This year's Christmas did not experience the 'Christmas crash' like in the past; market sentiment has shown some slight warming. This warming sentiment is mainly due to the rise in U.S. stocks last night. Previously, Bitcoin's decline was also affected by U.S. stocks; once U.S. stocks fell, Bitcoin would fluctuate accordingly. However, before Christmas, Bitcoin's ability to close higher indicates that the market may have passed the risks of this Christmas, and future trends may slowly recover, potentially returning to the expectations of the market before Trump's taking office.
Ethereum's performance has also been relatively stable recently, and today it briefly broke through the first resistance level of 3,500 USD. The warming of Ethereum is not unexpected, as its ETF inflow data shows positive performance, indicating that funds are supporting it, thus preventing panic. If you have followed the analysis from 'Little Horse', you should understand the logic behind this, so I won't explain it in detail here.
Market trends during Christmas
Regarding Bitcoin, it is expected that its price will fluctuate between 94,000 and 100,000 USD. Although market sentiment is still somewhat tense, panic has eased. To break the current stalemate, the market needs strong trading volume. Although Bitcoin did not break through 110,000 USD this time, its trend has been established, and both it and altcoins are currently oversold. During Christmas, there hasn't been much large fund operation, so there won't be a significant rise, but a sharp drop is also unlikely, providing the main players of altcoins a low-cost opportunity to rally.
Is there still an opportunity to buy at the bottom?
In the short term, there may be opportunities to buy at the bottom. Bitcoin has rebounded to 98,000 USD, and since the 23rd, ETH has not followed Bitcoin's downward trend. With the U.S. stock market closed, market liquidity is low, and significant liquidity will not return until after New Year's Day. Although market sentiment is relatively stable during this stage, if there are negative news, there may also be a short-term price drop, which could be a buying opportunity. The real big market may have to wait until after New Year's Day, especially from mid-January to early March, when the market may welcome a new trend.
Historically, the performance of the stock and cryptocurrency markets in the first 100 days after a new U.S. president takes office has generally been good. Therefore, if there are no issues with the U.S. economy and Trump does not encounter significant political risks, the market is expected to develop as anticipated. As for the cryptocurrency market, the premise is that Bitcoin and Ethereum can maintain stable upward trends.
January market outlook
Entering January, market sentiment may lean towards bullish. Firstly, around January 6, the first batch of compensation from FTX will begin, with an estimated amount of about 16 billion USD. Most of this money will flow back into Ethereum and some altcoins, as these compensation funds primarily target retail investors, and for retail, Ethereum and some leading altcoins will be the preferred choice.
Additionally, with Trump taking office on January 20, the market is full of expectations regarding his economic stimulus measures and cryptocurrency policies. If Trump can promote a loosening of cryptocurrency market policies, or even make Bitcoin a strategic reserve for the U.S., market sentiment will become even more positive. Therefore, January will become a time worth preparing for in advance, with FTX concepts, Trump concepts, and Musk concepts becoming the main themes.
When will the altcoin season arrive?
Many people believe that the altcoin season has already arrived, but the current market signals do not fully support this. Although some altcoins have outperformed Bitcoin and Ethereum, whether we have truly entered the altcoin season still requires more market observation. Personally, I believe the altcoin season may not officially arrive until next month, so now could be a time to gradually consider buying altcoins, but patience is also needed.
Current market liquidity is low
Starting today, market liquidity will hit the lowest point of the year, even below weekend levels. Going forward, market trends will be more influenced by investor sentiment, particularly the sentiment of Asian investors, which may become the main driver of price fluctuations. In the short term, it will be difficult for the market to see large-scale buying, as the liquidity in the spot market is insufficient, but long positions in the futures market are continuously increasing, which may drive prices up.