Today, the old mainstream coins have experienced a sustained rise led by XRP. The main reason may be that investors in these varieties have already been largely washed out, making the market lighter. Bitcoin is currently testing support near 95000 downwards. From the liquidation map, the 7-day support near 95000 is still quite strong, while the upper pressure is around 99000. This evening, when American institutions are back at work, it is expected to easily rally, so there is really nothing to worry about during the daytime pullback. From Bitcoin's market capitalization share, there is still some room for a drop, indicating that altcoins still have some recovery space.
In the past month, the total market capitalization of altcoins ranked outside the top 10 has doubled, while Bitcoin has risen by 50%. Simply put, if your account has not doubled in the past month, you have underperformed the average altcoin increase. If the increase is less than 50%, you have even lagged behind Bitcoin. Currently, there is a clear shift in market funds; previously, Bitcoin and meme coins were a combination, while traditional altcoins driven by the Ethereum ecosystem are now a combination. The Solana series has already surged, so it is temporarily stagnant, while the BSC series has yet to explode. In the past ten days, funds have clearly shifted from Bitcoin speculation to the Ethereum ecosystem, and funds from on-chain low-quality coins have also exited. It is currently believed that the speculation on traditional altcoins will continue.
In the past two years, Bitcoin's price has risen sixfold, but altcoins have only increased by less than three times. Considering that the funding environment is far from what it was in 2021, expectations for this round of altcoins have been greatly lowered; achieving several times return on full positions would be very satisfactory.
After this round, most people have understood the impact of the macro funding environment on altcoins. Similar to the Russell 2000 small stocks in the US stock market, only during the easing phase can the Russell 2000 significantly outperform large tech stocks, and altcoins can significantly outperform Bitcoin. Otherwise, even in a bull cycle, but under a tightening state, holding altcoins for 85% of the time can be quite painful. In the next bull-bear cycle, the macro funding environment must be considered to determine the best allocation of cryptocurrencies.
In addition to the altcoin market driven by some funds switching, there is another possibility for next year: a new batch of ETF applications being approved. Currently, the media has reported that 4 altcoins are applying for ETFs, and 2 more are in preparation. These ETF applications may serve as the foundation for the next wave of altcoin market, but the timing is estimated to be in 2025 or even later, which is the second wave of market potential that can be considered under macro conditions not easing.
Speaking of ETH, last Friday, the inflow of funds into the Ethereum ETF exceeded 330 million dollars in a single day, while the inflow for Bitcoin was only 320 million dollars on the same day. This marks the first time in human history that the Ethereum ETF has outperformed Bitcoin in a single day, and it even trended on social media. Thus, Ethereum's performance over the weekend was also quite good, with prices peaking at 3760.
The ETH/BTC exchange rate has also exceeded 0.038, which can be considered a small corrective rally; however, there is still a gap before Ethereum can truly explode. After all, Bitcoin has set new highs so many times, while Ethereum has not even returned to 3977 in May or 4093 in March of this year, and is still 1000 dollars away from the historical high of 4800, which is much further than Bitcoin's distance to 100k. It can only be said that Ethereum still has a lot of room for growth.
Why have these old altcoins surged so strongly recently?
Mainly due to favorable policies from Trump.
He hopes to eliminate all capital gains taxes on cryptocurrencies issued by American companies.
This means that Americans holding crypto assets like ADA, ALGO, XRP, and HBAR will receive profits that are completely tax-free, as the creators of these coins are American companies.
On Coinbase, XRP has surprisingly become the number one in spot trading volume, with its trading volume equal to the combined total of BTC, ETH, and DOGE, indicating that the FOMO sentiment among American investors has awakened.
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 Stellar (XLM) has also surpassed SOL. XLM is an old project launched in 2014, which had dropped by 90% over the past four years but has recently almost returned to its historical high in the past three weeks.
Looking at the current trend, with the rise of Ethereum, funds are starting to flow into altcoins on exchanges. Don't easily switch out of the altcoin projects you previously held; there is a high probability of a rotation market.
The reason there was no altcoin season before was that the market lacked new funds, but with the Fed continuing to cut interest rates, the incremental funds in the market are gradually increasing.
Although many exchange coins are trash, they can still be picked up and speculated on.
However, there are methods to pick these projects.
Currently, the best targets for speculation are two types: newly launched meme coins and some reactivated old coins.
Recently, the coins that have surged strongly include both old coins from 2017 and new meme coins from this year, as they have the least supply pressure.
In the new month, we will continue to layout, and there are several points everyone needs to pay attention to:
1. The exchange rate increase of ETH has been too steep, so a sideways movement is better for continuing to push higher. The support level to watch is 0.373, while 3730 is a strong resistance level, with support first looking at around 3570.
2. Altcoins have started to show daily and weekly rebounds along with Ethereum's leading rise, increasing the likelihood of a slight market adjustment.
3. There is a non-farm payroll report on the 5th of this month, a CPI report on the 11th, and Christmas at the end of the month, which may cause considerable volatility in the market.
