During the weekend, except for a few demon coins such as ATA which had a short-term doubling effect, the rest of the altcoins including the overall market were in a range-bound oscillation. Because there was no inflow of funds from U.S. stocks and ETFs, it was a dull time. However, the good thing is that the demon coin market that had not appeared for a long time reappeared last weekend, and the market also showed that altcoins will definitely have a place in the future!
This volatile market is expected to last soon because the Christmas holiday for foreigners is coming to an end and the market liquidity will slowly recover. Next, the market will usher in FTX's $16 billion compensation on January 3. This money is expected to flow into ETH in large quantities, including SOL, because SOL was one of the most seriously injured when FTX collapsed. Therefore, after the funds are in place, this money will also be returned to the most severely injured copycats. The most obvious example is FTT, which has been on the rise in recent times.
On the funding data front, there is a relatively bright spot: Ethereum, in terms of both its trends and the inflow of ETF funds, is outperforming Bitcoin. Last week, the US Ethereum spot ETF had a net inflow of $349 million, and BlackRock and Fidelity purchased 100,000 Ethereum, while BTC has seen a net outflow so far.
This could possibly be preparing for the rebound of Ethereum in January. Historically, Ethereum's performance in the first quarter over the past eight years has been quite good, such as in 2017 and 2021, where Ethereum achieved quarterly gains of 518% and 160%, respectively. Considering the actual situation and the involvement of ETF channels, we cannot help but expect that Ethereum's performance in this first quarter could yield even greater gains.
After tomorrow, we will welcome the expectations for 2025, with annual, quarterly, and monthly lines all set to close. Crab Boss is personally quite concerned about the sentiment of the US stock market this week, as for foreigners, this already marks the beginning of a new year, which indirectly determines whether January will see the emergence of altcoin season!
There are just over 20 days left until Trump takes office, and he previously stated that he hopes Bitcoin will rise to $150,000 before he assumes office. This shows that not only do we anticipate a rebound in January, but Trump is also continuously promoting it. Coupled with the recent influx of funds into Ethereum and its trends, Crab Boss believes that Ethereum is likely to experience a wave of corrective rally in January.
The upcoming short-term market volatility factors will be influenced by the US stock market:
Although the S&P and Nasdaq closed with gains on a weekly basis, last Friday saw a rapid and comprehensive decline, primarily due to the following three reasons:
Quarter-end pension fund rebalancing of stocks and bonds (short-term)
The 10-year US Treasury yield has remained high and has further broken through 4.6%, compressing US stock valuations (mid-term)
The Federal Reserve is slowing down interest rate cuts, while the Bank of Japan unexpectedly adopts a hawkish stance, possibly raising interest rates again in January, posing a risk of narrowing the US-Japan interest rate differential (long-term)
If it is only due to the first factor, there is no need for concern; the market will improve in January. However, if it is due to the second and third factors, it will cast a shadow over the rise of US stocks and bring hidden worries to the continued upward movement. This will only improve after future inflation expectations and interest rate cuts become clearer. However, the shadow over US stocks will undoubtedly be temporary and easily dispelled. Technology stocks have demonstrated strong profitability under high interest rate environments in the past, and with the vigorous development of AI, there is indeed not much to worry about.
Since Trump is about to take office in January, the probability of the US stock market performing poorly this month is low, which also eliminates the risk of a downturn for the rebound in the cryptocurrency market.
This year's market is extremely challenging, with a pace as fast as lightning. The market control of altcoins remains high, and aside from patiently waiting in the spot market, there seems to be no other choice. However, please remember that every difficult period is meant to greet a better future. Crab Boss firmly believes that 2025 will be a year of bull markets. As long as we endure the current short-term difficulties, the super bull market will inevitably erupt as promised!
The recent strength of ETH is a significant signal for the market. Although most altcoins have not yet started a huge rally, they have given strong bottoming signals. Perhaps at this moment, the market's vehicle has begun to enter the chapter of altcoin season.
The major market clearly approaches a critical juncture.
Brothers, come gather here quickly!
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