๐จ Market Update: Is This Recovery or a Bull Trap? ๐จ
The crypto market is bouncing back after a brutal bloodbath, but what's next? Here's the breakdown:
What Caused the Crash?
1๏ธโฃ FED Hawkishness:
25 bps rate cut delivered, but fewer rate cuts projected for 2025 spooked markets.
Hawkish projections hurt risk-on assets like crypto.
2๏ธโฃ US Government Shutdown FUD:
Spending bill rejection caused panic.
Good news: The bill passed, avoiding a shutdown.
3๏ธโฃ Massive Options Expiry:
$6.5 trillion worth of options expired, adding volatility and manipulation.
Why the Market Could Be Rebounding ๐
โ๏ธ RSI Oversold Levels:
BTCโs 4-hour RSI hit its lowest in 12 weeks, similar to past bottom patterns.
โ๏ธ Altcoin MCap Dump:
After a 130% pump, a 30% correction mirrors patterns before previous AltSeasons.
โ๏ธ Bitcoin Demand Rising:
OTC desks saw 26k BTC outflow in Nov, indicating a supply crunch.
โ๏ธ Largest USDC Inflow:
$1.2B in USDC moved to exchangesโsmart money buying the dip.
โ๏ธ Funding Reset:
$3B in BTC Open Interest erased, funding rates resetโhealthier market conditions.
โ๏ธ On-Chain Indicators:
Bitcoinโs -1.9% average returns signal a potential reversal.
Potential Risks to Watch Out For โ ๏ธ
โ ETF Outflows:
Bitcoin ETFs sold $800M BTC in the last 2 days, stalling momentum.
โ Long-Term Holders Selling:
Binary Coin Days Destroyed (CDD) indicates increased selling pressure.
Conclusion:
๐ก The recent dip may be the local bottom, with max pain now towards the upside.
๐ The market looks poised for a rally into Q1 2025, but keep an eye on ETF inflows and long-term holder activity.
Stay vigilant, buy smart, and ride the wave! ๐
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