Yesterday's crypto market felt like a mini roller coaster ride!
Bitcoin (BTC) has slightly oscillated, with market bigwigs trying to pull back the price, but evidently, they have not succeeded, indicating that everyone is quite satisfied with the current price!
According to data analysis, the upcoming market may temporarily consolidate, but don't worry! In the long run, the upward 'train' is still steadily moving along the tracks.
For friends holding coins for the long term, do not impulsively short due to short-term fluctuations; holding onto your assets and selling next year is the wiser choice!
Here, I want to once again emphasize a crucial trading principle:
When market prices decline, we should decisively buy; when prices rise, we should remain patient and not rush to sell.
This strategy can help us remain calm amid market fluctuations, as steady as Mount Tai. Trading has never been an instantaneous process; it requires us to avoid impulsiveness, maintain a clear mind, formulate reasonable plans, and execute steadily. After all, our goal is long-term stable returns, not blindly chasing short-term fluctuations.
Currently, Bitcoin (BTC) is oscillating between $93,000 and $98,000. From last night until now, ETFs and bulls have been supporting the price, preventing it from declining, and it may find a new breakout direction within this range.
Ethereum (ETH) is expected to fluctuate between $3,200 and $3,700, with several positive news recently. The 'buy buy buy' from ETF institutions also provides strong support for ETH, making its current position very attractive.
Next, let's delve into several key factors in the current market:
1. US capital-driven bull market—this is already evident; the core driving force behind this bull market comes from the strong involvement of US capital.
2. The impact of US holidays on the market—currently, we are in the US holiday season (Christmas to New Year), and many investors may choose to take vacations, which has significantly reduced market activity and trading volume.
3. Interpretation of market liquidity tightening—thus, it can be inferred that the current market liquidity is relatively insufficient, especially during weekends. We can even observe some interesting phenomena, such as negative premiums between Bitcoin spot and BN on CB, further validating the tightening of market liquidity.
Regarding today's Bitcoin market, from a technical analysis perspective, we see a typical M-head pattern in the short term.
It should be noted that this pattern should not be solely used as the basis for going long or short. Instead, we should combine it with the current overall market environment and identify key support and resistance levels to formulate more precise trading strategies. As shown in the figure below:
Below is a systematic operational strategy framework to help you navigate the volatile market successfully:
1. Determine the overall trend:
First, clarify the current phase of the market— is it an uptrend, consolidation, or downtrend? Understanding the market's general direction is the first step to success.
2. Identify key positions:
After clarifying the trend, focus on the key support and resistance levels in the chart; these levels often serve as indicators for decision-making, helping us determine the timing of entering and exiting the market.
3. Create a trading plan:
Based on support and resistance levels, formulate clear trading strategies, determine entry directions, and set reasonable take-profit and stop-loss levels. Special reminder, take-profit levels should be flexibly adjusted according to market trends to respond to dynamic changes.
A few days ago, we saw Bitcoin's daily MA30 moving average being broken and stabilizing, indicating that the previously upward triangle pattern based on MA30 has been broken, and the market may shift from an uptrend to consolidation.
In yesterday's analysis, it was mentioned that Bitcoin is consolidating in a sideways range, which is, on the contrary, a positive signal, as it provides the possibility for the market to adjust sideways or build a bottom.
Upon further observation, we found that on the third day of the downtrend, the market showed a 'pin bar' pattern, and the daily MA60 moving average was right around $88,000.
Bitcoin's price has now rebounded to $91,726 and is steadily oscillating above $92,000. As the larger moving averages gradually approach the current price, this provides strong support for the market, and the support from these large moving averages is a key indicator for assessing market strength.
When discussing the relationship between market adjustments and negative news, we often find it difficult to clearly define cause and effect, so this is not critical. What matters is how we make reasonable analyses and responses based on current conditions.
In the face of the current complex market situation, we need to clearly answer several core questions:
1. Positioning the larger cycle:
The primary task is to accurately determine the stage of the larger cycle the market is in— is it a bull market, bear market, or consolidation? This judgment will directly determine our strategic direction, laying the foundation for subsequent trading decisions.
2. Interpretation of adjustment intensity:
If the market has experienced a strong upward trend followed by overbought indicators or divergences, then the ensuing adjustment intensity will be key to assessing market strength. Adjustments in strong markets are often brief and mild, while in weak markets, pullbacks may be more severe and prolonged.
3. Market sentiment assessment:
Currently, there is a divergence between Bitcoin and altcoin performance, and Bitcoin is still in a structural adjustment. Therefore, closely monitoring changes in market sentiment is crucial. By analyzing statements from major platforms (such as certain exchanges) and participant behavior, we can gain insights into the prevailing market sentiment, providing a more accurate basis for decision-making.
In this market environment, exercising caution when adopting a left-side trading strategy to bottom out is essential, ensuring reasonable control over position sizes to cope with potential market fluctuations at any time.
Now let’s take a look at the altcoin situation:
Today, the altcoin market has seen a strong rebound, with the AI agency sector performing particularly well! Popular coins like Virtual, AI16z, ELIZA, etc., have surged over 20%, becoming the market's focal point!
Currently, the altcoin market is showing a trend of 'the strong getting stronger'! Although Bitcoin has recently experienced some pullbacks, coins like Virtual, AIXBT, Game, AI16z, ELIZA, and others have hardly been affected, demonstrating that AI application projects have gained high recognition from the market and attracted significant capital attention.
The current AI agency sector is somewhat reminiscent of the DeFi Summer of yesteryears, full of vitality and infinite potential. Looking ahead, this sector is expected to enter a period of explosion next year, with innovative AI + blockchain applications continuously emerging, attracting more market participants and capital inflow.
Moreover, Ethereum remains worth holding long-term; it not only performed well in the first quarter but also demonstrates strong growth potential in the historical ups and downs of the next 1 to 3 months, making it a core asset worth continuous attention.
Based on historical data, except for the bear markets of 2018 and 2022, the first quarter of almost every other year has achieved considerable gains.
Although January's performance has been somewhat erratic, historically, there has only been a decline at the end of January. February and March typically see a definitive upward trend. At this time, hold your bullets, wait patiently, and definitely don’t give up just before dawn!
Additionally, it is worth noting that Trump will officially take office as the 47th President of the United States on January 20, 2025, and the government-related sectors are likely to see a wave of speculative opportunities before he takes office.
I remind everyone in advance that laying out relevant tokens in the new government sector will be a wise choice, with potential not to be underestimated!
Today, let's delve deeper into why I emphasize following Grayscale's layout; there is definitely meat to be gained!
Take some time to review the coins that Grayscale has recently bottomed out on; their appreciation performance over the past week and month has been quite impressive. Specifically:
LINK: Over the past month, Grayscale successfully bottomed out 50,866 coins!
FIL: Over the past month, Grayscale accumulated 106,686 coins!
SOL: Over the past month, Grayscale increased its position by 4,713 coins!
BCH: Over the past month, Grayscale bottomed out 7,579 coins!
LTC: Over the past month, Grayscale entered 33,110 coins!
ZEN: Over the past month, Grayscale made a significant bottom purchase of 304,031 coins!
Of course, XLM has been offloading recently, and I will not record it for now, but it is evident that Grayscale's layout is unique, and the strategically bought coins are continuously appreciating. Following its lead guarantees profits!
Although the recent secondary market has shown overall sluggish performance, especially altcoins are generally under pressure, on-chain, especially in the AI Agent space, activity remains vigorous!
Leading projects like Virtual maintain an FDV (Fully Diluted Valuation) of $3.1 billion, while Fartcoin and AI16z's market caps also stabilize around the billion-dollar level, seemingly unaffected by the market pullback.
Emerging blue-chip projects are also noteworthy, especially Game projects, whose market value is gradually being widely recognized.
In the past, Game was often compared with AI Agent projects like aixbt and luna, but now it has begun to transform, clearly positioning AI16z as its benchmark.
In the past few days, Game has experienced a shocking threefold surge, and its market cap is nearing aixbt, indicating that its future development potential exceeds expectations.
Moreover, new stars in the race are emerging one after another; the Spore project, with its AI autonomous reproduction feature, has successfully spawned a third-generation product, showcasing infinite potential.
I firmly believe that the AI Agent era will be a lasting and far-reaching era, potentially surpassing the cycle of this crypto bull market!
Based on this judgment, I expect that at least three or more AI Agent projects will have market caps that break the $10 billion barrier in the future, becoming the next giants in the crypto market!
