In the past week, I have remained in a cash position, waiting for ideal investment opportunities, while the market has continued to decline during this time.
From a fundamental perspective, the wildfires in Los Angeles are still raging and have not yet been effectively controlled. Many wealthy individuals' mansions have been reduced to ashes in this fire, and to compensate for their losses, these wealthy individuals are bound to choose to sell other assets to cash out, including U.S. stocks and cryptocurrencies. Meanwhile, the Fed not lowering interest rates in January has become a high-probability event. The latest economic data released by the U.S. shows that inflation issues still exist, which further lowers the possibility of interest rate cuts in the first half of 2025. Against this backdrop, the market's liquidity expectations are being suppressed, making the investment environment increasingly severe.
On the technical front, it was mentioned earlier that on January 7, the market showed a volume increase with a bearish engulfing pattern and broke below key support levels. This unfavorable technical formation will require a considerable amount of time to repair and digest. The current market is at a critical stage of a tug-of-war between bulls and bears, and the main funds may pressure stock prices and force retail investors to cut losses, to acquire more cheap shares.
In such a market environment, the altcoin market has seen a bloodbath this week, with prices plummeting significantly. Bitcoin has also not been able to remain unscathed, remaining in a sideways consolidation state, making it difficult to form an effective upward trend. Fortunately, by maintaining a cash position, I successfully avoided this round of losses.
Moving forward, I will continue to adopt a cautious attitude, closely monitor market dynamics, and wait for the right entry opportunity. Only when both fundamental and technical aspects show clear positive signals will I consider entering the market, striving for steady profits in the subsequent market movements.
