The definitions of bull and bear markets have never been standardized, but there is definitely a standard cycle of sentiment. It climbs amidst doubt, oscillates amidst hesitation, retail investors enter during the euphoric surges, and it ends with FOMO across the entire sector! Right now, we are at best still oscillating in hesitation, with those who haven't entered worried about a drop, and those who have entered concerned about when to sell amidst market hesitation.
If we exclude Bitcoin’s annual increase, we find that the current market sentiment aligns more closely with this cycle. Bitcoin has become a plaything for institutions, while the participation space for retail investors has been drastically compressed. The altcoin market, led by Ethereum, can, to some extent, be more closely aligned with the market sentiment of previous cycles.
In the past 24 hours, Bitcoin has retraced from above 100,000 to around 94,000, briefly dipping below the 95,000 first support level before bouncing back. The total volume of liquidations exceeded 1.7 billion USD, with over 500,000 people liquidated in the market. Once again, the crypto market led by Bitcoin executed a perfect midnight raid. Altcoins have changed from the weak correlation of the previous quarter to a collective drop of over 10%, successfully flipping the first wave of profit-taking.
On the data front, Bitcoin spot ETF saw a net inflow of 484 million USD yesterday, and Ethereum spot ETF saw a net inflow of 153 million USD, achieving 12 consecutive trading days of net inflow. Thus, the widespread drop in altcoins driven by this round of Bitcoin adjustments has no essential connection to macro data, and the off-market sentiment still remains optimistic.
Additionally, we noted that before this morning’s significant drop, the entire network had a uniform positive rate, and after the drop, the first update saw half the rates turn negative. This wave of bullish sentiment has swept through. The top divergence in technical analysis has also seen necessary correction, and looking at the overall situation, the probability of the crypto market, led by Bitcoin, transitioning from bull to bear is still very low.
However, the objective situation on the data front does not support an immediate rebound in response to the new round of upward movement. On-chain funds have shown a significant decline in activity after the meme craze subsided, and there have been no signs of a golden pit or extreme panic selling. The upcoming trend is likely to be characterized by slow rises and sharp drops until it creates a sense of market termination, leading many to consider selling during peaks before a new explosive rally begins.
If we must give an adjustment range, Bitcoin is likely to find strong support at 91,000, with the 100,000 level serving as resistance. It will oscillate back and forth, with Ethereum following weakly. After the adjustment ends, Ethereum will likely start the rally first, while altcoins will remain sluggish for a few more days.
I have indeed been busy lately, and I haven’t moved many of the positions I previously set up. In the last article, I mentioned Bitcoin's midnight raid, and the plot has replayed in under three days, basically mirroring the spike patterns from the previous cycle. That said, I must remind everyone: if you claim the bull market is over and clear out just because of this slight drop, such KOLs should really be blacklisted.
In trading, one can remind everyone to phase out at high levels due to a prediction of a market drop, and then re-enter at lower levels, or use technical indicators or on-chain data to determine that there is currently no explosive market, choosing to exit temporarily. However, one must absolutely not draw unfounded conclusions based on a single market movement. This is typical sensationalism, and it's the kind of sentiment that lacks substance; aside from attracting attention, trading will certainly be a mess.
SomeAn announced today that it is delisting the inscription section of its wallet, which clearly has a negative impact on the market for inscriptions in the short term. Personally, I believe there should be no specific relationship between the delisting of its wallet section and the specific inscriptions. The trading volume of the inscription market has already fallen below 5% of its peak period, and there are no new minted inscriptions that have managed to break out. It should be supported that Bitcoin consumption that lacks value is no longer sustained.
Then, regarding the market's negative sentiment towards inscriptions caused by SomeAn's delisting, I also want to ask everyone: what has SomeAn contributed to the inscriptions? Or what indelible contribution has it made to the inscription ecosystem? Shouldn't the greatness of inscriptions come from the success of Ordi breaking out? And shouldn't the breakout of Ordi come from every supporter of the Bitcoin ecosystem with consensus?
The intraday fear index is at 78, not much different from the previous days. What I've gathered is that major players are quiet, while retail investors are scared, especially those heavily invested in altcoins. Today’s drop allowed me to increase my position by 20%, basically replenishing previous old positions, and I expect to see another wave soon. In the short term, there is indeed some risk in bottom-fishing, but if it drops and you don’t buy in, you won’t have time to watch the market; without fear, it’s still confirmed that we are in the early stages of a bull market!
BTC: Bitcoin's trend is basically consistent with last Friday's sudden drop, both showing a strong liquidation of leverage. The difference is that this wave of altcoins has followed suit, and the extent has been significant. The market's oscillation adjustment period will last until after Christmas, with Western on-chain retail funds gradually offloading. The weekly trend for Bitcoin is also downward, following a pattern of rebounding and declining. Therefore, operations like this have some maneuverability but little space; those who handle technicals well with high sells and low buys should be able to achieve decent results. For retail investors, those who have Bitcoin will definitely not sell, and those who don’t wouldn’t buy in even if it dropped another ten thousand points. The altcoin market will continue to correlate.
ETH: Ethereum's breakthrough trend has once again faltered. Yesterday, while studying on-chain data, I noticed that the volatility of selling pressure around four thousand was particularly high, instantly recalling the highs after ETH passed this level, which has become a pain point for many. Objectively, Ethereum definitely has the foundation and demand for new highs. The necessity of washing out the players who were stuck around four thousand for six months is significant, greatly enhancing the foundation for the next round of highs. Let’s view it optimistically; today I added a bit of ETH, marking my first increase in Ethereum in a year.
Altcoins: The proportion of profits held within altcoins dropping to cost is not large at the moment. Judging by entry positions and the intraday market situation, the overall situation is still okay. For old mainstream coins, I personally feel the trend is not over yet. Under the current conservative viewpoint, one can allocate an additional third of the reserved funds for replenishment. The market won’t bottom when everyone thinks it has, nor will it bottom when everyone believes they can buy the dip. People are always late to react. However, technically, most sectors of the altcoin market that previously performed well may experience another sharp drop before a broad rally. Entering the market at this position may be relatively safe, but of course, those who can brave the storm belong to the top echelon of the industry. Everyone should think critically based on their mindset and circumstances.
Other altcoins, discussion in the comments.
The fear and greed index is at 84 for the day.
Finally, stay away from leverage and stock up on spot assets!
