This morning, Powell stated that central banks are not allowed to hold Bitcoin and, in the face of President-elect Donald Trump's promise to create a strategic Bitcoin reserve, 'does not seek legal changes.' Coupled with the Federal Reserve's meeting to lower interest rate expectations for next year, this has led to a broad decline in the crypto market.
BTC has dropped from $105,000 after the Federal Reserve's decision, reaching a low of $99,000. Ethereum has fallen from around $4,000 to near $3,500. The altcoin market, except for a few tokens, is mostly in a downtrend.
In terms of contract data, the total liquidations across the network in 24 hours reached $672 million, with long position liquidations at $575 million. The total number of liquidated individuals globally exceeded 236,000, with the largest single liquidation occurring on Binance for ETH/USDT, valued at $4.0677 million. The market is currently filled with risk-averse sentiment. Moreover, Christmas is next week, followed by New Year's Day. During this period, liquidity is very low, and US stocks are closed, which is completely influenced by retail sentiment.
We need to core understand two things: first, the US is still in a rate-cutting cycle, just with reduced magnitude and frequency, but the fact remains that it is still in a rate-cutting cycle. Second, this is relatively important: the US economy remains extremely strong. As long as the economy remains strong and companies maintain decent revenue, the market will rise. After all, if the economy is good, companies are making money, and liquidity will be sufficient. So, based on the above, there is actually no need to worry; after all, the Federal Reserve is only reducing the frequency of rate cuts. However, the liquidity itself has not been withdrawn; rather, due to the strength of the economy, liquidity might actually be more abundant.
Don’t panic! The bull market is not over yet! Powell's negative attitude poses a challenge to Trump's policy advancement, but it is not necessarily a decisive factor. Bitcoin, as a strategic reserve plan, can be implemented through legislation by Congress. Trust in the power of the trend; the trend is irreversible.
The trend of rising is still ongoing because as long as nothing unexpected happens in Q1 next year, the new president will take office, and with the new SEC chairman, speculation will surely continue the trend.
Furthermore, the FTX restructuring plan will take effect in early January, and the compensation funds will be distributed through fiat and stablecoins, bringing billions back to the market.
So, can we buy the dip at this position?
There’s no need to rush to buy the dip. You can adopt the strategy of 'buy big on big drops, buy small on small drops, and don’t buy if it doesn’t drop' to gradually collect low-priced chips. The current market situation is that Bitcoin and Ethereum, due to the support of spot ETFs and traditional large capital, have a lot of buying pressure below, so the downside is limited.
However, most altcoins lack the support of large capital, and once they fall, there is no support level. Their trends mainly depend on market sentiment. Recently, newly listed cryptocurrencies have also lost their profit-making effect, and basically, the price has been falling continuously after listing, with the speed of halving increasing.
During times of insufficient market liquidity and low sentiment, it is advisable not to touch new coin projects. Also, do not randomly chase hot spots to change positions, especially with new coins on Binance or other CEX, as it is easy to fall into pitfalls.
Powell is cooking the market; after the drop, you can appropriately pick up some strong narrative tokens:
- Trump Concept
➫ Optimistic about the market after Trump's inauguration from January to March next year. If you want stability, focus on ETH, BNB, SOL, and for a more aggressive approach, you can choose ACT, PNUT, etc.
➫ The Trump family's crypto project WLFI purchased $250,000 in $ENA. The current holdings include $ETH, $WBTC, $LINK, $AAVE, $ENA, $ONDO. With the US policy continuing to improve, WLFI's accumulation moves may become a market barometer.
- MEME Sector
For stability, in the MEME sector, you can choose: DOGE, PEPE, WIF, FLOKI, etc.
- Public Chain
For public chains, choose some well-established projects with good heat, such as APT, SOL, SUI.
- AI Sector
➫ For the AI sector, choose FET, including WLD, but I am more optimistic about FET, especially with DWF as a market maker partner, making it less likely for the price to look bad.
- DEFI Sector
The first consideration is still AAVE, including COMP. We have zero cost for these. If you want to re-enter the market, you need to wait for lower positions. Additionally, MKR itself has no issues; it was just dragged down by Ethereum. If you have no stop-loss, you can hold it normally, manage your position, and avoid entering contracts.
Additionally, although there was a significant drop in the early morning, the performance of ETH ETF data still gives us confidence to see the madness in the future. Under such negative news about well-known brands, the data flowing out is something we can see. However, BlackRock alone has seen an inflow of $80.7 million, single-handedly supporting the entire net inflow of ETH ETF, while others are cutting losses, BlackRock is bottom-fishing.
As mentioned before, every major drop is a good opportunity to enter. Today is no exception. We are in a bull market cycle, but the characteristic of this year's market is that it is fast and aggressive; the rallies are quick, and the dumps are also fast. Without innovation or new narrative drivers, it is difficult for the market to sustain; everyone needs to adapt to this pace.
