Source of the article: Talk Li Talk Outside
In the days followin' the FOMC meeting (Beijing time December 19), as the market experienced a periodic pullback, many people started to panic, and some KOLs also seized the opportunity to grab traffic, saying that the market would go to $80,000 or even lower. As a result, some friends chose to get off the train and gave up their chips.
In recent articles, we have generally advised everyone to manage their positions well and maintain calm and rationality. For example, in the article on market trends a few days ago (December 22), we reviewed 4 bullish factors and 3 bearish factors, and mentioned in the article: the probability of BTC breaking below $90,000 this month should not be large, unless there is a new black swan event or a major negative news event.
In the past few days (December 19-December 26), the fluctuation range of BTC was around 13%, and we don't know how many people were shaken off the car in this volatility.
Briefly reviewing the recent market-related articles of Talk Li Talk Outside, we have actually sorted out a lot of thinking dimensions, including:
- The article on December 24 sorted out 5 aspects of macroeconomic factors.
- The article on December 22 sorted out 7 price-influencing factors based on macroeconomic and data levels.
- The article on December 20 sorted out 6 price factors based on intuitive perception.
The reason for sorting out these dimensions is, on the one hand, to make ourselves re-organize the relevant data, and on the other hand, to hope that everyone can have a more macro-level understanding, and can continue to form and improve their own thinking based on this, otherwise they may be easily influenced by various KOL or analyst opinions, either frequently operating and incurring certain losses, or panicking and selling directly, being shaken off the car. We still say that short-term market trends are unpredictable, don't always listen to others' opinions and randomly change your position operations, if you can't strictly execute your own trading strategy, the best way to operate these days is to do nothing.
When the general public is bearish, the market often rises, and we will only see BTC at $110,000 or even higher when the public does not expect it. The market is often so ruthless and against human nature. In this process, only a small number of lucky people, professionals, or people with enough patience can wait for the flowers to bloom.
In less than 6 days, it will be 2025, and the market is still changing 24/7. Now it seems that the $92,500-$100,500 range should be a relatively good short-term psychological price range this week, unless there is a new black swan event in the next few days to break this range. If you are looking forward to a new market, then wait until the first quarter of next year to see the situation, it's better to rest these days.
However, Talk Li Talk Outside does not plan to rest, because in the next few days at the end of the year, we will have a few execution plans:
One is to officially launch the 4th e-book "Blockchain Methodology" (the second volume, about 280,000 words) on December 30, and we are currently rushing to summarize and organize the content.
The other is to release a "Talk Li Talk Outside 2024 Year-end Summary Album" on December 31, and the pictures are currently being laid out and designed.
After talking about the plans, let's continue to sort out some thinking dimensions to assist the judgment of the overall market direction:
1. US Dollar Index (DXY)
The US Dollar Index (you can also pay attention to the Yen Index, etc.) is one of the macroeconomic indicators we focus on daily. In previous articles of Talk Li Talk Outside, we have also mentioned that, generally speaking, a Fed rate cut will lead to a weakening of the US dollar index, which usually means that it is favorable for risk assets such as stocks, gold, and BTC. In other words, once the US dollar weakens, BTC and other risk assets will become more attractive to investors, which may lead to a new round of price increases.
Currently, the US dollar seems to be approaching a relatively high point area in the short term, and there is a certain probability (85-90%) that it may reverse. From historical data, BTC and the US dollar index are mostly inversely related, that is, a weakening of the US dollar often leads to an increase in the purchasing power of BTC. As shown in the figure below.
Of course, considering the year-end and various other factors such as taxes, this inverse relationship may not be so obvious at times. But the basic logic here is that as long as the US dollar does not weaken, BTC and other high-risk assets are likely to experience oscillation or continued decline, unless there are events that can directly affect market sentiment (such as the approval of ETFs or institutions like MicroStrategy constantly buying) and drive a short-term market rally.
2. Seasonality
Although the "clinging to the boat and seeking the sword" mentality may have different views for different people, from a certain perspective, historical data is often a direct and comprehensive reflection and result of the market and human nature. Therefore, we can appropriately pay attention to the performance of Seasonality.
Through statistical data, we can see that since 2015, when BTC has risen in November, it has often risen in the following December as well. As shown in the figure below.
So let's make a simple assumption that this Seasonality will continue to repeat this year. Based on the average performance of around 12% in December in previous years, the theoretical closing price of BTC in December this year should be around $107,500. This means that unless there is a new black swan event in the next few days that causes BTC to plummet, the overall trend will not change. Of course, this Seasonality dimension is not rigorous enough, as history cannot 100% accurately represent the present and the future, so we can just treat it as a simple reference.
3. Global Money Supply (M2)
Compared to the aforementioned DXY, the data reflected by M2 may be more macroeconomic. From the current M2 situation, the global money supply has started to shrink since September this year, with the year-on-year growth rate slowing down, indicating certain downward pressure. As shown in the figure below.
Moreover, we can also find that high-risk assets like BTC react more strongly to changes in liquidity, but since this data indicator has a certain lag (i.e., BTC's reaction to changes in M2 is usually lagging by 2-3 months), we can only use the contraction of liquidity as an auxiliary judgment indicator for trend changes.
Based on current speculation, we may experience some new market changes in the first quarter of 2025 (roughly starting in February or March next year), but during this period we may continue to face an adjustment market for some time (about 5-8 weeks), and we cannot rule out the possibility that BTC may try to challenge new ATHs (such as around $110,000) during the adjustment period. (This is not any operational recommendation, DYOR.)
Followin', of course, this is only based on the single historical data dimension of M2, and we may need to comprehensively consider other factors, such as the Federal Reserve's monetary policy shift or the large-scale adoption by institutions, which may also lead to a certain spatial decoupling between Bitcoin and M2.
In summary, it's still the same old saying: the short-term market is impossible to predict accurately, and if you want to quickly profit through short-term operations, you need to combine various factors you think are effective (such as macroeconomic expectations, policy expectations, indicators, news, etc.) to execute your risk strategy. But if you consider it from a longer time dimension (ignoring the intermediate fluctuation process), TRON is still the cheapest today.
At the end of the article, let's take a look at the current distribution of Bitcoin wallet addresses and see which range you are in:
- There are 50.17 million addresses holding 0-0.1 BTC
- There are 4.31 million addresses holding 0.1-10 BTC
- There are 150,130 addresses holding 10-1,000 BTC
- There are 2,050 addresses holding more than 1,000 BTC
And what we need to do is actually only one thing: set a phased long-term goal for ourselves and strive to become one of the people in the last two groups of the above data.
