There are many negative factors for BTC at present, and some factors of market selling pressure:
1. Mt.Gox liquidation sale: Just like the supermarket near your home suddenly closes down for a big sale, it will definitely affect the business of other nearby businesses.
2. The government starts selling coins: Imagine that the government suddenly decides to sell the country’s gold reserves, which will definitely cause a sharp drop in the price of gold.
3. Changes in the Federal Reserve’s policies: Just like your parents suddenly changed your pocket money rules, it will definitely affect your spending habits.
4. Miners start selling coins: This is like farmers who are afraid of a drop in food prices, so they quickly sell all their stored food, which results in a food surplus in the market, and the price really drops.
5. The impact of the US election: Just like when you are in school and your class is electing a new class monitor, different candidates may set different class rules, and everyone is waiting to see whose class rules are better.
6. The international situation is tense: It’s like the class next door has a quarrel with your class, and everyone is nervous and dares not act rashly.
The price of Bitcoin is like a pot of soup. Now all kinds of bad news are thrown into the pot like seasonings. Every time a seasoning is added, the soup becomes more unpalatable. These factors are mixed together, making the already bad situation even worse! This leads to the decline of Bitcoin.
The news of Germany selling Bitcoin directly caused investors to be bearish. BTC still controls the direction of the market, and Justin Sun wanted to reach out and catch the sold Bitcoin to ease the market sentiment. However, every time Boss Sun speaks out, investors will shout that it is not good. Boss Sun’s "Ding Hai Effect" has long been a consensus.
The first half of 2024 will be a bull market for BTC, but there will be no bull market for altcoins. Here is a brief analysis of the reasons:
1. First of all, the veteran players have become rational now, and will not rush in rashly like before.
The total market value of cryptocurrencies is too small at 2.2 trillion. BTC, ETH and Tether account for 1.6 trillion, leaving a market value of more than 400 billion. In recent years, the number of altcoins has increased significantly, which has already diluted the remaining market value of more than 400 billion. How can the price rise?
3. Recently, major exchanges have frequently listed VC coins, and the inflated market value has been unlocked and released endlessly. Investors have already reacted! They will not easily make a move. And this evil behavior committed by the exchange will further dilute the altcoin.
It is precisely this magical place, the cryptocurrency world, that best reflects human nature. There will always be a hot spot in the cryptocurrency world to ignite market sentiment!
The market has different opinions on when the Ethereum spot ETF will be passed, how much new funds it can bring, and whether it can trigger a real surge in the market. Under the wave of AI, the speculative hot money in the market is limited, and they are more inclined to flow into the stock market rather than the cryptocurrency market. After all, Web3 has not yet produced a convincing narrative or constructive progress that is enough to attract hot money from outside.
Future Outlook
Foreseeable selling pressure: Bitcoin confiscated by the government, the bankruptcy liquidation of MTGox, and the bankruptcy liquidation of FTX are all being gradually digested.
Foreseeable buying: The assets under management (AUM) of BTC ETF only account for less than 0.1% of the total allocation of the 10 institutions with ETF qualifications. It should reach 1% to reach the first milestone. Previously, less than 0.1% of buying has pushed Bitcoin from $40,000 to $73,000. If there is another 10 times inflow of funds, the Bitcoin price of $100,000 will not be difficult to reach.
We are in a 5% interest rate environment, and there are $6 trillion in US money market funds. In the zero interest rate era (2011), this amount was $2.6 trillion. As risky assets (BTC and AI) are currently scarce, rate cuts will attract a large amount of funds to the market.
The turning point of the future market is to wait for interest rate cuts to truly inject water into the market, and then it would be best if a new narrative emerges in crypto. As long as there is a lot of water, it will naturally overflow into crypto. As for how much it can get, whether it can outperform the U.S. stock market like it did in 21 years and grab the water from the U.S. stock market, it depends on whether there is an attractive new narrative.
Of course, the current macroeconomic situation is complex, and the performance of the entire capital market after the rate cut is difficult to predict. But I think it will at least be back in sync with the US stock market.
In the past, the cryptocurrency community generally focused on BTC transactions. If BTC fell below the support level, other currencies would not be able to recover. However, since BTC currently has many negative factors, the German government is selling coins and Mt. Gox is repaying debts, you can focus on ETH in the next two days.
In other words, if you still hold BTC and are hesitant and don’t know what to do, you can watch ETH and trade. If ETH also falls below, it should be really powerless to save the situation. If ETH can still hold the position of 2850, it may be that BTC just fell a little more because of its own weak trend. Just like the callback at the end of April, ETH did not hit a new low, while BTC hit a new low.
Finally, I would like to quote Buffett: "When others are fearful, I am greedy; when others are greedy, I am fearful." Let us encourage each other!