At the beginning of each month, there is usually a pullback in the coin circle. Bitcoin is currently testing the support point near 95k. If it holds, it may continue to challenge the six-figure mark; if it doesn’t hold, it may drop to the 90,000 threshold and continue to seek support.
So will the market in December follow the usual pattern of pulling back and then rising again, or will it undergo a thorough cleansing, welcoming a real big fluctuation? Let's analyze:
I. Short-term outlook for Bitcoin
From the current market pattern, Bitcoin's market cap still has some downward space, which also means that altcoins may welcome a wave of catch-up rally. The decline in market cap share usually means that funds will flow to other crypto assets, especially smaller altcoins, providing opportunities for altcoin investors.
In December, important economic data has been gradually released, including ADP employment data, non-farm payroll data, CPI, interest rate decisions, etc. These factors may significantly impact market sentiment. In addition, Microsoft's decision on whether to include Bitcoin in its corporate reserve assets will also be revealed this month. If approved, it will further increase buying power in the market, but may also lead to increased market volatility.
II. The prospects of Ethereum
Last Friday, Ethereum's ETF product achieved a historic breakthrough, with daily fund inflow exceeding $330 million, surpassing Bitcoin's inflow for the first time, marking an important milestone in crypto market history. The price of Ethereum also briefly rose to $3,760, and although this increase is relatively small, it still indicates that Ethereum is entering a small catch-up rally.
Currently, the price of Ethereum is still a certain distance from its annual high (3977 USD) and historical high (4800 USD), especially compared to Bitcoin, Ethereum's upward space is still very broad. With Ethereum's further strong rebound, it is expected that the prices of some altcoins will also be driven, entering a new upward cycle.
III. The trend of altcoins
Against the backdrop of Bitcoin's turbulent consolidation, the altcoin market seems to be quietly gaining momentum. 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 led many to start paying attention to the potential of altcoins, particularly those with smaller market caps but high potential.
For example, recently some old projects that were forgotten by the market, such as EOS, FIL, Theta, and LTC, have welcomed a strong rebound. Even for these large-market-cap projects, the bottom rebound has reached up to 4 times, while those smaller market cap altcoins may see increases of 10 times or even higher.
As these old projects gradually regain vitality, more altcoin tracks are expected to explode. Investors can pay attention to the following important tracks and projects:
Meme tracks: Pepe, Doge, Shiba, Pnut, Chillguy, etc.;
DeFi tracks: UNI, AAVE, LINK, CRV, ENS, etc.;
Public chain tracks: SOL, Sui, ALGO, etc.
IV. Investment strategies and risk management
As Ethereum enters a slow upward fluctuation stage, investors should pay more attention to finding altcoins with anti-fall characteristics, entering the market in batches, in order to obtain higher returns when Ethereum's trend explodes in the future. Meanwhile, the investment risk of altcoins is relatively high, so maintaining good risk management is very important to avoid excessive concentration of investment in a single project or chasing prices too much.
In summary, the crypto market in December may experience a more intense fluctuation, but for forward-looking investors, the rise of altcoins may be more attractive. In the upcoming market, focus on smaller market cap projects with great potential, as well as leading coins in related tracks, and reasonably diversify investments, which may bring higher returns.
