Woke up to a steep drop! I dare not open my eyes, hoping it's just my illusion.
After Bitcoin broke through $108,400, it began a sustained decline. I mentioned in yesterday's recap that a brief surge replaced the sideways consolidation. Although the market may attract funds to pull prices up, we must also be wary of a potential pullback at any time.
In fact, as long as there is no plummet, short-term pullbacks are beneficial for the long-term development of the bull market; after all, some profitable investors will choose to realize profits. If the drops in these days lead to your liquidation, you need to seriously reflect on your trading strategy.
If you can't learn from the liquidation, you may encounter the same situation in the future. Additionally, I warned yesterday that it’s not very suitable to open contracts at the current price levels. So, how the market will move next, when it will stop dropping, and what the initial signals will be, we can discuss together.
In terms of Bitcoin, there hasn't been much change in the fundamentals. Yesterday, the 'understanding king' called for a favorable development, and institutions continue to accumulate. It is expected that Bitcoin may consolidate around $100,000 for a while, but in the long run, the outlook remains bullish. The current decline has not seen significant volume, and can be viewed as consolidation. If there is an opportunity to drop below $100,000, one can buy in batches, with a target seeing it all the way to $85,000.
For BNB, it is expected to fluctuate around $700, suitable for grid trading.
Regarding Ethereum, the pullback is driven by Bitcoin, which is not surprising. As long as there are no major issues with Bitcoin, Ethereum (ETH) should gradually rise. Below $3,700 is actually a very suitable position for long-term investment; when the price returns above $4,000, conservative investors can consider selling part and wait for a pullback.
As for Dogecoin (DOGE), as previously mentioned, as long as Musk doesn't say anything, it will continue to decline. It is difficult to operate in the short term due to human factors, but there may be an upward opportunity in January.
Returning to today's Bitcoin (BTC) market analysis: From the candlestick chart, the trends on the 1-hour, 4-hour, 12-hour, and daily levels are all downward. Today's resistance level is $103,000, and the support level is $97,500.
Perhaps starting today is a good time to bottom-fish strong altcoins! Why do I say this?
When Bitcoin rises, altcoins fall; when Bitcoin falls, altcoins suffer even more! This is the true portrayal of the market in recent days:
Now even newly listed junk coins can instantly lose 50% or more; the entire crypto circle feels like a slaughterhouse for capitalists. If you enter the market, you’re likely to get cut.
Altcoins feel like a sacrifice to the heavens; I don’t know which one to trust anymore, and confidence is dwindling. It feels meaningless. Buy a little, lose a little; playing with risk is just part of the process, losing money is the result.
Now, truly high-quality altcoins are really scarce; they surge for a few days when the market is good, and then they cool down.
Of course, friends with different thoughts can also take their time to bottom-fish. They can use a strategy of buying big on large drops, small on small drops, and not buying when there's no drop to pick up low-priced chips, laying in wait for projects with long-term narratives. However, it’s important to control the position well and leave some funds to deal with the Christmas pullback.
This market trend is fundamentally different from the previous bull markets!
Everyone must not compare the current market to the bull markets of 2017 and 2021.
Although I mentioned at the beginning of August that the altcoin market might take off, many altcoins are actually like the Tyndall effect, looking shiny but actually just bubbles.
Large funds haven't really entered the market; retail investors are being attracted more, and the washout cycle is long. Many old coins still have strong narrative support.
So, here's the key point - the bull market cycle is still ongoing, and the washout is actually an opportunity; the only question is how long this washout will last, which no one can foresee.
In the future, those altcoins that have already risen significantly should basically not be touched.
The real opportunity lies in those new coins that are still in FUD in the market. As long as this washout is severe enough, and the daily chart stabilizes to show sideways movement, we can consider entering the market, with at least a chance of doubling.
However, the key directions remain L1, RWA, and AI.
Then, I want to emphasize that the bull market is not over yet, so don't rush to make decisions, and stay calm!
The logic of this cycle is actually quite simple: Bitcoin is advancing steadily.
Altcoins will have phase-based trends, rising and falling waves. Each time a large altcoin rises, it’s usually one that didn’t rise much in the previous wave.
Specifically, retail investors have been thoroughly washed out, the weekly candlestick chart is stable, and there is strong narrative support.
Therefore, during this wave, continue to pick up low-priced chips, maintain calm, and wait for the final wave of madness in next year's bull market.
The last madness of the bull market is indeed the craziest time!
Looking back at the altcoin season from 24 years ago, there are indeed some obvious characteristics that deserve our reflection:
1. The correlation between BTC and ETH is becoming weaker.
In the past, during altcoin seasons, when BTC rose, ETH would closely follow, often driving many altcoins to rise as well. Some strong coins would even surge tenfold before ETH. But now, after BTC rises, ETH often just 'lies flat'; this change seems to have become the norm, and the correlation is not as strong as before.
2. The disappearance of sector rotation
The bull market of 2021 is still fresh in people's memories, with major sectors rising in turn, such as public chains, DAOs, NFTs, and so on, making dazzling profits. Even in the 2023 market, sectors like L2 and AI once experienced explosive growth. However, now, the sector effects are not as pronounced as before; occasionally, some concept coins perform well, but it’s hard to see the overall rotation that was seen back then.
3. The classic rising pattern of altcoins
In the past, the upward trend of altcoins was relatively clear, basically cycling through three patterns back and forth:
1. Small incremental rises, not daring to chase, and fearing a pullback once I do chase;
2. Instant surges and crashes, going up crazily when rising, and crashing by 30%-50% when falling, then quickly rebounding; leveraged players are in dire straits.
3. 'Zigzag' market, rising for a few days and then dropping for a few days, repeatedly washing out, testing the patience of holdings.
The question arises: in the current altcoin season, can the characteristics of those 'old times' be recreated? Which model do you favor?
It feels like there’s not much to say about this market anymore; let’s summarize the key points tonight:
1. Bitcoin has no space, so it may be best to choose not to operate and continue adjusting.
2. The four-hour line of Ethereum shows signs of bottoming, and I personally firmly believe in a rebound, after all, Bitcoin has already flowed back to Ethereum.
3. Analysts say: Now is the time for Ethereum to reach new highs, while Bitcoin may be entering the 'Santa Claus mode'.
4. Retail investors are selling ETH out of panic, while Wall Street is continuously buying in.
5. MicroStrategy's one-month ban on selling has paused BTC purchases on exchanges (this is considered a negative).
6. Bian announced today that it will delist BLZ, which directly plunged by 40%, but in the first half of the bull market, it still rose sevenfold. The risk of altcoins is truly too high.
7. USUAL coins are truly amazing, rising all the way; it’s worth researching. Strong coins should be bought, while weak coins should not be touched; during pullbacks, some allocation can be considered.
8. He Yi said: Most Meme coins will eventually go to zero, and Bian will also put hundreds of hot projects into the Alpha observation zone.
Finally, I sincerely wish everyone can make more money; the New Year is not far away, and I hope everyone has a good year! The crypto circle is always a place of risks and opportunities, and I hope everyone can seize the opportunities!