Good evening, brothers. Bitcoin recently set a historical high in November, ushering in a significant price increase. However, with the continuous rise in coin prices, the market has shown a clear divergence phenomenon. The two most striking phenomena are: on one hand, Wall Street institutions, especially MSTR, are frantically buying, purchasing $12 billion worth of Bitcoin in a short time; on the other hand, long-term investors holding Bitcoin for more than six months are quietly selling, averaging a daily sale of 25,600 Bitcoins.
This seemingly contradictory market behavior has attracted a lot of attention and discussion. After all, the reduction in holdings by long-term holders may affect market stability, especially when their selling speed far exceeds the buying volume of institutions. People can't help but wonder: does this mean that the price of Bitcoin will face a correction?
Historically, the last time such a divergence occurred was five months ago when the price of Bitcoin corrected from a high of $73,700 to $49,000, and the volatility lasted for quite a while. Therefore, the market is also worried whether this time will repeat the previous situation and enter a period of adjustment.
Why have old altcoins started to rally recently? Has the effect of speculating on new coins instead of old ones failed?
Mainly due to the favorable policies of Trump.
He hopes to eliminate all capital gains taxes imposed on cryptocurrencies issued by American companies.
This means that Americans holding ADA, ALGO, XRP, HBAR, and other crypto assets will enjoy complete tax exemption on profits since the creators of these coins are American companies.
At Coinbase, the top-ranked spot trading volume is actually XRP, whose trading volume equals the total of BTC, ETH, and DOGE, indicating that the FOMO sentiment among American investors has risen.
XRP's market capitalization also reached a new high, returning to the top three, and it plans to issue new stablecoins.
The trading volume of XLM's Stellar coin has also surpassed SOL. XLM is an old project launched in 2014, which had dropped 90% over the past four years, but in the last three weeks, it has quickly returned to its historical high.
From the current trend, as Ethereum rises, funds are starting to flow into altcoins on exchanges. Don't easily switch holdings for previously held altcoin projects; there is a high probability of a rotational market.
The reason there was no altcoin season before was the lack of new funds in the market, but as the Federal Reserve continues to cut interest rates, the incremental funds in the market are gradually increasing.
Although many exchanges' coins are garbage, they can still be picked up for speculation.
However, there are methods to pick these projects.
Currently, the best speculative targets are two types: newly launched meme coins and some older coins that are becoming active again.
Recently, the coins that have surged are also older coins from 2017 and this year's new meme coins, as they have the least supply pressure.
In the face of a dazzling market, there are often two common operational methods:
Staring at the market every day, ultimately chasing the highs
This operational method is often 'the more you see, the more anxious you get', especially when seeing the prices of major coins like Bitcoin continuously rising, some investors can't help but feel anxious and ultimately choose to chase the highs. However, the biggest problem with chasing the highs is that your buying cost will keep increasing, and the risk correspondingly increases.
Coin swapping operation, seeking low prices
Another method is to focus on those coins that are rising relatively slowly, believing they have room for growth and preparing to buy at low prices. But this operational risk is also very high. Those coins that rise slowly may have underlying weaknesses, and after purchasing, there may be a long period without price increase, or even face price corrections. And those popular coins you sold may soon experience explosive growth.
The common point of these two operational methods is that investors' buying costs are continuously increasing. Through this frequent operation, although some profits may be gained in the short term, one may ultimately find that their investment cost is getting higher and that the altcoins held are likely to be at a high cost position when the bull market ends.
Upcoming market volatility
Entering the new month, there are also some key points in the market that need attention:
ETH price trend
Ethereum's price has recently seen a steep rise. Although a horizontal consolidation in the short term is a good sign for further increases, the support and resistance levels are very important. The short-term support level is at $3,570, while the resistance level is at $3,730.
The rebound of altcoins
With Ethereum leading the charge, altcoins have also rebounded. However, this rebound may only be short-term, and there is a risk of slight adjustments in the market.
Release of important economic data
On November 5th, non-farm payroll data will be released, and on November 11th, the CPI (Consumer Price Index) will be announced. At the end of the month, there is also the Christmas holiday. These significant events may bring considerable volatility to the market, and investors need to remain vigilant.
