Over the weekend, aside from a few exceptional coins like ATA seeing a short-term doubling effect, the rest of the meme coins, including the overall market, moved within a range of fluctuations. There was no influx of funds from the U.S. stock market and ETFs, so it was rather dull. However, the good side is that the rare appearance of a meme coin market last weekend indicates that meme coins will definitely have a place in the future!
This volatile market is expected to not last long before finding direction, as foreigners' Christmas holidays are coming to an end, and market liquidity will gradually recover. Next, the market will welcome FTX's $16 billion compensation on January 3, which is expected to flow significantly into ETH and SOL, since SOL was one of the hardest hit during the FTX collapse. Once the funds are in place, this money will return to the previously most affected meme coins, with FTT being the most obvious example of recent continuous gains.
In terms of fund data, there is a relatively bright spot: Ethereum, whether in terms of trends or the influx of ETF funds, is outperforming Bitcoin. Last week, the U.S. Ethereum spot ETF saw a net inflow of $349 million, with BlackRock and Fidelity purchasing 100,000 Ethereum, while BTC has still seen a net outflow so far.
This may be preparing for a rebound in Ethereum in January. Historically, Ethereum has performed well in the first quarter over the past eight years, such as in 2017 and 2021, when Ethereum achieved quarterly gains of 518% and 160%, respectively. Considering the actual situation and the involvement of ETF channels now, we cannot help but expect that Ethereum could see even greater gains this first quarter.
After tomorrow, we will welcome the 25-year expectation, with the annual, quarterly, and monthly lines all closing in a wave. Personally, Mr. Crab is quite concerned about the sentiment of the U.S. stock market this week, as it marks the beginning of a new year for foreigners, which indirectly determines whether there will be a meme coin season in January!
There are just over 20 days left before Trump takes office. Trump previously stated that he hopes Bitcoin will rise to $150,000 before he takes office. This shows that not only do we expect a rebound in January, but Trump is also continuously supporting it. Coupled with the recent influx of funds into Ethereum, including its price trends, Mr. Crab feels that Ethereum is likely to see a corrective rally in January.
The short-term market variable affecting the situation is the U.S. stock market:
Although the S&P and Nasdaq closed positively on a weekly basis, there was a rapid and comprehensive decline last Friday. The main reasons could be the following three:
Quarter-end pension fund stock-bond rebalancing (short-term).
The 10-year U.S. Treasury yield has remained high and further broke through 4.6%, compressing U.S. stock valuations (mid-term).
The Federal Reserve is slowing down interest rate cuts, while at the same time, the Bank of Japan unexpectedly adopts a hawkish stance and may raise rates again in January, posing a risk of narrowing the U.S.-Japan interest rate differential (long-term).
If it’s merely due to the first reason, there’s no need to worry; the market will improve in January. However, if it’s due to the second or third reasons, it could cast a shadow over the rise of the U.S. stock market, raising concerns over continued increases, which will only improve once inflation expectations and interest rate cuts become clearer in the future.
However, the haze over the U.S. stock market will inevitably be short-lived and easily dispersed. Tech stocks have shown strong profit capabilities in the past high-interest environment, combined with the booming development of AI, so there isn't much to worry about.
Due to Trump taking office in January, the probability of the U.S. stock market performing poorly this month is low, which also eliminates the risk of a decline for the cryptocurrency market.
This year's market presents significant operational challenges, moving at lightning speed. The control rate of altcoins remains high, and aside from patiently waiting, there seems to be no other choice. However, please remember that every difficult period is a preparation for a better future. Mr. Crab firmly believes that 2025 will be a year of a major bull market; as long as we endure the current short-term difficulties, a super bull market will surely erupt as promised!
The recent strength of ETH is a significant signal for the market. Although most meme coins have not yet started to surge, they have given a strong bottoming signal. Perhaps at this moment, the market's vehicle has already begun to enter the chapter of meme coin season.
The big market event is obviously approaching a critical point.
