When I woke up, the sky of the cryptocurrency world collapsed again! BTC fell below 100,000, and the altcoins fell again. Many people lost money and couldn’t figure out why the altcoins kept falling. There are several main reasons for this plunge! The main reason is the statement made by Lao Bao mentioned in Chongge’s article yesterday:
Powell stated for the first time at a press conference after the interest rate meeting that the Federal Reserve does not intend to add Bitcoin to its balance sheet.
“The Federal Reserve is not allowed to own Bitcoin. The (Federal Reserve Act) governs what we can own, and we have no intention of seeking to change the law. That is something for Congress to consider, but the Fed is not seeking to change it.
Powell: "The pace of monetary policy adjustments will slow down in the future." It is rumored online that two interest rate cuts are expected next year!
Everyone knows the current economic situation of the United States. They are just bluffing themselves into believing that they are rich. They have tens of trillions of dollars in debt. Everyone knows that lowering interest rates is the general trend, but they still have to say a few words after the rate cut to show how strong their economy is. Yes, those who understand understand!
Powell's remarks this time were both hawkish and dovish. Financial markets around the world are diving, one more than the other. As far as the cryptocurrency circle is concerned, this wave of altcoin plunges is similar to the trend on July 31 when the Bank of Japan decided to further raise interest rates at its monetary policy meeting, raising the induced target of the "unsecured overnight lending rate" as the policy interest rate from around 0-0.1% to around 0.25%!
On the day of the rate hike decision, the Japanese yen fluctuated sharply. The USD/JPY exchange rate fluctuated downward, falling below 150 during the session, the first time since April this year, and fell by more than 1.7% during the day.
After the news of Japan's interest rate hike came out, most of the yen arbitrage funds began to close their positions frantically, and the global stock market suffered a "Black Monday", evaporating more than 6 trillion US dollars in market value.
At that time, BTC also fell back a lot in the cryptocurrency circle, and the altcoins were almost cut in half. At that time, the price of BTC was more than 60,000. In a few days, it fell to around 49,000! It retreated more than 20%! At that time, many people were bearish on BTC to 30,000! The market later gave them a heavy blow!
The current market situation cannot be said to be exactly the same as that time, but it can only be said to be roughly the same! Under the guidance of Powell's speech after the interest rate cut meeting, BTC in the currency circle fell, and most of the cottage industries were cut in half! At this time, many people are confused, and they don't know whether they should persist, or whether the bull they have always wanted to ask is still there! !
Brother Chong gives you a definite answer: the bull market is not far away, what we are afraid of is that you will be one step ahead!
Why do you say that? Let me tell you.
1. Although Powell is very powerful now, he still has to listen to Trump's instructions. When Trump officially takes office, the wind vane will change again! On December 17, 2024, the Bitcoin Policy Institute drafted an executive order proposing to establish a strategic Bitcoin reserve under the Trump administration's U.S. Treasury Exchange Stabilization Fund (ESF) (the order needs to be signed after Trump takes office to take effect).
2. The Trump family's DeFi project World Liberty Financial (WLF) spent 2.5 million USDT to purchase 722 ETH at about 7 am this morning, with an average price of about US$3,460.
The last time WLF bought a large amount of Ethereum was on December 12, when it spent 10 million USDC to buy 2,631 ETH at an average price of $3,801.
During this period, WLF also continued to buy DeFi tokens such as AAVE and ENA. The WLF multi-signature address currently holds $75.49 million in cryptocurrencies, and the top five altcoins held are:
ETH: 15,596, worth about $53.17 million
AAVE: 6,137 AAVE tokens, worth about $1.94 million
LINK: 78,387 LINK, worth about $1.81 million
ENA: 741,687 ENA tokens, worth approximately $733,500
ONDO: 134,216 tokens, worth approximately $233,540
The Trump family is buying at the bottom, what are they afraid of!
3. MicroStrategy will be officially included in the Nasdaq 100 Index on December 23. MSTR will receive a weight of about 0.47%, becoming the 48th largest component, which is equivalent to all ETFs tracking the index buying about $2.1 billion of MSTR. MicroStrategy will be the strongest backing for BTC!
4. The accounting standards specially formulated by FASB for cryptocurrencies last year officially came into effect on the 15th of this month. In the future, American companies holding cryptocurrencies will be able to include their digital assets such as Bitcoin in their company financial reports according to the fair market value.
Before the change, the cryptocurrencies held on the balance sheets of these companies could only be written down if the price fell; only when they decided to sell the cryptocurrencies could the assets be registered as profitable.
5. Chong Ge is optimistic about the future market (the future market refers to BTC)
Every time there is a decline or a wash, many people will panic, and the spot contract will be liquidated! This is the norm in the currency circle. In the current market, BTC is washing the market. If you are very panicked! You can choose to do ultra-short-term to protect yourself!
There is a big premise for ultra-short-term trading, which is that your account must be cleaner than your face.
Basically speaking, before you go to bed every night, your account must be clean, without a single order.
Don’t think about those other things. Anyway, I told my fans that the best way is to have a clean account and no positions before going to bed.
Tomorrow after a good night's sleep it will be a new day. Keep doing what you have done, no matter whether you make a profit or a loss today, no matter whether your positions are profitable or losing at that time, you should clear them all before going to bed. This is a way to protect yourself.
Five common mistakes that can make you lose money when trading cryptocurrencies! Altcoins are always tempting and risky. When prices soar, many investors are prone to emotional decisions, which can lead to losses.
1. Not setting clear profit targets
When the market is rising, it is easy to indulge in the fantasy of "going up a little more", and eventually lose the realized gains when the market reverses. The profitable orders are turned into losing ones! (If you make money, you should leave when you should leave, no pattern!)
How to avoid: Set clear profit targets for each investment. Gradually stop profit in stages to lock in the gains into real funds.
2. Following the hype without a plan!
The appeal of hot projects is hard to resist, but chasing high prices often leads to losses when the heat fades.
How to avoid: Avoid impulsive trading driven by FOMO (fear of missing out).
3. Ignoring risk management
In a bull market, investors tend to be overconfident and invest in full positions or leverage operations, or even hold a single high-risk asset, which may lead to devastating losses. (It hurts to cut losses, but it is not fatal!)
How to avoid: Diversify your investment portfolio and transfer some funds to low-risk assets such as stablecoins. Set a stop loss to reduce the potential risk of a single investment.
4. Overconfidence leads to increased risk
When the market is rising overall, investors tend to mistakenly believe that they have mastered the laws of the market, thus taking on greater risks. (Respect the market)
How to avoid: Stay humble and respect the uncertainty of the market. Always control your positions and avoid exposing yourself to too much risk due to overconfidence.
5. Chasing the Impossible 100x Return
The search for the next "100x coin" often leads to falling into the trap of speculating on low-quality projects and ultimately losing the principal.
How to avoid: Invest in quality projects with strong fundamentals and real use cases. Remember, most of the big gains come from holding high-quality assets for the long term. For example, BTC and BNB
For spot goods, if the market is good, we will make more orders and make more money. Now that the market is not good, we will choose the track we like and start to enter in layers. Bottom-fishing will never reach the lowest point! If you enter in layers, you can avoid missing out!
If you are really panicking, you can do intraday trading. If you are still panicking, then go out and take a look. Life is not just about trading cryptocurrencies!