After Powell released his hawkish stance early yesterday morning, rejecting Bitcoin's strategic reserve plan and stating that the rate cut next year would be more cautious, the cryptocurrency market continued to collapse today (20), continuing the market panic of the previous day. Investor confidence suffered a heavy blow and mainstream currencies fell across the board.
The price of Bitcoin should stop falling temporarily at 95, but the bottom of the shock is still uncertain. It is expected to fluctuate in the short term. The bull market is not over yet. However, there may be some risks in the next few days, but this may be the darkness before dawn. Everyone should stay calm and don't be confused by short-term fluctuations. The real opportunity may not appear until mid-to-late January.
So, everyone, it is still more stable to buy some spot now. I also keep reminding everyone not to trade contracts! Don't trade contracts! Don't trade contracts!
BTC dropped to 95,000; where is the bottom?
Yesterday morning, Powell's words shocked over 200,000 people, thinking that there would be no further wind after the storm, only to find that the bears struck back with a vengeance, as the Fed has no intention of participating in any plans for the government to hoard a large amount of cryptocurrency.
Additionally, with the Federal Reserve's meeting lowering the interest rate expectations for next year, the impact has led to a significant decline in cryptocurrencies, which have already experienced four rapid drops; today's is the fifth.
It can be said that the previous four rapid declines consumed a large amount of buying pressure, so after this drop, there wasn't much buying pressure seen in the market, but rather a gradual downward trend after consolidation, which essentially buried the funds trying to catch the bottom again.
In summary, there is not much to say about Bitcoin's long-term trend; it has been consistently rising. I am very optimistic about next year's market. On the 4-hour chart, there is clear support around the bottom of 94,000. Let's look for a rebound from this weekend to next week's Christmas, as foreigners are on holiday during the festive season. This year's market is already like this; next year will be even crazier. This year is just a rehearsal, also telling you which aspects and tracks the market likes to focus on. Everyone must summarize more; without continuous innovation driving it, the secondary market will be very difficult to operate.
From a long-term perspective, a decline is not a big deal! When can we catch the bottom?
In the short term, it may be challenging to regain a strong momentum. The market was overly optimistic for a while, and with Powell's comments, this wave of decline has cleaned out part of the market's funds, but a greater wealth effect is about to come. As long as we don't perish, we can still stand on a higher stage in the future.
In terms of operations, it is recommended that you do not blindly catch the bottom or follow the trend in buying and selling. Focus on mainstream coins, avoid using high leverage, manage your positions well, act less and observe more, and follow the trend.
From a long-term perspective, the current decline is not scary. For example, Powell is bearish on Bitcoin, while Trump is bullish, and Trump's power has reached its peak. Even if Powell steps down, it isn't a big deal; Trump can still nominate the Treasury Secretary Bessent to balance the Fed's influence.
Recently, many friends have been asking whether they can catch the bottom. I would like to say that it can wait a bit longer; of course, if you want to pick up some chips, you can adopt the strategy of buying heavily during big drops, lightly during small drops, and not buying when prices are stable to gradually collect low-priced chips.
Currently, in the market, Bitcoin and Ethereum have solid support due to spot ETFs and large capital backing; however, most altcoins lack such support, and once they drop, they have no support levels, primarily influenced by market sentiment.
Therefore, at this current stage, it is essential to manage your positions well, and execute strategies with caution. Altcoins with a market cap exceeding $1 billion in the top 100 can generally be considered for purchase; there are not many issues. If you choose altcoins ranked in the top 500 (market cap over $100 million), you need to be very careful; selecting the wrong ones may cause you to miss the entire altcoin bull market, while choosing correctly can lead to good profits.
Most importantly, do not open contracts, do not use leverage, and always buy spot. Even in a raging bull market, 3x leverage can lead to liquidation!
If you are optimistic about the market outlook, stick to it; if not, it's a correct choice to exit. The only wrong operation is chasing highs and selling lows. Each of us needs to be responsible for our own accounts.
In conclusion:
The end of December to early January is a critical time window. With Christmas approaching, the end of the 2024 fiscal year, and the new administration taking office, the sentiment in the capital markets has already been 'priced in'. Generally, the market is relatively calm during this year-end time window, and around January 20, 2025, around Trump's inauguration, the cryptocurrency market may experience a painful crash.
However, in the first quarter of next year, the $16 billion from FTX's compensation will enter the market, along with various states' strategic reserve plans, all of which are beyond the Fed's control. Therefore, the long-term upward trend for Bitcoin remains unchanged; this round of adjustment is just to clear leverage, and greater opportunities will follow.
It is expected that the price of Bitcoin will fluctuate between $80,000 and $110,000, similar to the fluctuation between $50,000 and $70,000 in March this year, until a new event changes the market trend.
If you want to operate recently, do not blindly chase highs. You can selectively choose some mid to long-term potential coins, buying in batches from the end of this month to the end of January to prepare for the market in the first half of 2025.
Before taking action, clarify your strategy: are you doing short-term or long-term trading? If uncertain, you can open two accounts, one focusing on short-term and the other on long-term. The money earned from short-term trades can gradually be transferred to the long-term account, and then liquidated at the end of the bull market.
