After several days of decline, market sentiment is tense, with hundreds of thousands of investors facing liquidation, and more than $7 billion evaporated. The sharp volatility of Bitcoin has led the entire crypto market into panic, as if the market has become a ruthless meat grinder. In my previous video, I repeatedly warned about the risks of December 27, urging everyone to avoid high-risk contracts, not to hold coins, and mentioned the risks of meme coins. Those who followed the advice should be relatively safe now.
So, where exactly is the bottom of the market? When can we expect a bit of breathing room? I will share my review analysis; interested friends might want to listen. Please note, this is just my personal review and does not represent any investment advice.
The reasons for this sharp decline are complex and varied: the Federal Reserve has made it clear that it will not hold Bitcoin nor seek to change the law; a large amount of profit that was accumulated earlier needs to be released; large holders may be targeting liquidations of smaller holders; the pressure level at the end of December also restrains the market's rise.
Compared to the last drop from 73,777 to 49,000, the current 12% pullback is relatively mild. The collapse of altcoins is not new.
First, the conclusion is given, followed by technical analysis:
• Bitcoin (BTC): The current price is close to $95,000, with no signs of stabilization. In such a volatile market, it is unwise to open new positions; buying spot at lows might be a choice. I previously predicted it might drop to $80,000-$85,000, and many did not believe it, but the market is always full of uncertainties.
• Ethereum (ETH): Dropped to around $640, a 21% pullback, relatively resilient. As a mainstream cryptocurrency, spot quantitative traders can achieve decent returns within this range.
• Ethereum Classic (ETC): Dropped to around $3,250, showing weaker performance. After this pullback, it may be necessary to adjust strategies. However, with institutional ETF purchasing support, the market's downside is limited.
• Meme coins: I personally am not very willing to review this; it is more like a pseudo-mainstream among altcoins. Instead of investing in meme coins, it might be better to consider buying Tesla stocks, as Musk is paying attention to more and more coins and cannot focus on just one.
Technical analysis:
• Candlestick analysis: Bitcoin has fallen for three consecutive days, with no consecutive green candles on the four-hour chart. If the daily candle closes red tonight, it will form three consecutive declines. In such volatility, it is not advisable to open new positions; investors holding spot assets should remain on the sidelines.
• Greed and fear index: The current index is 74, indicating a greedy state, down 1 point from yesterday, suggesting that the market still believes the bull market has not ended.
• Perpetual contract funding rate: Bitcoin is at 0.0046%, Ethereum at 0.073%. Bitcoin's rate has decreased, Ethereum remains stable, and short positions are increasing; the market has not yet stabilized.
• Maximum pain point for options: In the next three days, between $96,000 and $100,000, as December 27 approaches, the market trend is reasonable and confirms the reasons for the decline.
• Spot ETFs: 6,706 Bitcoins and 16,200 Ethereums flowed out from institutions, which is normal amid market panic, and the selling volume is not exaggerated.
• RSI (Relative Strength Index): Bitcoin has fallen into a strong zone on a weekly scale, returning to neutral in 24 hours; Ethereum has returned to neutral on a weekly scale and entered a weak zone in 24 hours, with selling pressure decreasing.
• Peak escape index: Currently positioned in the middle, with medium escape risk.
• Coin holding index: Bitcoin has fallen to 1.44; holding coins is not cost-effective. If it continues to decline, small incremental positions can be built.
Overall assessment: Bitcoin and the broader market have not yet stabilized. If you have exited, it indicates insufficient risk management. Currently, opportunities and risks are relatively balanced. If you hold spot assets and they are mainstream cryptocurrencies, there is no need to panic; the market will eventually return. If there have been multiple liquidations, it is essential to reassess your strategy.
Moreover, the Elon Musk-themed puppy token, as a conceptual project on the Ethereum chain, is gradually gaining attention, with significant future development potential.