When it rains, it pours. On the morning of January 9, during a market downturn, major cryptocurrency media reported a piece of negative news that the 'U.S. Department of Justice approved the sale of $6.5 billion worth of Bitcoin seized from the Silk Road.' Upon this news, Bitcoin fell sharply, briefly dropping below $93,000. As of the time of writing, the price has warmed up to around $93,500.
The minutes from today's Federal Reserve meeting further indicate that officials are generally willing to keep interest rates unchanged at the meeting scheduled for the end of this month. As a result, the market adjusted its expectations for the Fed's future monetary policy, putting pressure on risk assets and causing them to decline.
Critical moment: The market's point of contention has emerged!
This wave of decline has also brought Bitcoin's price back to the lower edge of its consolidation range since the end of November last year. However, Bitcoin is still expected to rebound from the lows in the short term and may continue to oscillate within the range until the selling pressure is fully digested, after which it may have the opportunity to reach new highs.
U.S. stocks are closed today, but the bond market is open, which seems to be a first in history. Moreover, non-farm payroll data will be announced on Friday, and the fate of the market in the short term is tied to this data.
Even though the current market situation is tough, believe that something big is on the way! The correction is just a temporary breather; Trump's inauguration on January 20 will bring optimism to the market, and this good news is here, with the market likely to ignite a new wave of upward momentum.
What is important now is to pay attention to the U.S. non-farm payroll data to be released on Friday, which will be a key catalyst affecting Bitcoin's trend. If the data is poor and the unemployment rate rises, that would be unfavorable. However, if the unemployment rate rises while employment still increases, that would be more favorable and might lead the Fed to consider cutting interest rates. The current decline may be a market reaction to expectations ahead of the non-farm data release.
Will there be another big drop?
I don't think so. The impact of macroeconomic conditions has temporarily taken away Bitcoin's upward momentum. It should have been a time for speculation, but two economic data released by the U.S. exceeded expectations, leading to a collective correction in the U.S. stock and crypto markets. The non-farm data this Friday may also exceed expectations, which will affect the market trend. This decline has actually preemptively reacted to these factors.
Currently, Bitcoin is in a stalemate state, with the overall trend being relatively weak, but it remains above the support level of $92,000, undergoing consolidation and oscillation to digest pressure. In summary, it is expected to fluctuate between $92,800 and $100,500. The prices of altcoins are also affected, with many altcoins having already experienced significant declines.
What do altcoins look like at this stage? What can retail investors still buy?
Since Bitcoin's market cap share peaked at 60% and started to decline, the daily trading volume of altcoins (excluding the top ten by market cap) has long maintained a share of over 40%, remaining dominant. The perception of a dull altcoin market is due to the daily trading volume dropping sharply from $300 billion to $150 billion, which has led to a situation where there are more participants than opportunities. In this environment of reduced trading, capital is mainly breaking out in two directions: one is to concentrate on strong trending coins like SUI, AAVE, XRP, etc.; the other is to cluster around hot topics for speculation, such as AI Agent, DeSci, RWA, etc.
Since the market bottomed on December 20, the AI Agent has undoubtedly become the hottest topic in the market. More than half of the gainers are related to AI Agent. The two star projects of AI Agent, Ai16z and Virtual, have also undoubtedly become some of the strongest tokens in terms of capital attraction by December 2024. Since capital has deeply engaged in this field, the AI Agent market is likely to continue for several months. To achieve considerable excess returns, one still needs to closely follow market hotspots.
Of course, chasing highs in Ai16z and Virtual is obviously not the best choice for participating in AI Agent right now. On the contrary, for those who are stable, second-tier projects that have fully adjusted, such as ACT, GOAT, are more likely to yield trading opportunities.
In the operation of altcoins, opportunities mainly depend on individual risk preferences and expected benefits.
For stable investors, Ethereum, SOL, and the platform tokens of leading exchanges still have a high safety margin, as current valuations and growth prospects are quite good. At the same time, most leading projects in various sub-sectors have provided good entry opportunities during the correction, such as UNI, LINK, AAVE, SSV in the DeFi sector.
Finally, I want to say that the big trend is still there, and there is no need to panic and cut losses. The Silk Road selling coins, Trump's remarks, and expectations for interest rate cuts are all just bumps on the way to 130,000 and 150,000. Invest with a long-term mindset, and no one can force you to sell! Believe in this: everything that happens is for my benefit. This is how I have lived through the years. Don't panic!