After experiencing a slight pullback earlier this week, Bitcoin surged again to break the 100,000 USD barrier. Earlier, BTC briefly surpassed last week's high of 110,800 USD at six in the morning before retreating, with a nearly 24-hour increase of 4.6%. If it can successfully break through again after this fluctuation, it is expected to challenge the historical high of 104,000 USD.
In the past two days, the cryptocurrency market has been tumultuous, with the market being thoroughly washed out. Microsoft’s shareholder meeting voted against the Bitcoin investment proposal, and Google announced the quantum chip Willow, which also brought significant volatility to the market. Retail investors are hastily cutting losses, yet the net inflow of Bitcoin ETFs still maintains its trend. Last night, the US November CPI was also in line with expectations, and the funding rate directly dropped to 0. The market lightened up, making it easier to drive up again, and it stood above 100,000 USD by night.
Yesterday it was suggested that Wednesday night’s CPI is very likely to be favorable and will drive the market up, similar to the logic that last Thursday anticipated Friday’s non-farm payrolls would drive the market up. Additionally, it was mentioned that on Wednesday morning, if further short positions were taken, the position size should be half of Tuesday’s high short. When momentum is strong, it tends to weaken; declines usually do not last more than 72 hours, which is a hard rule.
Shorting on the third day, the position size should be small. Why should it be small?
The goal is to have enough space to add positions after a rebound, so there will be an opportunity to take profits around the Fed's interest rate meeting next week. When trading in the short term, sometimes a broader perspective is needed to assess the situation.
Many fans are asking where the follow-up direction for Bitcoin is?
Answer: The follow-up market is firmly bullish, and the current market is very healthy. (1) The continuous bulk purchases of coins by MSTR and MARA at costs above 90,000 provide strong support for BTC prices, expected to last at least until the new government takes office at the end of January.
At the end of October, a total of 21 billion USD in stock financing was announced, using 2 billion weekly, currently having 9 billion USD remaining. At the pace of using 2 billion weekly, it is expected to last 4 to 5 weeks. Once the 1.4 billion stock ATM financing balance is exhausted, it will just support until the new government takes office on January 20.
(2) Recent two severe leverage clean-ups have restored the market to a healthy state.
At 6:28 AM on December 6, Bitcoin dipped to around 90,500, with leveraged longs exploding at around 102,000; at 5:10 AM on December 10, Bitcoin dipped to around 94,000, causing altcoin leverages to explode. The market has now recovered from a state of frenzy to a healthy state, with the funding rate for long positions in Bitcoin dropping from over 100% to around 10%.
(3) Recommendations for cryptocurrencies on Alipay's homepage! The homepage of Alipay in mainland China is recommending cryptocurrencies! This fund is named Huabao Overseas Technology C (QDII-FOF-LOF), but currently, there is a limit, with a maximum daily investment of 1,000 yuan. The investment targets mainly Coinbase stocks and Bitcoin ETFs.
The work we need to do in the upcoming bull market:
(1) Protect profits on Bitcoin and altcoin positions when prices stagnate but market leverage rises sharply; this requires profit protection on Bitcoin and altcoin positions (the recent wave of leverage killing Bitcoin, and another wave killing altcoins is particularly evident).
(2) In a bull market, do not chase shorts and try to avoid shorting.
Every time the market drops for a day or two, I hear many people lamenting that the bull market is over, that the bull has left, and speculating about drops to 80k or 70k. I can’t even remember how many times I’ve refuted this. Just yesterday, I saw many bloggers speculating on black swans, suggesting the market could hit 5.19, etc. I am at a loss for words.
In the coming year, buying on dips will be the main focus; do not let shorting become your main focus, or a major upward wave will completely bury you. 100k is the biggest threshold recently; if it stabilizes here, it will lead to a rise to 50k and 50k points. Even if it moves to a 3-5 day line or weekly adjustment cycle in the future, the pullback space will only account for about 38% of the rise.
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