Hello everyone
I am Yudong
At the end of each year, the crypto community will look forward to the so-called "Christmas market", that is, with the improvement of holiday fund liquidity and market sentiment, mainstream cryptocurrencies such as Bitcoin will usher in a year-end rise. However, compared with the data of the past few years, this year's market performance may force people to re-examine this long-awaited market.
"Christmas Quotes" Throughout History
1. The peak of the bull market in 2017:
After reaching an all-time high of nearly $20,000 on December 17, Bitcoin began to pull back sharply. It saw a short-lived rebound a few days before Christmas, but ultimately continued to fall and failed to form a "Christmas market" trend.
2. 2020 Bull Market:
The Christmas of the bull market was very strong, with Bitcoin skyrocketing from $19,000 at the beginning of December to $28,000 after Christmas, directly kicking off the 2021 bull market.
3. 2022 Bear Market:
During the Christmas period, Bitcoin's price fluctuated around $16,000 without forming a clear upward trend. Market sentiment was sluggish, liquidity was insufficient, and investors were more in a wait-and-see state.
Current Market Possibilities for the Christmas Rally
1. Market Adjustment Status:
Recently, Bitcoin has pulled back from a high of $105,000 to $90,500. This adjustment, while seemingly fierce, shows through on-chain data that a large amount of BTC is being absorbed at the key support level of $97,500, indicating that bulls are still making efforts to defend. The market remains in a bull cycle, although bullish sentiment appears slightly fatigued during this adjustment period.
2. Macroeconomic Factors:
The Federal Reserve's hawkish stance in December has raised concerns about tightening liquidity at the end of the year. The strong rise of the US Dollar Index (DXY) has directly pressured the cryptocurrency market. In this environment, the market's risk appetite decreases, which may weaken the explosive potential of the 'Christmas Rally'.
3. Market Sentiment and Fund Flow:
Data shows that liquidity tends to be low before Christmas, especially as institutional investors in North America and Europe gradually enter holiday mode, leading to a market dominated by retail investors. If there are no significant positive news (such as ETF approval or large institutional purchases), the market is more likely to show sideways fluctuations or short-term volatility.
Given the current situation, the three major possibilities for the Christmas market
1. Dominated by Fluctuations:
Due to the recent rapid adjustment of the market, it still requires time to restore sentiment. Therefore, during the Christmas period, Bitcoin may fluctuate in the range of $95,000 to $105,000, lacking the momentum for a substantial breakout.
2. Altcoins May Take Center Stage:
In the past few major market adjustments, funds often flow from Bitcoin to altcoins. If altcoins are active during the Christmas period, it may bring about a 'localized Christmas rally', especially for strong coins like Ethereum (ETH) and Solana (SOL).
3. Positive News Triggers Upward Movement:
If an ETF is approved or other significant institutional investments occur, a Christmas rally is still possible. Especially since the bullish sentiment from this year's bull market remains, 'fund-driven increases' could still be a potential driving force.
In the short term, although the market tends to fluctuate, the bottom support is quite strong. It is advised that conservative investors focus on phased investments, paying attention to buying opportunities at the critical support level of Bitcoin at $97,500. Additionally, continue to buy on dips for ETH and SOL. At the same time, keep an eye on altcoins with strong fundamentals to capture potential localized rallies. However, remember to remain rational and avoid chasing highs and selling lows.
What do you think about this year's Christmas market? Feel free to like and discuss!