With the end of the Christmas holiday, market sentiment is expected to shift positively. Recent data shows that ETF funds have resumed net inflows, indicating a high probability that the market will usher in a one-sided bullish trend. Even if the market adjusts in January, a rebound trend is expected in the short term. This phenomenon resonates with the historical 'Santa Claus rally,' where the market often shows a seasonal upward trend during the last few trading days of the year and the first two trading days of the new year.
In the field of cryptocurrencies, Ethereum's performance is particularly strong. Despite declines in Bitcoin and the US stock market, Ethereum ETF funds are experiencing net inflows against the trend, demonstrating strong market confidence in Ethereum. Many large investors have started to position themselves for the Prague upgrade in March next year, adopting a buy-the-dip strategy. The current market correction provides a good opportunity for entering ETH and its ecosystem coins. In particular, AAVE is considered a good entry point in the $300-$320 range. Additionally, Pepe, as a new Ethereum meme star, is also worth paying attention to. It is recommended that investors hold for 2-3 months to anticipate market performance.
However, UNI has recently faced short-term pressure. According to monitoring, $220 million of Uni has recently transferred to Uniswap, suspected to be a sell-off behavior. Considering that Uni's market capitalization is only about $7 billion, this selling pressure is relatively significant and may lead to a weak market in the short term. Therefore, investors may be more inclined to focus on other quality ETH ecosystem coins, such as AAVE.
Expectations of interest rate cuts by the Federal Reserve have also impacted the market. Currently, the Federal Reserve may delay its first rate cut until June next year, which has become one of the main reasons for the short-term market weakness. Nevertheless, expectations for rate cuts can change rapidly with economic data, and if inflation decreases, the market may still welcome liquidity release in the future. It is expected that the second half of the bull market will be dominated by a moderate slow bull and will not replicate the previous round of excessive liquidity and soaring prices.
In summary, investors should focus on market capital flows, investment opportunities in Ethereum and its ecosystem coins, and changes in expectations for Federal Reserve interest rate cuts over the weekend. These factors will have a significant impact on the market trend for next week and the foreseeable future. Investors should remain vigilant and make reasonable layouts to cope with market fluctuations.