Market corrections, pullbacks, crashes, and scams—these terms you've probably heard a lot, but what do they actually mean?
Imagine you run a potato business in town. Usually, prices are stable, and business is relatively smooth. However, one day, a rumor suddenly spreads: 'There will be a French Fries Festival, and the winner of the best fries will receive a generous prize!' This news ignites people's enthusiasm, demand for potatoes surges, and prices rise accordingly. This situation is a natural response to increased market demand.
Subsequently, some merchants began to buy potatoes in large quantities to deliberately create a shortage, thereby driving up prices. At this time, prices rose by 60%. However, the government quickly intervened, announced that the market supply of potatoes was sufficient, and consumer panic gradually dissipated, causing prices to fall back, decreasing by about 10%.
This phenomenon is known as 'market adjustment.' When the market overreacts, prices will correct, returning to more reasonable levels.
However, new sellers began to flood the market, hearing that potato prices were rising, and they brought more potatoes to sell. As market supply increased, prices fell again, this time by 25%. This is a 'market pullback,' a temporary price decline caused by new competitors or increased supply.
But the story didn't end there. Suddenly, the government decided to import a large quantity of cheap potatoes, causing panic among consumers, who began to stop buying local potatoes. As a result, prices plummeted by 50%. This is a 'market crash'—a sharp price decline triggered by sudden news or significant events.
In the end, the truth comes to light: the so-called French Fries Festival does not exist; those merchants simply fabricated lies to inflate prices. Once the news spread, the market completely collapsed, and prices nearly returned to zero. This is a typical 'market scam.' When the market is manipulated and trust is lost, prices will experience a devastating drop.
Market analysis
After a rise of over a thousand points yesterday, the market has corrected and then entered a state of fluctuation. In the afternoon, the price surged to around 99300 and quickly corrected back to around 97600, overall experiencing wide fluctuations.
From the current market perspective, BTC rose to around 99500 in the early morning before facing resistance and rebounding. Currently, the price is consolidating at a high level. During the day, pay attention to the upper pressure at 99500 and lower support at 97500. If it does not effectively break, it can be traded in this range.
BTC: Long near 975000 - 98000, target 101000.
BTC: Long near 3400-3430, target 3550.
Before Christmas, while Bitcoin's performance was lackluster, BGB reached a new high, making me feel that BGB is about to lead the market and bring a violent bull market in cryptocurrency—truly impressive! Once BGB rises, BWB starts to soar. Those who are in cash should buy BWB in batches at around 0.5 and below. BGB can rise 20 times in a year, and BWB rising above $1 is not unreasonable.
AAVE's price continues to soar, solidifying its position as the largest lending protocol in the cryptocurrency space, with a market cap of $5.5 billion, surpassing the total of all other top ten lending protocols.
Driven by strong bullish momentum and growing market interest, the token has risen 220% this year, with a 110% increase in the past 30 days.
If the current positive momentum continues, AAVE's price may test $400, a significant level that would set a new high since 2021. With the support of the golden cross pattern on December 23 and the EMA line, the token only needs to rise by 7.5% to reach this milestone, indicating that the upward trend may continue.
The consistency of this technical indicator indicates that bullish sentiment remains strong. If the trend remains stable, buyers may push prices higher.
Recent considerations for altcoin layout:
Spot orders: Cow coin is placed at 1.079 and 1.04, as Trump’s administration is favorable for value coins. Luna coin is a strong coin, suitable for ambushing at support levels.
Coin selection strategy: The altcoin season has arrived, choose altcoins that are associated with American investment institutions. The trend of US stocks is there, follow the US institutions, and these coins are likely to rise.
Key coins:
- AVAX: Involves Morgan and Grayscale.
- Link: Related to Trump, Grayscale, and Fidelity.
- Sui: Invested by A16z and Coinbase.
- AAVE: Involves Framework, ParaFi Capital, and has connections to Trump.
- ENA: Involves BlackRock, Trump, and Dragonfly.
- Pengu: Invested by 1KX and Shima Capital.
- ONDO: Involves BlackRock, Trump, and Morgan.
- CRV: Includes Multicoin Capital and BlackRock.
- ZRO: Invested by A16z, Multicoin Capital, and CB.
- PUFFER: Involves Fidelity and Electric Capital.
- VELO: Involves BlackRock. The offline meeting in Shenzhen on January 2nd and 3rd will provide value research information. Contact me, and let’s meet in Shenzhen!