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 that the market is likely to usher in a unilateral bullish trend. Even if there is some adjustment in the market in January, a rebound trend is expected in the short term. This phenomenon corresponds with the historical 'Santa Claus rally,' where the market often exhibits 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 cryptocurrency space, Ethereum's performance is particularly strong. Despite declines in Bitcoin and the US stock market, Ethereum ETF funds have seen a net inflow against the trend, demonstrating strong market confidence in Ethereum. Many large holders have already begun to position themselves for the Prague upgrade in March next year, adopting a 'buy the dip' strategy. For ETH and its ecosystem coins, the current market pullback provides a good opportunity to enter. In particular, AAVE is considered a good entry point in the $300-320 range. Additionally, Pepe, a new Ethereum meme star, is also worth paying attention to. It is recommended that investors hold for 2-3 months in anticipation of market performance.
However, UNI is facing short-term pressure recently. According to monitoring, $220 million of Uni has recently flowed into Uniswap, suspected to be a selling behavior. Considering that the market capitalization of Uni is only about 7 billion, this selling pressure is relatively large and may lead to market weakness in the short term. Therefore, investors may prefer to focus on other quality ETH ecosystem coins, such as AAVE.
The Federal Reserve's expectations for interest rate cuts have also affected the market. Currently, the Fed may delay its first rate cut until June next year, which has become one of the main reasons for short-term market weakness. Nevertheless, the expectations for rate cuts change rapidly with economic data, and if inflation decreases, the market may still welcome a release of liquidity in the future. It is expected that the latter part of the bull market will be dominated by moderate slow growth and will not see a repeat of the previous round of massive monetary injection and soaring prices.
In summary, investors should pay close attention to 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 trends for next week and in the near future. Investors should remain vigilant and make reasonable arrangements to cope with market fluctuations.