At the beginning of each month, the crypto circle usually experiences a pullback. Bitcoin is currently testing the support point around 95k. If it holds, it may continue to push towards six figures; if it fails, it may dip down to the 90,000 threshold to look for support.
So will the market in December follow past patterns of pullback followed by a surge, or will it undergo a thorough cleaning, ushering in real big fluctuations? Let's analyze:
1. Short-term Outlook for Bitcoin
From the current market pattern, Bitcoin's market cap proportion still has a certain downward space, which also means that altcoins may welcome a wave of catch-up. The decline in market cap proportion usually indicates that funds will flow to other crypto assets, especially smaller-cap altcoins, providing opportunities for altcoin investors.
In December, important economic data has been released, including ADP employment data, non-farm payroll data, CPI, interest rate decisions, etc. These factors may have a significant impact on market sentiment. In addition, whether Microsoft will include Bitcoin in its corporate reserve assets will also be revealed this month. If approved, this will further increase market buying power, but it may also lead to increased market volatility.
2. The Prospects of Ethereum
Last Friday, Ethereum's ETF product achieved a historic breakthrough, with a single-day inflow of over 330 million USD, surpassing Bitcoin's inflows for the first time, marking an important milestone in crypto market history. Ethereum's price also briefly rose to 3760 USD; although this increase is relatively small, it still indicates that Ethereum is entering a phase of slight catch-up.
Currently, Ethereum's price is still a certain distance from its annual high (3977 USD) and historical high (4800 USD), especially compared to Bitcoin, which means Ethereum still has a very broad upward space. With Ethereum's further strong rebound, it is expected that the prices of some altcoins will also be driven up, entering a new rising cycle.
3. The Market of Altcoins
Against the backdrop of Bitcoin's consolidation, the altcoin market seems to be quietly gaining strength. The valuation ceiling of the altcoin market has been opened, especially for established altcoins like XRP, whose market cap has surpassed SOL, rising to third place and becoming the market focus. This change has made many people start to pay attention to the potential of altcoins, especially those smaller-cap projects with potential.
For example, some old projects that had been forgotten by the market recently, such as EOS, FIL, Theta, and LTC, have all welcomed a strong rebound. Even for these large-cap projects, the rebound from the bottom has reached up to 4 times, while smaller-cap altcoins may see 10 times or even higher increases.
As these old projects gradually regain vitality, more altcoin tracks are expected to explode. Investors can focus on the following important tracks and projects:
Meme Track: Pepe, Doge, Shiba, Pnut, Chillguy, etc.;
DeFi Track: UNI, AAVE, LINK, CRV, ENS, etc.;
Public Chain Track: SOL, Sui, ALGO, etc.
4. Investment Strategies and Risk Management
When Ethereum enters a slow oscillation and upward phase, investors should pay more attention to finding altcoins with anti-dip characteristics, entering the market in batches, in order to achieve higher returns when Ethereum's market explodes in the future. Meanwhile, the investment risk in altcoins is relatively high, so maintaining good risk management is very important to avoid over-concentrating investments in a single project or excessively chasing price increases.
In summary, the crypto market in December may experience a wave of relatively intense fluctuations, but for investors with a forward-looking layout, the upward opportunities for altcoins may be more attractive. In the upcoming market, focus on those smaller-cap projects with great potential, as well as leading coins in related tracks, and rationally diversify investments, which may bring higher returns.
