochineal will be on the areas between the areoles, not exclusively in the areoles. See image below.

The good news is that you've got new growth which is a positive sign towards it being healthy.

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It looks like you may have a cochineal insect problem. If you scrape some of the white stuff and find red liquid under it, this confirms the diagnosis. You can usually remove the infestation with a good spray of water and some insecticidal soap. Persistent infestations may require insecticide treatment.

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