Today's historical high is superficially exciting, but in reality, it was a struggle to achieve. Looking at the premium on Coinbase, this spike directly leveled the premium this morning, indicating that it wasn't genuine buying with real money, but rather achieved through contract liquidations and long accumulations.
At the same time, the lack of significant wealth effects from altcoins indicates that demand in the market is rapidly depleting, and liquidity is tightening. Looking at the long positions in contracts, a large number of long positions have accumulated above 100,000, which is solid fuel for short positions. Therefore, it will be extremely difficult to continue pushing higher in the short term unless there is a massive buying spree when the U.S. stock market opens, which is rare before Christmas.
Currently at the 105,000 level, if you ask me whether we will reach 11 first or return to around 10, I might lean towards the latter. However, after a correction, it is still possible to break the previous high again. Right now, it’s just a matter of torturing contract funds. As soon as one side has significant capital, it will be guided to harvest.
In summary, remember to respect the market. Losing control often precedes significant losses. We won't predict where this trend will top; it could be at 11 or 12, but there’s not much room left. For those trading small coins, setting a stop-loss is the top priority. Experiencing the feeling of hanging at the peak is something you should avoid in your lifetime.
Altcoins have already rebounded significantly in the past month, so for those trading short-term, this is an excellent buying opportunity. For medium to long-term investors, holding until prices rise is sufficient. For those looking to increase their positions, please pay attention to the order placement points; it might be the last chance before a market breakout!
However, the arrival of altcoin season does not mean it’s your altcoin season, does not guarantee you will make a profit, and does not ensure you can cash out.
Plan ahead: which assets to buy, whether to buy spot or contracts, how to allocate positions in batches, how to take profits when prices rise, when to withdraw funds, whether to hold if others' prices rise while yours do not, or if you should sell your holdings to chase others, and so on. Consider leaving some positions to guard against unexpected situations.
At present, as long as Bitcoin is still 'sucking blood', the market can be considered healthy. Next, we can pay attention to Ethereum's rebound, which may lead to an altcoin surge. Those who exited their positions can look for opportunities to enter and make a swing trade. However, in such market conditions, swing trading can also be risky.
A simple case of a poor mindset: selling too early—chasing again—buying at the peak—getting stuck during the correction.
On the morning of the 19th, at 3 a.m., the Federal Reserve will announce its interest rate decision for December. The market expects a 99.99% probability of a rate cut, which is a clear positive signal. When such good news happens, the opportunity for market movement is quite significant. At the very least, there will be a few days of consolidation to clean out weak positions and short-term high leverage.
Regulatory expectations are set to ease, with funds shifting towards DeFi.
The biggest news recently is that World Liberty Financial (WLFI), under Trump, has started injecting funds into DeFi projects. Originally, WLFI was established in September this year, with a business model providing lending and interest income services for crypto assets. However, after Tron founder Justin Sun announced an investment of $30 million in WLFI on November 25, becoming the largest investor and joining WLFI's advisory team, the project quickly transformed into a more aggressive investment company.
Recently, WLFI purchased various cryptocurrencies with $12 million in USDC, including $10 million in Ethereum (ETH), $1 million in Chainlink (LINK), and $1 million in Aave (AAVE), which has led market investors to eagerly chase previously undervalued DeFi tokens. Although the amounts are not large compared to other investment institutions, which often invest tens of millions of dollars, the fact that this is a DeFi project led by the Trump family undoubtedly sends a strong message to the market—'DeFi regulations may be significantly relaxed.'
WLFI previously announced a partnership with Chainlink, stating it will use its price oracle and cross-chain technology, while choosing to establish a lending DeFi protocol on the Aave v3 main chain. Although the investment amount is not large, the backing from Trump has caused both tokens to soar over 50%, indicating that capital rotation will shift from Bitcoin to DeFi tokens.
Taking LINK as an example, according to Santiment analysis, the rise in LINK prices is mainly attributed to large whale accumulations. In the past two months, wallets holding over 100,000 LINK have increased by 5.69 million, while those holding less than 100,000 have decreased by 5.67 million. This pattern usually indicates potential for more price growth in the future and suggests that major investors have completed their positioning, just waiting for the news from WLFI to drive the price up.
In addition to investment news, market analysts are looking forward to the SEC further easing regulations on DeFi-related companies, allowing these companies to access banking services. SEC commissioners have already spoken out, hoping to assist crypto firms in obtaining financial services from American banks, including account custody, transfers, and related financial operations, indicating that DeFi companies will have greater innovative space under Trump's new policies.
The market is focusing on positive news and policies, redeploying funds into DeFi tokens. Decentralized exchanges like Uniswap and SUI have seen astonishing increases. However, we believe that the crypto market has just begun to shift towards DeFi. If the overall market doesn't decline in the future, there's a significant opportunity for DeFi tokens to outperform the broader market. Currently, it's just the beginning of the upward trend in DeFi, warranting investors' attention and anticipation.
