BTC
After our analysis last night, BTC's price experienced a rapid decline, followed by a rebound during the night. During the day, there was a slow downward trend, which is relatively weak. From the ETF data, except for BlackRock's buying, others are selling. In the short term, the upward trend is under some pressure, but from the trends of ETH and altcoins, there is currently no basis for another decline. We just need to pay attention to the possibility of a second dip (it is also possible that this decline is the second dip favored at the beginning of the month, so there is a certain possibility that a rapid decline will not occur again).
From a technical indicator perspective, the current price is still oscillating between the mid and lower bands of the Bollinger Bands. As long as it does not fall below 92,000, we can continue to look for bullish or oscillating market trends. At this level, one can buy spot in batches, but it is not recommended to use leverage to go long. A stop loss should be set if it falls below 91,500.
ETH
The trend of ETH somewhat represents the possible direction of altcoins. Many people say that the altcoin season has arrived, but I think it might be a bit early to say so, and further observation is needed. However, some altcoin projects have indeed seen decent gains, and market sentiment is recovering, making it possible to be bullish on ETH in the future.
Currently, the 4-hour line on the Bollinger Bands is between the middle and upper bands, but the trading volume has not significantly increased. Therefore, it is not advisable to take heavy positions on long orders or add to spot holdings at this time. The middle band is currently at 3390, and if it effectively breaks down (12 hours) to 3200, a stop loss should be set to go short.
Introduction to the Spring Festival Market
The Spring Festival market refers to the price increase behavior during the Spring Festival period. This pattern has been validated many times in the past, with an accuracy rate of about 80%. Generally speaking, this is quite close to the accuracy rate of the December market. As we mentioned earlier, prices may decline as we approach the end of December, which is based on historical market trends. However, in January, there usually isn't much market activity until a week before the Spring Festival, when prices begin to rise.
Every time the Spring Festival market occurs, we should realize that the influence of the Asian region, especially the domestic market, on cryptocurrencies still exists. For example, last year's Spring Festival market was present, and there was no correction at that time. Therefore, this year, it is highly likely that the Spring Festival market will also exist.
The essence of the Spring Festival market is that after experiencing capital pressure in the domestic market in December, it will also undergo a period of time in January leading up to the Spring Festival. This period is a peak time for settlement, naturally resulting in cash flow shortages, which leads to poor performance in the capital market. Once the New Year has passed, it indicates that the pressure on market funds has eased, hence the capital market performance becomes better. Additionally, the domestic A-shares have a characteristic of 'opening red,' meaning that the stock market is likely to rise on the first trading day after the Spring Festival. Therefore, some investors will invest in the capital market before the festival and sell after the festival to earn profits.
We can actually consider that capital has a cost. Whether it is the year-end decline in the West or the decline before the Spring Festival in the domestic market, they are fundamentally caused by market liquidity pressure. As long as your capital is sufficient, you can definitely engage in buying operations during this period and then sell when market liquidity is ample, thus earning your rightful profit rather than blindly following the operations behind various investment institutions. Investment institutions might also sell because of client capital pressure, while in reality, the price fundamentals might not have worsened; they are just tight on cash during that period.
Of course, this kind of reverse operation is actually limited to investors with ample funds. If you have already leveraged, then you cannot do this, because leveraging essentially means borrowing money to speculate. When the cost of the borrowed money increases, if you continue to hold, you will naturally need to pay the corresponding costs and possible lessons.