Today, the old mainstream coins have seen a sustained rise led by XRP. The main reason may be that investors in these varieties have already been mostly washed out, with lighter positions. Bitcoin is currently testing the support near 95000 downwards. From the liquidation map, the support around 95000 over the past seven days is still quite strong, while the pressure above is near 99000. In the evening, when the American institutions are back at work, it is expected to pull up easily, so there is actually nothing to worry about during the daytime pullback. From Bitcoin's market cap share, there is still some room for a drop, indicating that altcoins still have some room for a rebound.
In the past month, the total market cap of altcoins ranked outside the top 10 has doubled, Bitcoin has risen by 50%. Simply put, if your account hasn't doubled in the past month, you've underperformed against the average altcoin gain. If the gain is less than 50%, you’ve even underperformed Bitcoin. Currently, funds are clearly switching in the market; previously, Bitcoin + meme was a combination, while traditional altcoins driven by Ethereum are now a combination. The Solana series has already exploded, so it's temporarily subdued, and the BSC series has yet to explode. Over the past ten days, funds have clearly moved out of Bitcoin speculation into Ethereum-related assets, and funds from on-chain low-quality coins have followed. Currently, it is believed that this wave of traditional altcoin speculation will continue.
In the past two years, Bitcoin's price has risen sixfold, but altcoins have only risen less than threefold. Considering that the funding environment is nowhere near as favorable as in 2021, expectations for this round of altcoins have been significantly lowered. Being able to achieve several times with a full position would be very satisfactory.
After this round, most people have understood the impact of the macro funding environment on altcoins. Similar to the Russell 2000 small stocks in the US stock market, only during a liquidity phase can the Russell 2000 significantly outperform large technology stocks, and altcoins can significantly outperform Bitcoin. Otherwise, even in a bull cycle but in a quantitative tightening state, holding altcoins for 85% of the time can be quite painful. In the next bull-bear cycle, the macro funding environment must be considered to determine the best allocation of cryptocurrencies.
In addition to the altcoin market brought about by some fund switching, there is also a possibility next year that a new batch of ETF applications will be approved. Currently, the media has reported that there are four altcoins applying for ETFs and two more in preparation. These ETF applications may be the foundation for the next wave of altcoin market, but the estimated time is 2025 or even later, which is the second wave of potential market under the condition of no macro liquidity.
Speaking of ETH, last Friday, the single-day capital inflow for Ethereum's ETF exceeded 330 million USD, while the same day Bitcoin's capital inflow was only 320 million USD. This is the first time in human history that Ethereum's ETF has beaten Bitcoin's in a single day, even trending on social media. Therefore, Ethereum's performance over the weekend was also quite good, with prices peaking at 3760.
The ETH/BTC exchange rate has also exceeded 0.038, which can be considered a small rebound. There is still some distance to Ethereum's real explosion. After all, Bitcoin has reached new highs so many times, while Ethereum has yet to return to this year's 3977 in May and 4093 in March; it is even further from the historical high of 4800, which is much farther than Bitcoin's distance from 100k. It can only be said that Ethereum still has a lot of room for growth.
Why have these old altcoins surged so sharply recently?
Mainly due to favorable policies from Trump.
He hopes to eliminate all capital gains taxes on cryptocurrencies issued by American companies.
This means that Americans holding ADA, ALGO, XRP, HBAR, and other crypto assets will gain profits that are completely tax-free, as the creators of these coins are American companies.
On Coinbase, XRP ranks first in spot trading volume, with its trading volume equal to the sum of BTC, ETH, and DOGE, indicating that American investors' FOMO sentiment has already emerged.
The market cap of XRP also reached a new high, returning to the top three. It also plans to issue new stablecoins.
The trading volume of Stellar (XLM) has also surpassed SOL. XLM is an old project launched in 2014, which has lost 90% over the past four years, but has quickly returned to near its historical high in the last three weeks.
From the current trend, as Ethereum rises, funds are beginning to flow into altcoins on exchanges. Don't easily switch the altcoin projects you previously held, as there is a high probability of a rotation market.
The reason there hasn't been an altcoin season before is that the market lacked new funds, but with the Federal Reserve continuously lowering interest rates, the incremental funds in the market are gradually increasing.
Although many exchanges' coins are garbage, they can still be picked up and speculated on.
However, there are methods for picking these projects.
Currently, the best speculative targets are two types: newly launched meme coins and some old coins that have become active again.
Recently, the coins that have risen sharply are also the old coins from 2017 and this year's new meme coins, as they have the least supply pressure.
As we enter a new month, we continue to position ourselves, with several points that everyone needs to pay attention to:
1. The exchange rate of ETH has risen too steeply, so a consolidation phase is relatively good for continuing to push higher. Support is at 0.373, while 3730 is also a strong resistance level; the initial support to watch is around 3570.
2. Altcoins have already shown daily and weekly rebounds as ETH leads the way, increasing the likelihood of slight market adjustments.
3. On the 5th of this month, there is a non-farm payroll report, on the 11th there is a CPI report, and at the end of the month, there is Christmas, which may cause significant market fluctuations.
