Good evening, brothers. Bitcoin recently set a historical new high in November, welcoming a significant price increase. However, with the continuous rise in coin prices, the market has shown obvious signs of divergence. The two most striking phenomena are: on one hand, Wall Street institutions, particularly MSTR, are frantically buying, having purchased $12 billion worth of Bitcoin in a short period; on the other hand, long-term investors who have held Bitcoin for over six months are quietly selling, averaging 25,600 Bitcoins per day.
This seemingly contradictory market behavior has attracted attention and discussion from many. After all, the sell-off by long-term holders may affect the stability of the market, especially as their selling speed far exceeds the buying volume of institutions. One can't help but wonder: does this mean that the price of Bitcoin will face a correction?
Historically, the last time such a divergence occurred was 5 months ago when the price of Bitcoin corrected from a high of $73,700 to $49,000, and the period of fluctuation lasted quite a while. Therefore, the market is also worried that this time might repeat the last situation and enter a period of adjustment.
Why have the old altcoins recently started to rise together? Has the effect of speculating on new coins instead of old ones failed?
Mainly due to favorable policies from Trump.
He hopes to eliminate all capital gains taxes on cryptocurrencies issued by American companies.
This means that profits obtained by Americans holding crypto assets such as ADA, ALGO, XRP, HBAR, etc., will be completely tax-free, as the creators of these coins are American companies.
At Coinbase, the spot trading volume leader is actually XRP, whose trading volume equals the sum of BTC, ETH, and DOGE, which indicates that the FOMO sentiment among American investors has kicked in.
XRP's market capitalization has also reached a new high, returning to the top three, and it plans to issue new stablecoins.
The trading volume of XLM's Stellar coin has also surpassed SOL. XLM is an old project launched in 2014, which had dropped 90% over the past four years, but has quickly returned to historical highs in the last three weeks.
Based on the current trend, as Ethereum rises, funds are starting to flow into altcoins on exchanges. Those who previously held altcoin projects should not easily switch positions, as there is a high probability of a rotational market.
The reason there was no altcoin season before was the lack of new funds in the market, but with the Federal Reserve continuously lowering interest rates, the incremental funds in the market are gradually increasing.
Although many exchanges have junk coins, they can still be picked up and speculated on.
However, there are methods to pick these projects.
Currently, the best speculative targets are two types: newly launched meme coins and some old coins that are becoming active again.
Recently, the coins that have risen sharply are also the old coins from 2017 and this year's new meme coins, as they have the least supply pressure.
In the face of a dazzling market, there are often two common operating methods:
Monitoring the market daily, ultimately chasing prices
This operating method usually leads to 'the more you see, the more anxious you become,' especially when seeing the prices of major coins like Bitcoin rising continuously, some investors may become impatient and ultimately choose to chase the price. However, the biggest problem with chasing prices is that your buying cost will keep increasing, and the risks will correspondingly increase.
Coin exchange operation, pursuing low prices
Another method is to keep an eye on those coins that are rising relatively slowly, believing they have room to increase, and preparing to buy at low prices. However, this operation also carries significant risks. Those slow-rising coins may have their reasons for weakness, and after purchase, they may not see an increase for a long time, or even face price corrections. Meanwhile, those popular coins you sold may see explosive increases shortly after.
The common point of these two operating methods is that the buying cost for investors is constantly increasing. Through this frequent operation, although it may seem that some profits have been gained in the short term, in the end, one may find that their investment cost is getting higher, and the altcoins held are likely to be in a high-cost position when the bull market ends.
Upcoming market volatility
As we enter a new month, there are some key points in the market that need attention:
Price trend of ETH
Ethereum's price has recently seen a steep increase. While a temporary consolidation is a good phenomenon that is conducive to further increases, both support and resistance levels are very important. The short-term support level is at $3,570, while the resistance level is at $3,730.
Rebound of altcoins
With Ethereum leading the way, altcoins have also seen a rebound. However, this rebound may only be short-term, and there is a risk of slight adjustments in the market.
Release of important economic data
Non-farm payroll data will be released on November 5, CPI (Consumer Price Index) will be announced on November 11, and there is the Christmas holiday at the end of the month. These major events could bring significant volatility to the market, and investors need to stay vigilant.
