Aside from the significant upward trend of AI Agents, the cryptocurrency market mostly maintained a narrow range consolidation over the weekend. Bitcoin hovered between $97,000 and $99,000, while Ethereum fluctuated between $3,500 and $3,700. The Bitcoin dominance rate showed signs of stabilizing and slightly rebounding, indicating that the overall performance of Altcoins lagged behind Bitcoin.
VX: TTZS6308
Weekends are usually a time of lower market volatility. As European and American investors resume normal trading days, as long as Bitcoin does not fall below the previous low of $97,200 last night, it may challenge the $100,000 mark again in the short term. Currently at $99,400, it is also heading towards the $100,000 target.
On the other hand, Ethereum (ETH) has been moving in a similar pattern to Bitcoin in the past two days, but seems to be even stronger. As of the editorial deadline, it is reported at $3,648, still fluctuating within the consolidation range.
BTC Trend Forecast for January
Looking ahead, the start of this year will see a positive opening, followed by a breakthrough and stabilization above $100,000 before Trump's inauguration. However, the market may see another pullback before the FOMC meeting of the Federal Reserve on January 29.
This week, the focus will be on the minutes of the December FOMC meeting and the December non-farm payroll report to be released on Friday.
Although the market generally believes that the December meeting will release a hawkish message, the meeting minutes will provide a more direct understanding of the Fed's views on the US economic outlook and whether they believe the risks of economic growth slowdown are rising. Particularly, the Fed's assessment of the inflation outlook and whether they believe inflationary pressures are easing.
On the other hand, economists currently forecast that the US non-farm payrolls in December will increase by 154,000, a slowdown from the previous 227,000, while the unemployment rate will remain at 4.2%.
Are Altcoins Struggling to Rise?
From January 2024 to mid-November, Bitcoin's market dominance surged from 50% to 60%, posing a significant obstacle to the performance of Altcoins.
Although this dominance indicator briefly plummeted to 53% within three weeks (sparking hopes for an Altcoin season), it quickly rebounded to around 58% and then consolidated around 55%. This consolidation highlights Bitcoin's persistent dominance as the primary driver of the cryptocurrency market, while also signaling the potential challenges facing Altcoins, unless Bitcoin's dominance indicator declines again.
We are now in the mid-stage of a bull market, with unprecedented on-chain liquidity growth and major public chains striving to capture on-chain liquidity. Sectors like DeFi, AI, Depin, and RWA have started a new round of narratives, aiming to attract new inflows of capital.
What Can We Position for in the Upcoming Bull Market Cycle?
First, the AI sector, where most projects are currently meme concepts without any standout large-scale projects. But a breakout project that can drive the "wealth effect" is sure to emerge as a year-long hot topic.
Second, the DeFi sector, as essential infrastructure, is indispensable in a bull market. Especially after Trump's inauguration, a more compliant environment will greatly benefit DeFi's development, particularly for revenue-generating projects like AAVE and UNI. The Trump family's continued buying of DeFi tokens is a very favorable proof.
Next, the RWA (Real-World Assets) sector, where institutions like BlackRock are accelerating their deployments. For traditional assets, it provides a new form of liquidation, allowing illiquid assets to be arbitraged or quickly liquidated. The capital inflows brought by ETFs have already clearly demonstrated the interest of non-crypto capital in the crypto market. Once the RWA trend erupts, the influx of capital will be unimaginable. Compliance and utility will be the main themes in this bull market.
The current market is not the best entry point, but it is also quite good. Investors can start positioning themselves selectively.
