This year's Christmas market performance broke expectations; there was no market crash, but rather a recovery in sentiment in the crypto market driven by the rise in US stocks. Bitcoin previously fell due to fluctuations in US stocks, but if Bitcoin can rise before December 25, it is likely to pass through Christmas safely, bringing positive signals for the future market.
Ethereum's trend also conveys signs of stability. Today it briefly broke through the key resistance level of 3500, thanks to the support from ETF capital inflows, the market sentiment is steadily recovering. As January approaches, the market's focus will shift to the release of the first batch of compensation funds from FTX on January 6. This $16 billion fund is expected to flow more into Ethereum and leading altcoins rather than Bitcoin, as the current cost-effectiveness of Bitcoin has low appeal to retail investors.
At the same time, another major event that the market is looking forward to is Trump's official inauguration on January 20. The market is full of expectations for his economic stimulus policy and cryptocurrency strategic reserve plan, which may trigger a new round of market rallies. Therefore, from the perspective of early layout, FTX concepts, Trump concepts, and Musk concepts are likely to become the core narratives of the market in early January.
The rhythm of altcoin season: opportunities and risks coexist.
For altcoin investors, the evolution of market sentiment and capital flows is crucial. Historical experience shows that altcoin markets usually unfold in two waves: the first wave starts with a small market after Bitcoin's influence, followed by a more significant explosion during high sentiment. Currently, Bitcoin has been adjusting in a key position for nearly four weeks, laying the groundwork for the potential explosion of altcoins.
However, the full arrival of altcoin season requires several important conditions: a stable rise in Bitcoin, strong performance from Ethereum, and the release of market sentiment. If both Bitcoin and Ethereum pull back, altcoins will face greater adjustment risks. Therefore, investors need to be patient and should not bet heavily too early. The real altcoin season may have to wait until Trump takes office, pushing changes in market patterns through policy expectations and capital flows.
US policy expectations and opportunities in Grayscale concepts.
The policy easing expectations brought by Trump's inauguration is another major focus for the market. The next phase of Ethereum's market action has not yet entered the real rally stage, and its volume increase will become an important signal for confirming the market trend. Once the market rhythm accelerates, the competition between retail and institutional investors will become fiercer, and investors need to overcome fear at the bottom and control greed at the top to seize the market's brief high points.
How to seize opportunities in 2024?
2024 is destined to be a year full of opportunities and challenges. The flow of FTX compensation funds, Trump's policy fulfillment expectations, and the performance of Grayscale concept coins will become important market clues at the beginning of the year. Although adjustments in a bull market environment are difficult to avoid, they also accumulate momentum for subsequent gains.
Investors need to closely monitor the following key points:
Price trends and breakthroughs of Bitcoin and Ethereum;
The flow of funds in altcoins and changes in market sentiment;
Support for cryptocurrency by US policy and the performance of Grayscale holdings.
In the context of increased market volatility, patience and faith are necessary conditions for investment success. Deploying long-term opportunities while remaining flexible to adjustments will be the key to victory in 2024.
Work statement: Personal opinion, for reference only.