Yesterday (December 16), the price of Bitcoin broke through $107,000, setting a new all-time high. As of the time of writing, the price of Bitcoin is around $106,000, as shown in the image below.
Some analysts believe that the latest surge in Bitcoin's price is largely due to Trump reaffirming his plan to establish a U.S. Bitcoin strategic reserve. According to reports, when asked by CNBC whether he plans to create a cryptocurrency reserve similar to the oil reserve, Trump replied: "Yes, I think so."
The market often reacts this way - when prices rise, potential positive news and various analyses based on it tend to emerge. Some analysts also attribute Bitcoin's breakthrough to the expected Fed rate cut in December.
In the long run, these are all positive for Bitcoin. After more than a decade of development, Bitcoin has evolved from being seen by most people as a "scam" to becoming an asset that is increasingly being allocated by major institutions, and may even become a strategic reserve asset for more countries in the not-too-distant future.
In terms of price performance, it is not an exaggeration to say that Bitcoin is the highest-yielding asset over the past 12 years, with an increase of over 10,000 times from around $10 in 2012 to the current $106,000.
According to a report released by 10xresearch this month, the supply of Bitcoin is dwindling. The report shows that the Bitcoin balances on exchanges are rapidly decreasing, and on-chain data further shows that long-term holders are holding their positions and not releasing supply to the market. Currently, only Binance, Coinbase, and Bitfinex have sufficient Bitcoin reserves, but considering the purchasing power of Bitcoin ETF inflows, Bitfinex's reserves can last about a year, while Binance and Coinbase's reserves can last 2-3 years.
If Bitcoin is adopted as a national reserve by the U.S. in the future, it is also possible that more countries will follow suit, further increasing the adoption of cryptocurrencies. When more grandparents and grandmothers know about Bitcoin, the influx of new liquidity could be huge.
As for the short-term price outlook for Bitcoin, the main risks it faces are upside risk and liquidity risk. Based on these two aspects, we can make some assumptions or guesses.
According to the chart shared by Raoul Pal (founder and CEO of Global Macro Investor), if we only look at the comparison between the Global Macro Investor's Total Liquidity Index and Bitcoin RHS, it seems that Bitcoin has entered the "parabolic phase" of the market cycle and is expected to reach a stage peak of around $110,000 in January 2025, then fall below $87,000 in February 2025.
However, with the support of a 20 trillion U.S. dollar increase in M2 money supply expected next year, if 5% of that liquidity (1 trillion dollars) is attracted to the crypto market (including crypto ETFs), Bitcoin's price may reach a new stage peak before the end of 2025 (the third or fourth quarter).
Of course, the above are just predictions by certain analysts and do not represent my personal views. Please do your own research and do not treat the specific numerical conclusions (guesses) above as investment advice.
Here is the English translation, with the content within <> tags preserved without translation:The same old saying still applies: your trades should be based on your position management, which mainly includes aspects such as fund allocation, portfolio, goal setting, execution cycle, execution strategy, and risk management. If you have not fully planned your position and customized your execution plan, any blind buying or listening to others (such as those who show off their trades or claim to be masters of eternal profits) may be the beginning of your losses.
Just like the speculation mentioned above, even if it is based on a certain "so-called certainty", different people may have different approaches:
- If Bitcoin really reaches $110,000 in January next year, will you consider selling? How much will you sell? If you choose to clear your position and Bitcoin then breaks through $150,000, what will you do?
- If Bitcoin really corrects to below $87,000 in February next year, will you dare to buy? How much will you buy? Will you set a take-profit or stop-loss plan when you buy?
- If you think Bitcoin is still "expensive" and you just like to buy , can you quickly list 3 must-buy and hold reasons for each you buy within 10 minutes?
- How much "zero" capital, Alpha capital, and Beta capital have you planned in your position? How much time and energy do you spend each day on monitoring the market, filtering information, and researching projects?
In short, position management determines the scale of your returns, the scale of returns determines your investment psychology, and investment psychology in turn can affect your position management.
Some people make money relying on strong backgrounds and connections, some rely on the ability to filter first-hand information or information sources, some rely on personal patience and a mature strategy that suits them, some rely on leading tool systems or their own secret methods, some rely on throwing dice and betting big or small, and some rely on differentiated paths (such as selling water and food to those who dig for gold in gold mines, or directly selling various qualities of gold to those who cannot dig out the gold)...
An area full of more opportunities and wealth dreams also means higher risks. Taking the crypto market as an example, there are not only ordinary people, but also highly professional people (including institutions, market makers, etc.), and the money we make is often the money that others have lost. So please think about: what is our advantage compared to others, and what makes us able to win them in a game of competition.
First, stop
Once you find yourself in a predicament or feel lost in the market, it is best to stop and stay calm, carefully review and reflect on your past trades. Then ask yourself: were those trades in line with your plan, or did you have no plan at all and were just blindly following others' opinions!
Secondly, persist
This persistence mainly includes sticking to the basic trading principles and your own trading strategy (or trading discipline).
How many of you still remember the basic trading principles we mentioned in our previous articles: preserve capital, don't touch what you don't understand.
In any financial field (including the crypto market), preserving your capital should always be the top priority, and then consider how to make money. If you want to do short-term trading, such as a 3-6 month cycle, you should set appropriate take-profit or stop-loss based on your risk preference, and the position size should not be too large (as suggested in our previous articles, in addition to BTC and ETH, you should hold no more than 5 other ).
Of course, the definition of trading cycle may be different for different people. If you think that trading within a few hours to a few days is short-term, a few days to a few weeks is medium-term, and a few weeks to a few months is long-term, then operate according to your own definition.
Similarly, if your trading strategy is a well-thought-out plan, then you should try to overcome the fear of the market and stick to it as much as possible, strictly executing your trading discipline, such as your entry and exit criteria, risk-reward ratio targets, etc. Although sometimes our trading strategies may not be perfect, no strategy is 100% perfect. If you make money based on the strategy, you can take reasonable profits, and if you fail, you can optimize your strategy accordingly.
When you gradually maintain a certain balance based on your own strategy, your position and psychology will also be in a continuous improvement process, and then you will find the secret to long-term winning. Remember in an article two weeks ago, I mentioned that I sold some of my positions when Bitcoin was at $100,000, and then there were some sarcastic messages in the background saying: Bitcoin will at least reach $200,000 this round, and you have sold out and are still writing articles to brag... In response to such messages, I can only say: You Can You Up, No Can No BB.
Thirdly, reduce leverage
Previously, a friend told me that he sold his house in March this year and borrowed a lot of money to enter the market, then went "All In" on Ethereum, and then watched ETH drop while BTC kept hitting new highs, so he often gets anxious and keeps asking me when ETH can take off!
Many people enter the market with the goal of getting rich quickly, but they also engage in various revenge trades, trying to achieve rapid wealth accumulation by chasing the trends they see at the moment. As a result, due to excessive leverage, they cannot withstand even a slight market fluctuation, and the end result is not only losing money or being liquidated, but also potentially having their mentality collapse.
Even worse, after suffering losses or seeing others' trade profits, they hope to take a shortcut by blindly following others' recommendations to go to shady exchanges, or even directly hand over their funds (exchange accounts, wallet ) to others for operation, and the end result is inevitably a complete loss of principal, and they can only blame themselves for bad luck, and in serious cases, they may even take on various online loans.
Let me tell you a little story here. Previously, there was a friend who hoped I could directly replace him in operations, that is, he wanted to give me all his money, as he had invested tens of thousands of his own savings and tens of thousands of borrowed funds, and then he wanted me to use his money to buy whatever coins I wanted, and he would give me a certain percentage of the profits if I made money! To put it nicely, this is his trust in me, but to put it bluntly, he is inducing me to take the path of crime.
Here is the English translation:First, collecting other people's funds to participate in financial activities without any compliant procedures already constitutes illegal fund-raising. The Regulations on Preventing and Disposing of Illegal Fund-Raising of the People's Republic of China clearly stipulate that the act of raising funds from unspecified persons by promising to repay the principal and interest or provide other investment returns without the permission of the financial management department of the State Council is illegal fund-raising. For cases involving large amounts, the offenders shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years and shall also be fined. Second, taking such a risk of three to seven years' imprisonment is a losing proposition for me, as I am physically in China now. Third, even if I make money, I may also lose money. If I lose all your money, and you choose to jump into the river, the matter will become even more serious. I can consider collecting a group fee of $55 from others, as it can be considered a form of knowledge payment, and it can also provide some better exchange opportunities for those in need. But I will definitely not engage in illegal fund-raising activities of tens of thousands of dollars to participate in financial trading activities.
In general, for most people, there are some things that can be done, and some things that are better not to do, as not all money can be earned. Trading itself is sometimes a relatively complex matter, and problems may be encountered during the process, and the goal may not be achieved in a day. Discovering problems, thinking about problems, understanding problems, and solving problems will be an ongoing process, as the market is changing in real-time 24/7. We cannot always try to beat the market, but rather expand the dimensions of space and time to view the problem.
