The market has plummeted; is the crypto market experiencing a Christmas massacre?
Christmas massacres usually occur in bear markets, and such severe sell-offs in a bull market around Christmas are quite rare!
This drop has no obvious negative reasons, and the timing is suspiciously at 5 AM. Overall, the main purpose of this drop is to clear leverage; other so-called reasons are not valid. This drop cleared nearly 2 billion in leverage, while on August 5, it only cleared 1.1 billion, making it the largest liquidation recently. After this round of leverage clearing, the funding rates for altcoins have returned to normal.
Last night, the market followed the panic sell-off in the US stock market, dropping to around 94,000. Although it found support, it still needs to be repeatedly verified. It seems that short-term adjustments and fluctuations are inevitable at this position, estimated to last around 1-2 weeks.
Clearing leverage is all about preparing for the upcoming market. After this wave of clearing leverage is completely over, Ethereum and altcoins will enter an acceleration phase. The bull market trend is still ongoing; there's no need to panic. If you have negative losses in the spot market, just hold on.
A deep pullback may be the best entry point?
This year, the major cryptocurrencies seem to replicate the trends of 2023, taking off in October, consolidating upwards in November and December, and then reaching a peak in January when the ETF cap is reached. Coincidentally, this year also took off in October, and we are currently in a similar upward consolidation phase. In January next year, with the new administration and Elon Musk joining DOGE, we might perfectly replicate the 2023 trends.
In addition, there is another positive piece of information regarding Bitcoin. Today, Microsoft will hold a meeting to discuss whether to purchase Bitcoin. If approved, Bitcoin is expected to surge again, and altcoins will surely benefit from this. From a broader perspective, major cryptocurrencies, including popular altcoins, might reach their peak in January next year. For the short term, we should wait for the results of Microsoft's meeting. Friends in the car, please sit tight and hold on. Don't ask where the altcoin bull market is; perhaps we are already in a bull market.
Next, if we are to buy at the bottom, we should choose two opportunities:
- If Ethereum breaks through 3800 with volume and holds, then it may be a good time to buy altcoins.
- If Ethereum tests the bottom again (not counting the previous second spike) and breaks below 3600 with low volume, we can accumulate Ethereum or altcoins in batches.
When the market is stagnant, just lie flat and do nothing. Sudden drops like today, without reason, are standard in a bull market. Getting it over with quickly is definitely better than a sluggish state.
For most friends, I suggest never touching high leverage.
In the last 24 hours, a total of 582,486 people have been liquidated, with a total liquidation amount of 1.751 billion. It has been a long time since I have seen such a large liquidation amount. In the bull market cycle, the risk of contracts is significant, so everyone must be cautious.
Ordinary people do not need to and do not have the ability to grasp the market. Opportunities are abundant in a bull market, especially for spot trading, where you can still gain substantial profits with very little risk exposure. High leverage cannot withstand sudden drops like today, and it can easily amplify greed and other negative emotions. Please avoid it; do not lose your principal in a hard-earned bull market!
My view is:
1. The bull market is not over!
2. The altcoin season has not yet arrived!
3. In terms of altcoins, focus on strong coins; every major drop is an opportunity to accumulate.
The altcoin market is likely to experience rotation after this adjustment. Every drop in a bull market is a good opportunity to assess the strength of altcoins. Observe which altcoins remain strong during the downturn!
