Bitcoin suddenly dropped below $90,000 this time. In simple terms: it encountered "threefold pressure" in the short term, but the long-term foundation may not be shaken. For ordinary people, it could be an opportunity, but be careful not to act recklessly.
Why did it drop?
The Federal Reserve has "poured cold water" on expectations: Previously, everyone thought that the US would cut interest rates in March next year, making money cheaper, which led to a buying frenzy for Bitcoin. However, recent US employment data has been strong, and the Federal Reserve may not cut rates so quickly. With expectations not met, some funds have withdrawn first.
Money has been "siphoned off" to the US stock market: Recently, the US stock market (especially tech stocks) has performed exceptionally well, reaching historical highs. Many funds believe that making money there is more stable and faster, so they have flowed out of the crypto market to chase US stocks.
At the end of the year, institutions have to 'settle accounts': December is a time when many fund companies close their accounts for the year. They made money buying Bitcoin before, and now they are selling some to pocket the profits, which is good for explaining to investors. The money in the market will temporarily decrease.
What's different this time?
Compared to previous crashes, there are two good signals this time:
Fewer gamblers: The futures contract market isn't that crazy, and there hasn't been a 'liquidation' panic.
Whales are calm: The big players holding a lot of Bitcoin have basically not moved, indicating that those who are optimistic in the long term haven't run away.
How will it look later?
Next, focus on:
December 12: The U.S. will release inflation data (CPI).
December 14: The Federal Reserve will meet to decide on interest rates.
If inflation is not high, or if the Federal Reserve speaks 'gently', market confidence may return quickly. Technically, around $85,000 is a relatively strong support level.
What should ordinary people do? Remember three sentences.
Don't increase leverage: The volatility is high now, be honest.
Want to catch the bottom? Use 'dollar-cost averaging': If you are optimistic in the long term, the drop now is actually an opportunity. But don't go all in at once; you can set a plan to buy a little every week or month to average your costs.
You can take a look at other coins: When Bitcoin drops, some other potential altcoins may be wrongly slaughtered and are very cheap. You can research them and find some treasures.
To summarize:
This drop was mainly caused by the external macro environment, not because Bitcoin itself has problems. There may still be fluctuations in the short term, but for long-term investors, every time there is such a panic drop, it may be an opportunity to get in.
The above content is for reference only and does not constitute investment advice!!#加密市场观察 $BTC
