$BTC $ETH

The market trends over the weekend were completely as expected. If I had traded short-term according to the expected price levels, it would have been fine, as I hit both the highest and lowest points perfectly. But why do I only trade during holidays and not start on Monday Beijing time?

This is due to liquidity reasons. On Saturday, one can assess the impact of low liquidity on prices; the amplitude is very low, and the turnover rate is low, indicating that most investors are unwilling to participate in trading. This is a sign of narrow fluctuations. By observing price changes further, a relatively accurate price conclusion can be drawn, but this only applies to periods of low liquidity.

When Monday Beijing time arrives, although the liquidity provided by the Asian time zone is not very high, it is still an improvement compared to the weekend, especially with the opening of CME and U.S. stock futures, which can make prices unpredictable. Therefore, after Sunday ends, I will stop my short-term trading ideas. Of course, I also didn't manage to trade during the weekend for various reasons, but the given trading ideas for Bitcoin were correct; the price is right there for all to see.

Starting from Monday, I have been saying for two weeks that January 6 is when liquidity will gradually return. On one hand, the Christmas holiday will have ended, and on the other hand, two weeks later will be the power transition. The biggest influence on the current market is the Federal Reserve's expectations for interest rate cuts in 2025, which the market has been gradually digesting during the Christmas period.

Indeed, the rise of the dollar will promote a decrease in investors' risk appetite, which is a fact. Monetary tightening will also make liquidity less abundant, which is also true. However, the power transition after the election is the peak of the election cycle, and the next phase will depend on Trump's implementation of policies towards the cryptocurrency industry, making it difficult to have a certain cycle.