The CPI data yesterday was in line with market expectations, which also means that the Fed's rate cut in December is no surprise. This has led to a wave of buying, pushing BTC back above $100,000, consistent with the situation of last week's non-farm payroll data. As mentioned yesterday, in most cases, except for black swan events, the decline will not last more than 72 hours, which is the rhythm of the market.
After the rapid rebound following the large-scale liquidations in the past two days, it is important to remember that if you did not reduce your positions or chase the highs, you should lower your positions a bit to lock in some profits and avoid the recurrence of extreme market conditions. Do not panic and try to cut your losses when the market declines, as this is often caused by over-leveraged positions. If your position size is not large, the dips can actually be good opportunities to buy the dips. At the same time, do not forget the days of getting beaten up when the market is rising, and control your greed, so that you can have the firepower to buy the dips when others are in fear.
This market is not about being conservative and not making big money, but rather requires time. Aggressive contract players may be able to make big money in the short term, but their liquidation to zero is definitely related to their aggressive profit and loss.
The most eye-catching rebounds are LINK, AAVE and SUI. The news that Trump's family office has purchased AAVE and LINK has led to further price increases. For those that have already risen, it is not recommended to chase them. We have also internally recommended some altcoins in related sectors for everyone to lay in wait.
Another stable indicator is BNB. Based on the pattern, BNB usually has a new token launch every month, and the last one was on November 14th. Given the recent strong market performance and the fact that the previous project USUAL has been continuously rising since its launch, if there is another new token launch, the hype will definitely be high. Therefore, BNB is likely to see a sustained upward trend. From a short-term perspective, the current price of $716 has a favorable risk-reward ratio, with resistance at $760 and $795.
Regarding the market, BTC almost effortlessly reached $100,000 last night, indicating that the resistance at this level has been largely eliminated. The market consensus on BTC is now in the six-figure range. The recent correction was really without much reason, just to unwind some leverage. Of course, there was also some institutional arbitrage and position shuffling. Overall, this decline has significantly increased the cost basis of the market, which is very beneficial for the subsequent push to $120,000 and $150,000, especially since Trump has also expressed the hope that BTC price will be above $150,000 before his term ends on January 20th.
ETH has also performed very well, with the ETH/BTC ratio returning above 0.039. ETH ETF funds have seen net inflows for 12 consecutive days, with another $100 million inflow last night. The attractiveness of ETH to off-chain capital is now not much different from BTC. Moreover, Trump's new project WLFI has also started buying ETH, with $10 million purchased yesterday and $1 million in AAVE and LINK today, indicating that the market embracing of ETH is just a matter of time.
Macroeconomically, the Fed's rate hike this month may be pushed back to January 2025, which is beneficial for the upcoming Fed rate cut and market capitalization. It appears that the crypto market is transitioning from the first stage of broad-based rally to the second stage of "the strong get stronger".
In selecting strong coins, either those that have fallen less or those that have fallen sharply but rebounded quickly, with a strong narrative. For example, the AI sector, MEME sector, SOL series, and the recent DeFi sector.
If the first stage was characterized by sector rotation, the second stage should be characterized by a race to the top:
After the broad-based rally in the first stage, the market has gained awareness of the main narratives or strong targets. Once confirmed that they can rise again, capital will rush into these targets, and the major players will also actively stir things up (as everyone knows, this is a bull market, and pulling them up will attract a lot of capital).
In the current market, we cannot expect both the stability of BTC and the high returns of altcoins. There is a trade-off - altcoins may rise quickly, but they can also crash in a single day, or even in a few weeks or months. Do not overestimate your ability to control human nature. If you have a large position in altcoins, be prepared to take profits in time. However, mistakes are inevitable. Always remember, living to fight another day is more important than short-term gains!
