Today, Bitcoin hit a new high, reaching a peak price of $107,793. The main reason for this rise was that MicroStrategy's stock was included in the Nasdaq 100 index, and the company's CEO Michael Saylor announced another large purchase of Bitcoin.
From this point of view, MicroStrategy clearly believes that Bitcoin's breakthrough of $100,000 is just the starting point, so it continues to increase its positions. This move is obviously event-driven, but unfortunately, this momentum may not last long. If there is no new FOMO sentiment spreading, the market may experience a correction in the short term.
In terms of altcoins:
Currently, most altcoins are suppressed by Bitcoin, generally down about 10%. The entire market is still in a consolidation phase, and this fluctuation is expected to continue for 1-2 weeks. With the arrival of January, Ethereum and altcoins may explode and hit new highs.
After a large-scale liquidation and leverage clearing, the market's risk has been released, and funding rates have returned to normal. The current market shows a gradually rising bottom in a fluctuating trend. If the price retraces to the daily 20 moving average, it would be a good buying opportunity.
In the upcoming altcoin layout, two main concepts are worth noting:
The reservoir of funds overflowing from Bitcoin: namely ETH, XRP, etc.
Projects supported by President Trump: such as Defi, U.S. projects, compliance concepts like LINK, AAVE, ENA, ONDO, etc., closely monitor Trump's wallet movements.
Market focus this week:
This week is the last super central bank week of 2024, with a focus on interest rate decisions from the U.S. and Japan:
On the U.S. side: The interest rate decision will be announced at 3 AM on Thursday. Last week's CPI data met expectations, and a 25 basis point rate cut is almost a certainty, with the CME probability reaching 97%. This means that U.S. stocks and the crypto market have fully priced in this rate cut, so this positive news will have limited impact on the market. The focus on Thursday will shift to Powell's speech and the outlook for the January 2024 FOMC. CME predicts an 80% probability of maintaining interest rates in January, which will be a key point of market attention.
On the Japanese side: The market generally expects that Japan will not raise interest rates in December, which is a comfort to the market. If Japan raises interest rates, although the impact is small, it may trigger market unease, especially when combined with the negative effects of Federal Reserve policy. However, if Powell emphasizes that the U.S. economy is too strong to cut rates, it may bring some positive effects to the market, avoiding recession expectations.
In the short term, if the market digests the expectation of no interest rate cut, a price increase is still possible, as the overall trend remains positive.
When will altcoins experience a rebound?
Despite Bitcoin hitting new highs, most altcoins are currently in a correction phase, especially those on centralized exchanges, which are almost all down. Although the total market cap of the crypto market has surpassed $3.9 trillion, setting a new high, most of the growth comes from Bitcoin's contributions, and the market share of altcoins continues to decline.
Although ETH has performed relatively well, the ETH/BTC exchange rate is still declining. However, recently, Ethereum's ETF inflow reached $850 million, setting a historical high, and the attention of off-exchange funds towards Ethereum is increasing. Several institutions also predict that Ethereum may reach a historical high before the end of the year, which is not impossible. As long as the Ethereum Foundation doesn't 'do anything,' its ATH should not be far off.
Market outlook: Altcoins will welcome a catch-up.
Although Bitcoin currently dominates the market, many people have lost confidence in altcoins, I remain very optimistic about the future. From December to March, there may be more favorable factors driving the market up. So, don't be influenced by those who always bear the market; after all, bearish voices in a bull market are always louder. If you are always bearish on the market, you might want to consider exiting.
In recent days, altcoins have experienced slight adjustments, but after the adjustments, they are likely to continue to catch up. At this time, it is not recommended to chase after coins that have already risen significantly, but rather pay attention to strong coins that have adjusted for a month or have experienced a significant drop, as these coins may bring greater opportunities.
