BTC today is on a harmonious path. Can altcoins rebound?


Currently, the thinking is very clear!



Now the entire network is waiting to see if there will be one last drop before Christmas, leading to a second bottom appearance.


From the current daily view, it is indeed still contracting, without forming conditions for a rebound.

Therefore, regardless, there may be a second bottom appearance in a short time.


Still, it hasn't appeared yet.


So the next probability is a downward trend, with high volatility and downward movement.


Since the main trend in the range is still bearish, it is prudent to act accordingly.


However, today, at a smaller scale, the trend is about to form a W bottom.


Then, I decisively led the fans to make a long trade.



The upper pressure is in the 98000 range.


A short position can be placed.


So what should we do in the altcoin market?

1. Federal Reserve Policies Triggering Volatility in the Crypto Market


Due to ongoing inflation, the Federal Reserve currently expects to cut interest rates twice in 2025. The hawkish FOMC has caused significant declines across all risk assets, with meme coins and altcoins suffering particularly. Altcoins often require a large influx of liquidity to experience a general rise, as most of these coins lack ecosystems, and venture capital firms continuously unlock their holdings, resulting in a high fully diluted valuation (FDV). Only a major liquidity influx can potentially drive up prices. With the expectation of rate cuts significantly weakening next year, and institutions predominantly favoring Bitcoin, Bitcoin experiences only a slight decline, while altcoins plummet. Although the immediate cause appears to be the Federal Reserve's hawkish interest rate measures, the fundamental reason for the large drop lies in the market's excessive bullish sentiment. Since Trump's campaign, risk assets (especially BTC) have experienced a significant one-sided rise, making the market extremely fragile, where any shock could trigger turmoil.

2. Market Sentiment and Contract Liquidation Phenomenon


I believe that the two issues mentioned above are only temporary, and the market should be able to digest them after some time. Additionally, there is an important factor: the overly strong bullish sentiment in the market recently. Whether it is Bitcoin, Ethereum, or altcoins, they have all been rising without substantial corrections. This has led many contract traders to continuously open long positions during the bullish trend, even increasing their positions. The result has been a massive liquidation of long contracts over the past seven days, reaching a peak in the last two days! (Here, I remind everyone to respect the market and stay away from contracts at all times!)


Currently, it is the Christmas holiday period, and the 2024 fiscal year is coming to an end, with traders taking vacations, making it highly unlikely for significant market fluctuations during this time. For now, we can only wait for the market to find its bottom or for a large-scale deleveraging event to occur. In any case, we cannot expect the Federal Reserve to release USD liquidity in the short term, so waiting is currently the wisest strategy.

4. Classification of Altcoins and Key Selection Points

(1) Exceptional Altcoins


Exceptional altcoins like ETH, XRP, ADA, BNB, SOL, INJ, DOGE, SHIB, PEPE, etc., have their token values shaped by various factors including human influence, market conditions, and technology. As long as the market makers maintain control and weave interesting stories, they can exchange the coins in their hands for real money from investors. These projects are top-level in storytelling, concepts, technology, resources, funding, and exchange listings, possessing the strength to cross multiple cycles.

(2) Mainstream Altcoins


Mainstream altcoins such as AVAX, NEAR, UNI, AXS, SAND, CRV, etc., are slightly inferior compared to exceptional altcoins. They may lack in storytelling, resources are not perfect, and they lack unique selling points. While the market makers have certain strengths, they often need to lower prices to profit when selling off. Whether they can rise again depends on their ability to uncover new stories and regain investor interest.

(3) Commonalities of Two Types of Altcoins and Investor Considerations


The market makers behind exceptional altcoins and mainstream altcoins have a better grasp of price and market capitalization, with relatively strong industry resources. However, they ultimately aim for profit. Although these two types of altcoins can cross multiple cycles, investors must not blindly follow the crowd (FOMO). Their methods of profiting at the expense of others are similar to BTC, although the duration of high-level fluctuations may not match BTC, they will still leave enough time for investors to sell off. The examples listed here are typical coins from past cycles, and friends can explore new coins that may be able to join these two categories in the new cycle. Overall, older coins still present profit opportunities, but their increases may not match those of new coins. Moreover, if a category is no longer speculated upon and exits the historical stage, then profit expectations may be limited unless there is a new growth story.

(4) Sub-Mainstream Altcoins and Junk Altcoins


From the K-line trend, one can have a general understanding of sub-mainstream altcoins and junk altcoins (no examples will be provided here). Such projects may struggle to list even on the top five mainstream exchanges like Binance, and can at most only be listed on one exchange, or may not even make it to second-tier exchanges, relying solely on on-chain trading. This includes those so-called 'leaders' in market fringe areas, which, although they may have the luck to land on major exchanges, peak immediately upon opening, lacking any real potential, and purely exist to profit at the expense of others. Investors should definitely take profits when trading these types of coins; they must not become overly attached to them.


Friends can compare similar projects in the same category. Generally, leading coins have more advantages, and there are often multiple leaders in the same category, such as DOGE and SHIB. The key lies in the choice of the category; enduring categories include public chains and MEME, as well as new popular categories like AI, Depin, RWA, etc. Judging whether a coin can become an exceptional or mainstream altcoin in the next cycle can be based on continuous attention to relevant dynamics.