Today's assignment won't discuss BTC; after all, liquidity is what it is on weekends. Instead, I want to talk about the key data from Friday.
I've seen many friends enthusiastic about the massive inflow of #ETH spot ETFs, even surpassing #BTC in terms of funds, thinking this signals the start of the altcoin season. I would like to temper that enthusiasm; such signs must be maintained for more than a week to confirm a real increase in liquidity. A phase increase in spot ETF funding only indicates that American investors are more interested in #Ethereum, and based on over ten months of experience with #Bitcoin, the funds from spot ETFs will not overflow.
The only two factors that can truly drive overall liquidity back through an overflow effect are the capital amount in exchanges and the capital amount on-chain. Only these two types of funds will flow into ALT (altcoins) after an overflow. Additionally, if friends are interested in researching, you might find that the so-called altcoin seasons have recently erupted on weekends; once it returns to weekdays, they basically languish. This is because they have taken advantage of the lack of liquidity on weekends, which has phase-driven the rise of altcoins under emotional stimulation.
However, the good news is that the current sentiment is still quite high. Even during pullbacks on weekdays, some tokens have limited declines and can form a slight upward oscillation trend. But this trend is very different from the altcoin season generated by a true liquidity explosion, like in 2021.
So it's not that the altcoin season won't happen; rather, I was still telling my friends in the third quarter that the altcoin season would appear, just that the time wasn't right. From what we see now, it may still require more validation. Of course, if you think this is just a matter of time, there's nothing wrong with positioning yourself now.
Personally, I am still quite worried about the impact on the market after the FOMO sentiment fades, which may include a certain pullback even for BTC, especially after December 11. Whether the market will phase end FOMO due to Microsoft's voting failure or whether it will lose liquidity again because of Christmas, which may instead stimulate the altcoin market, is uncertain.
So do not judge trends based on a single day's data; look more, track more. In fact, I recommend paying more attention to trading volume. I just scanned my watchlist and indeed found that several tokens have seen a significant increase in trading volume over the past two weeks, especially with a large amount of buying activity; this may indicate that funds are preparing to enter the market.
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