I have been washing my face in the waterfall for a week.
In the early morning of December 20, the market's reaction to the Fed's "hawkish" decision to delay rate cuts the day before expanded, and the crypto market continued to fall. Bitcoin fell to below 96,000 USDT, and Ethereum fell from a high of 3,900 USDT in the early morning of the 19th to 3,322 USDT. The violent fluctuations caused the 24-hour contract liquidation volume of the entire network to exceed US$1 billion, and the decline of altcoins was generally more tragic.
The feast is over, and I have to pay the bill again? Should I sell at the top or buy at the bottom?
If you're mad at yourself for not selling before the FOMC's hawkish pullback, remember that you have little advantage in predicting the market's reaction, and view this as an opportunity to take your time. Don't overtrade. In the long run, just be patient and you'll be fine.
If Bitcoin reaches $90,000 (which is unlikely), a large number of altcoins will be liquidated, providing a very good buying opportunity.
If Bitcoin breaks down, I predict that a lot of buying will appear again at 90,000. In pure panic, it may fall all the way to 85,000 US dollars. Altcoins will completely collapse.
The suitable price to buy ETH would be 3000, and SOL would be 160.
Is this wave of decline an episode in the bull market or a real turning point in the market trend?
Last night, the Federal Reserve announced a 25 basis point interest rate cut. The market originally expected this to bring a rebound, but Powell's subsequent speech changed investors' mentality. He said that although inflation has fallen, the cooling speed has not met expectations, and the number of interest rate cuts in 2025 will be significantly reduced.
For risky assets such as Bitcoin, high interest rates mean increased funding costs and rising investment risks. As a result, Bitcoin fell rapidly and market sentiment turned cold. In addition, Powell responded to Trump's proposal to establish a Bitcoin reserve, making it clear that the Federal Reserve cannot hold Bitcoin and does not intend to change the existing legal framework. This further increased market uncertainty.
From a technical perspective, Bitcoin is currently showing signs of short-term adjustments, with bullish momentum weakening and a typical top divergence. In addition, a "top pattern" structure appears on the daily chart, suggesting that it may face downward pressure in the short term. On-chain data shows that the number of active trading addresses has declined and the inflow of funds to exchanges has increased, indicating that some investors have taken profits at high levels. At the same time, risk aversion in the derivatives market has increased, and demand for put options has reached a three-month high.
Members have been reminding everyone to lighten their positions since Monday this week. Don’t enter the market yet. So far, it has been a perfect escape from the top. Now we are waiting for the bottom signal to appear and the market to reverse, and start preparing for the next wave of rising market.
Although the Fed's policies have caused sharp market fluctuations in the short term, Bitcoin has experienced multiple fluctuations and will find new upward opportunities at certain support levels. A 20% adjustment is the norm in a bull market, and such a pullback is a good time to buy. Therefore, despite the short-term price drop, the market support remains strong in the long run.
The current market sentiment is panic, and data from the options market shows that investors are increasingly concerned about the short-term decline of Bitcoin. For investors, it is crucial to stay calm. In the face of market fluctuations, rational analysis and the formulation of clear trading strategies are key. The short-term adjustment of the market provides investors with an opportunity to buy at a low price. For long-term bullish Bitcoin investors, this short-term fluctuation provides an opportunity to "buy low".
Where are the future opportunities?
Despite the current market volatility, Bitcoin's long-term potential remains strong. With more and more institutions joining in and the gradual clarification of crypto industry regulations, the future of the market is full of opportunities.
This adjustment period may be a good time to observe and enter the market. If the expectations of the Fed's interest rate cuts continue to decrease in 2025, the market may gradually stabilize and provide more opportunities.
Although the current market is volatile due to the hawkish remarks of the Federal Reserve, from the perspective of Bitcoin's fundamentals, this adjustment is likely to be just a normal fluctuation in the bull market. For investors who are optimistic about the long-term potential of Bitcoin, the current market decline may be a buying opportunity worthy of attention. Be patient and analyze rationally, and future opportunities are still worth looking forward to!
When everyone panics and suspects that the bull market is gone, it is time to grab stocks. The market is always against human nature. It is best to avoid noise and invest in your own logic.