Good evening, brothers and sisters. Today’s wave of decline in the market makes people feel a little numb. Yesterday’s decline was like the March 12 incident, and today’s decline is like the follow-up or aftershock of March 13.
In the past 24 hours, the global liquidation amount reached 1.023 billion US dollars, and more than 300,000 people were liquidated. Cherish your life and stay away from contracts! Yesterday, the liquidation amount of altcoins far exceeded that of Bitcoin. Although the decline today is not small, the liquidation amount has obviously decreased. It seems that the longs of altcoins have basically tried their best.
Now, after the explosion of the long army, the short army seems to have not been spared. The long position amount is currently 1.3 billion, while the short position amount is as high as 9.3 billion. Are the shorts panicking now?
I personally expect that there may be a rebound this weekend or next week, but the chance of a reversal is not very high. Perhaps it is the darkness before dawn. Everyone should stay calm and not be confused by short-term fluctuations.
The market has always been like this. Every time you think hope is coming, there will always be a heavy blow. Yesterday morning, Powell's words directly led to the liquidation of more than 300,000 positions, and the shorts fought back again. The Federal Reserve clearly stated that it would not participate in the government's cryptocurrency hoarding plan. Coupled with the Federal Reserve's lowered expectations for next year's interest rate cuts, cryptocurrencies suffered another sharp drop, the fifth sharp drop.
These sharp declines almost consumed a large amount of buying in the market. Therefore, after this sharp decline, the market did not see much new buying. Instead, there was a downward trend after sideways fluctuations, and the bottom-fishing funds were buried.
In the long run, the decline is not a big deal:
In the short term, it may be difficult to regain strength. The market was too optimistic some time ago. With the help of Powell's remarks, this wave of decline has cleaned up some of the funds in the market, but a greater wealth effect is coming. As long as you don't die, you can still stand on a higher stage in the future.
In terms of operations, it is recommended that you do not blindly buy at the bottom, do not follow the trend, invest in mainstream currencies, avoid using high leverage, manage your positions well, watch more and act less, and follow the trend.
In the long run, the current decline is not terrible. For example, Powell is short Bitcoin, but Trump is long Bitcoin. Trump's power has almost reached its peak, so it is not a big deal even if Powell steps down. Arthur Hayes believes that even if Powell is replaced, Trump can balance the influence of the Federal Reserve through Scott Bessent, the Treasury Secretary he nominated.
Future benefits
In addition, the $16 billion paid by FTX in the first quarter of next year will enter the market, and there are also strategic reserve plans of various states, which are not under the control of the Federal Reserve. The Federal Reserve is just an institution that prints money, and the Treasury is where the money is actually spent. Therefore, the long-term upward trend of Bitcoin has not changed. This wave of pullback is just to clean up the leverage, and there will be greater opportunities next.
The end of December to the beginning of January is a critical time window. The approaching Christmas, the end of the 2024 fiscal year, and Trump's inauguration may all have an impact on the capital market. Industry leader Arthur Hayes predicts that the cryptocurrency market may experience a plunge around Trump's inauguration on January 20, 2025, after which it can be bought on dips.
Currently, the performance of altcoins is relatively weak, with most of them only increasing by 3-5 times. It is expected that there may be a short-term rebound next week, but it may continue to adjust after the rebound. You can pay attention to the short-term rebound, but don't blindly chase the rise.
Next, select some mid- to long-term potential coins and buy them in batches from the end of the month to the end of January to plan for the market in the first half of 2025.
Before you start trading, you need to be clear about your strategy, whether you want to trade short-term or long-term. If you are not sure, you can open two accounts, one for short-term and one for long-term. The money earned from short-term trading can be gradually transferred to the long-term account, and then you can liquidate your position at the end of the bull market.
Can I buy at the bottom now?
If the position is not heavy, you can adopt the strategy of buying more when the price drops, buying less when the price drops, and not buying when the price does not drop. At present, Bitcoin and Ethereum have solid support from the bottom due to the support of spot ETFs and large capital, but most altcoins lack large capital support and have no support once they fall, which is mainly affected by market sentiment.
Therefore, it is important to control your positions at this stage and be cautious when executing your strategies. You can basically consider buying the top 100 altcoins with a market value of more than $1 billion. If you choose altcoins ranked in the top 500 (with a market value of more than $100 million), you need to be very careful. If you choose the wrong one, you may miss the entire altcoin bull market, but if you choose the right one, you can get a good profit.
The most important thing is not to open contracts, do not use leverage, and always buy spot. Even in a violent bull market, 3x leverage can lead to a liquidation.
If you are optimistic about the future market, stick with it. If you are not optimistic, leave the market. Both are correct choices. The only wrong operation is to chase the rise and sell the fall. Each of us needs to be responsible for our own account.
