Christmas Eve passed peacefully last night, but unexpectedly the market started a slight adjustment this morning. The U.S. stock market will open normally tonight, and we will know whether the main funds return by looking at tonight's situation. Currently, the risk aversion sentiment is still relatively high during Asian time, making tonight a key point. You need to understand what conditions are necessary for the market to reverse upwards, especially in the four trading days before Christmas, when all Bitcoin ETFs were in an outflow state, totaling $1.5 billion. This means that if no more positive news appears, there may still be capital outflow tonight. The outflow of ETFs indicates a risk aversion sentiment among off-market funds, making tonight extremely crucial. Whether we can reverse the capital outflow is key.
Currently, the adjustment and decline are just due to some funds unwilling to bet on tonight's data, seizing the last window for risk avoidance before the U.S. stock market opens. However, this situation does not impact long-term holdings and short-term swings; in the end, only retail traders operating contracts will get hurt!
Recently, there have been reports in the market saying that the EU wants to delist USDT. Many friends have asked Crab Boss whether this will have an impact and whether they should convert USDT to other stablecoins.
Once this news broke, many previously indecisive people began to waver, fearing that the market would experience a black swan due to this matter. But it’s important to understand one thing: when news comes out, first understand the fundamentals. What exactly is the situation with the EU delisting USDT?
You need to understand that when the EU delists USDT, it's just a matter for their own virtual currency exchanges. It has nothing to do with global exchanges like Binance, OKEx, or Coinbase. So, in the end, only users of EU exchanges will be affected; they may not be able to use USDT for trading later.
In summary, there is fundamentally no impact. This news actually emerged back in October, so why are people creating panic at this time? The root cause is that last week's decline affected their mentality. As of now, the market has not finished adjusting, entirely due to the U.S. market's closure and capital outflow, so many people cannot see the negative news and then see that the market hasn’t risen, causing them to waver in their mentality.
Therefore, I still advise everyone to understand the underlying logic of the news; it's like buying altcoins. If you don't understand the news, what is the logic behind the altcoins you're buying? Don’t let market emotions lead you, and definitely don’t trade emotionally. Only by being steady can we establish a foothold in the market and seize the real opportunities to make money.
In fact, we can also clearly feel recently that both the market liquidity of Bitcoin and trading volume have declined. However, it is important to note that typically, after the holiday ends, there is usually a surge of funds.
In addition to individual retail funds, institutions are also buying at the beginning of the year, as fund managers will complete their portfolio adjustments before the end of the year and before the Christmas holiday. This adjustment will involve some turnover, and some assets will be sold for profit. Because it’s the end of the year, dividends need to be distributed to shareholders, so many assets will be sold.
However, after the New Year begins, that is, after the Christmas holiday, fund managers will adjust their portfolios again, choosing some high-quality assets for their clients. As we all know, institutions often deal with funds in the tens of millions or even hundreds of millions, so their movements can significantly impact the entire market.
Therefore, after the Christmas holiday, with institutions adjusting their portfolios and historical data in mind, it is highly likely that U.S. stocks and Bitcoin will rise.
Finally, let's recharge our faith:
January 20, Trump Inauguration
Everyone knows that after he took office, we saw the positive statements about cryptocurrency released by the old man and Zheng Ce affecting the market, which are likely to lead to favorable developments. So for now, just patiently hold on.
FTX's $16 billion repayment
This is the closest to us; the news indicates that repayments will start on January 6, with an expected completion of $16 billion within 60 days. Such a huge influx of funds into the market could be a key signal for a comprehensive rebound in the cryptocurrency circle, possibly even reaching a new level.
Ethereum Staking ETF
The Ethereum staking feature is expected to be launched after Trump takes office, which will enhance Ethereum's attractiveness and is likely to attract a large amount of buying interest. Staking applications are likely to appear in January, and before the Christmas holiday, the market has already seen an influx of $131 million in buying funds, indicating that institutions in the market are also looking forward to the launch of staking.
Ethereum Prague Upgrade
Looking back at past Ethereum upgrades, basically after each upgrade, its price experiences a good rally within three months. According to historical patterns, this upgrade is also expected to yield results in January, but we don't know if there will be delays. However, every Ethereum upgrade has seen delays, but it doesn't affect the arrival of the final rally.
Seeing this news, I hope everyone doesn't waver in their expectations for entering the cryptocurrency market. The adjustments we encounter are temporary. If the U.S. stock market closes higher tonight and ETFs start flowing in, you will be thankful that you didn’t panic and cut your losses during the downturn!
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