Good afternoon, siblings! Today, Bitcoin reached a new high, with a peak price of $107,793. The main reason for this increase is that MicroStrategy's stock has been included in the Nasdaq 100 index, and the company's CEO, Michael Saylor, announced a significant purchase of Bitcoin again.
From this perspective, MicroStrategy clearly believes that Bitcoin breaking $100,000 is just the starting point, hence they are continuing to increase their holdings. This move is clearly event-driven, but unfortunately, this momentum may be hard to sustain. If new FOMO sentiment does not spread, the market may experience a pullback in the short term.
Regarding altcoins:
Currently, most altcoins are being suppressed by Bitcoin, generally falling around 10%. The entire market is still in a phase of consolidation, and this volatility is expected to last for 1-2 weeks. With the arrival of January, Ethereum and altcoins may explode and challenge new highs.
After experiencing a large-scale liquidation and leveraged clearing, the market's risk has been released, and the funding rate has returned to normal. The current market shows a gradually rising bottom and a volatile trend. If the price retraces to around the daily 20 moving average, it would be a good buying opportunity.
In the upcoming altcoin layout, two main concepts are worth noting:
The liquidity pool after Bitcoin's capital outflow: namely ETH, XRP, etc.
Projects supported by President Trump: such as Defi, U.S. projects, compliant concepts like LINK, AAVE, ENA, ONDO, etc., closely monitor Trump's wallet movements.
Market Focus This Week:
This week is the last super central bank week of 2024, focusing on the interest rate decisions of the U.S. and Japan:
Regarding the United States: The interest rate decision will be announced at 3 AM on Thursday. Last week's CPI data met expectations, and a 25 basis point rate cut is almost a certainty, with the CME probability reaching 97%. This means that U.S. stocks and the crypto market have fully priced in this rate cut, so the positive effect of this news on the market is limited. The focus on Thursday will shift to Powell's speech and the outlook for the January 2024 FOMC. The CME predicts an 80% probability of keeping rates unchanged in January, which will be a key point of market attention.
Regarding Japan: The market generally expects that Japan will not raise interest rates in December, which is comforting for the market. If Japan does raise interest rates, although the impact may be small, it could cause market unease, especially when combined with the negative effects of the Federal Reserve's policies. However, if Powell emphasizes that the U.S. economy is too strong and does not lower interest rates, it could actually bring some positive effects to the market, avoiding recession expectations.
In the short term, if the market digests the expectation of not cutting interest rates, price increases are still possible, as the overall trend remains positive.
When will altcoins experience a rebound?
Despite Bitcoin reaching a new high, most altcoins are currently in a correction phase, especially those on centralized exchanges, which are almost all declining. Although the total market capitalization of the crypto market has exceeded $3.9 trillion to set a new high, most of the growth comes from Bitcoin's contribution, while the market share of altcoins continues to decline.
Although ETH has performed relatively well, the ETH/BTC exchange rate is still falling. However, the recent inflow of ETF funds into Ethereum reached $850 million, setting a historical high, and off-exchange funds are increasingly focused on Ethereum. Several institutions also predict that Ethereum may reach a new all-time high by the end of the year, which is not impossible. As long as the Ethereum Foundation does not 'take action,' its ATH should not be far away.
Market Outlook: Altcoins will experience a rebound
Although Bitcoin currently dominates the market and many people have less confidence in altcoins, I remain very optimistic about the future. From December to March, there may be more favorable factors to drive the market upward. Therefore, do not be swayed by those who always hold a bearish view of the market; after all, the bearish sentiment during a bull market is usually quite loud. If you are always bearish on the market, consider whether you should exit.
In the past few days, altcoins have seen slight adjustments, but after the adjustments, they are likely to continue their rebound. At this time, it is not advisable to chase after those coins that have already risen significantly, but rather to focus on strong coins that have adjusted for a month or have experienced a sharp decline, as these coins may bring greater opportunities.