Hotspot Interpretation: Statistical data shows that so far in 2024, the most popular cryptocurrency narrative is '#memecoin ', attracting nearly 31% of investors and capturing nearly 15% of market traffic. Following are the '#AI ' and '#RWA ' narratives, accounting for 12.58% and 8.64% of market traffic, respectively.
We believe that the popularity of the 'Memecoin' narrative in the cryptocurrency sector in 2024 reflects the market's preference for fun and community-driven assets. Memecoins attract nearly 31% of investors, capturing nearly 15% of market traffic. Beyond traditional investment logic, the market shows strong interest in assets that resonate culturally and have social media influence. AI and RWA narratives occupy the second and third spots in market traffic, indicating investors' focus on emerging technologies and the tokenization of real-world assets. The rise of Memecoins is not only a financial phenomenon; it also combines humor, community engagement, and cultural movements, making it an undeniable force in the crypto space. This trend may continue to influence the development of the crypto market, especially in attracting new investors and innovative projects. In the coming year, we should pay more attention to the performance of these three major concept sectors.
Cryptocurrency Market Analysis:
#BTC Market Analysis:
On December 18, BTC fell back from its recent high of over $108,350, showing a clear downtrend in the first half of the past 7 days, due to the Federal Reserve's hawkish statements and Powell's remarks about Bitcoin reserves, hitting a low of $92,232. After testing the support on December 24, it rebounded to a daily high of around $99,958. During Christmas yesterday, U.S. stocks and futures markets were closed, likely due to many traders in Europe and the U.S. being on holiday, leading to reduced trading volume and a relatively narrow short-term volatility range. Recently, it has been fluctuating widely around the previous rising trend line while also operating around the control points of the main distribution map.
From the four-hour level of BTC on Binance, it is currently testing the neckline resistance near $99,500 after a potential double bottom formation. If it breaks through in the future, it will be favorable for continued upward rebound. The upper resistance levels are $100,300 and $102,770. However, if it faces resistance, it may retest the support around $92,520.
#ETH Market Analysis:
ETH fell from its recent high of $4,105.47 and similarly declined to around $3,101.73 due to the hawkish statements from the Federal Reserve last week and the negative impact of reduced future interest rate cuts. On the evening of December 20, the PCE index released in the U.S. dropped to a five-month low, and the decrease in the price index, which measures inflation levels, could influence the Federal Reserve's future interest rate policy, potentially leading to a weaker dollar and benefiting dollar-denominated assets like gold, U.S. stocks, and the crypto market, which reacted promptly with a rise. ETH rebounded to around $3,554.4, then fell back and rebounded again, with some adjustment in the afternoon. The short-term upper resistance levels are around $3,554.4 and $3,719.9. If it faces resistance and retraces, the lower support levels are around $3,217.25 and $3,101.73.
Altcoin Analysis:
In the past 7 days, altcoins have seen a significant decline around December 20, but the performance is relatively polarized. Weak altcoins have dropped to the levels of the U.S. presidential election day in November, while strong altcoins are experiencing normal pullbacks and have recently seen substantial rebounds. Sectors like Virtuals Protocol, Pump.fun, and AI Agent Launchpad have shown relatively high gains, with many related concept tokens experiencing significant increases, and some coins even doubled in value.
Options Market Analysis:
In the options market, after last week's market consolidation, the spot price remains horizontally volatile. This Friday, nearly $20 billion worth of Bitcoin and Ethereum options will expire, accounting for nearly half of Deribit's total open interest. The expiration of options may trigger end-of-quarter volatility sell-offs, especially in the case of horizontal spot prices while sellers continue to roll over short positions. If BTC breaks through $100,000, volatility may remain stable; otherwise, altcoins might have a chance to catch up. Although the European and U.S. markets enter the Christmas holiday and close, the crypto market has shown a significant increase driven by Bitcoin. Due to poor market liquidity during the Christmas holiday until year-end deliveries, less momentum is needed for price fluctuations. In terms of options, the short-term implied volatility (IV) has decreased compared to the previous day, and market makers are nearing the end of position rolling, with IV expected to remain stable before the year-end. Currently, the largest options pain points for Bitcoin are at $84,000 and for Ethereum at $3,000, which may become ineffective like previous years.
Macroeconomic Data Analysis:
On the evening of December 20, the PCE and core PCE data released in the U.S. were all below expectations, alleviating some investors' concerns about fewer interest rate cuts next year. The U.S. Department of Commerce reported that the PCE, the inflation indicator favored by the Federal Reserve, rose by 2.4% year-on-year in November, while economists had expected a 2.5% increase. Estimates based on the consumer price index and other data indicate that the PCE price index for the 12 months up to November is a surprising comprehensive cooling report, leading to a sell-off of the dollar, while U.S. stocks, gold, and the crypto market rebounded.
Stablecoin Analysis:
Since the beginning of 2024, the total market value of stablecoins has grown by 48%. In the past 7 days, the overall market value of stablecoins has risen by 0.29% to $20.4786 billion, with short-term growth slowing down, consistent with recent market trends, possibly indicating a decline in short-term market demand.
Gas Fee Analysis:
Ethereum's average Gas Fee over the past 7 days has dropped to 4.58 Gwei, a significant decline from last week, indicating reduced network activity. This may be influenced by the OpenSea Foundation's hints regarding upcoming token issuance. Ethereum's average Gas fee previously surged to 54.3 Gwei. Uniswap, CoinTool, and Tether are the three protocols consuming the most ETH this week.
BTC Data Analysis:
Historical Christmas Bitcoin Price Data: The price of Bitcoin on Christmas 2024 has increased more than twice compared to last year, reaching $98,200, which is 392,800 times that of 2010.
We believe that Bitcoin's price reached $98,200 on Christmas 2024, more than double last year's price, with an increase of over 392,000 times in 14 years. The astonishing growth in Bitcoin's price reflects the maturity of Bitcoin as an asset class and the increasing acceptance in the market. This growth may be related to multiple factors, including a gradually friendly regulatory environment, ETF approvals, and macroeconomic conditions such as expectations of Federal Reserve interest rate cuts, rising federal debt, and ongoing inflation, all of which enhance Bitcoin's attractiveness as a hedging tool. Institutional investors' interest in Bitcoin continues to grow, with strong on-chain fundamentals for Bitcoin and historically low exchange balances indicating increased confidence among holders, leading more to choose self-custody. These factors collectively drive the continuous rise in Bitcoin's price while also demonstrating the market's recognition of Bitcoin's long-term value storage position.
