Bitcoin rebounded strongly to over 101,000 USD earlier this week after a correction. This rebound not only boosted market sentiment but also led to a significant recovery of several altcoins. At the same time, this rebound coincided with a slight increase in the inflation rate to 2.7% in November, further pushing cryptocurrencies to break through important levels.
Currently, Bitcoin has formed a small level upward push, maintaining above 97,400-98,400 is considered strong. If this is the first wave, then the next surge will be more violent than this one.
Currently, the rapid rebound after the sharp decline has arrived. Everyone should remember to take some profits if they haven’t reduced their positions before, to avoid the recurrence of extreme market conditions. Do not panic excessively during a decline, thinking about cutting losses; most of it is caused by being over-leveraged. If your position is not large, then a drop is actually a good opportunity to add positions. At the same time, do not forget the hard days when prices rise; controlling greed will allow you to have chips to buy the dip when others panic.
Will Bitcoin experience a major drop during Christmas?
Let’s say the answer first: the possibility of a major drop is low.
The recent drops have all been the type of 'spike and explode contracts' washout market. From the funding distribution chart of the contracts, the side with more leverage opened will be 'exploded' by the main players, which can basically be predicted accurately.
Through these operations, the main players are cleaning out some overly leveraged and unconfident chips, preparing for the next wave of growth.
From an overall trend perspective, we are currently in the mid-phase of a bull market, and the market is still waiting for Trump to fulfill his election promises after taking office on January 20.
As long as the market consensus is not broken and there are no major negative news, the upward trend of Bitcoin should continue.
From the ETF data, yesterday, Bitcoin's spot ETF saw a net inflow of 604 million USD, and Ethereum's spot ETF also had an inflow of 276 million USD.
This week, Ethereum's spot ETF inflow hit a new high, indicating that large institutions in the U.S. are increasing their buying of Ethereum, and funds are flowing into Ethereum's ecosystem.
Yesterday, Ethereum also experienced a catch-up rally. According to the market trend, it might soon break through the current resistance level. Once it breaks through, the target could reach a previous high of 4,800 USD.
The Trump family bought ETH, LINK, and AAVE through the cow agreement, which also spurred the catch-up of these projects.
From this wave of increase, it can be seen that the stronger DeFi projects are mainly related to the situation and compliance policies in the U.S.
I feel that Ethereum may have a big surge next, as almost all DeFi projects are based on the Ethereum ecosystem. Many large institutions now also treat Ethereum as a top choice, such as Coinbase's Base chain.
Overall, the risk of a significant drop in Bitcoin is low. I don’t see any reason to sell Bitcoin. Bitcoin is the only project suitable for holding large positions, and there is still a lot of room for future growth.
Finally, let’s talk about altcoins.
Stay firmly bullish! The view that the altcoin season is about to arrive remains unchanged.
The first phase of the bull market is sector rotation, while the second phase will select strong sectors, which are the leading sectors. Analyzing the market data can reveal that the market has undergone large-scale washouts, mainly targeting altcoin contracts.
During this process, the overall volatility of Bitcoin and Ethereum was less than 10%, while altcoins basically corrected to around 20%-30%. This round has washed out the altcoin contracts very cleanly.
After the washout ended, the market welcomed a strong overall rebound. Bitcoin has re-stabilized at 100,000 USD, and Ethereum is also on its way to breaking through 4,000 USD. Some altcoins not only rebounded but even broke through new highs. In the context of a widespread rebound in the secondary market, just hold your positions well.
As for the coins, there are many buyable targets, whether from a sector perspective or a conceptual perspective. During the widespread rise in a bull market environment, there is no need to switch positions too frequently. Many times, after you switch positions, the market goes up immediately; just avoid buying particularly poor targets.
In the bull market cycle, it has been emphasized many times that every drop is the best opportunity. Every drop is like giving away money, and each drop is also a good time to review the altcoin market and adjust positions.
If you are a spot holder, you don’t need to worry at all. Starting from November, the bull market has lasted only 1 month. How could such a short cycle end easily? Next, focus on areas like DEFI, MEME, and AI.