The crypto market in December feels like an exhilarating roller coaster, and while most people are dizzy from the ups and downs, we seasoned veterans can smell the familiar scent of opportunity.
As an analyst who has immersed myself in the crypto industry for many years, I firmly believe in one principle: when market consensus is highly unified, it often signals a turning point. Currently, about 70% of participants are betting on a bearish consensus of 'breaking 90,000 by the end of the year,' which instead makes me, a seasoned veteran, feel a thrill not experienced in years.
This reminds me of 'Black Thursday' in March 2020, when Bitcoin halved in a single day and the entire network lamented that 'cryptocurrency is dead.' However, that turned out to be the starting point of a new bull market. History does not simply repeat itself, but it always carries similar rhymes.
01 Market sentiment has reached an extreme, it's the right time for contrarian positioning
The current sentiment in the crypto market is like ice and fire. On the morning of December 1, the cryptocurrency market experienced a 'flash crash' where Bitcoin plummeted over $4,000 in two hours, briefly touching $86,161.
With this decline, the cryptocurrency fear and greed index briefly fell to around 20, indicating extreme fear. Historical data I compiled shows that when this index is below 25, the probability of market gains in the next 1-3 months exceeds 70%.
This extreme pessimism is precisely the best contrarian indicator. When even beginners are following the bearish trend, we seasoned investors should instead be invigorated.
The market always punishes blind followers and rewards independent thinkers. The current sentiment has already given the first important signal.
02 On-chain data reveals secrets, and whales are quietly positioning themselves
As a seasoned analyst, I never rely on intuition but believe in hard data. Recent on-chain data has shown clear bottom characteristics:
In the past 24 hours, over 60% of the liquidations in the entire network were shorts, indicating that bearish forces are being gradually cleansed by the market. More importantly, the holdings of whale addresses with over 10,000 Bitcoins have shown a significant increase over the past week.
On-chain analysts have detected that some ancient whale addresses have recently been continuously selling large amounts of crypto assets. On the surface, this appears bearish, but in reality, each price drop caused by whale selling is quietly absorbed by larger funds.
When retail investors are panic-selling, smart money is quietly positioning itself. This accumulation by institutions in contrast to retail selling has been consistent at market bottoms.
03 The macro environment is turning favorable, a flood of liquidity is about to arrive
At the macro level, several favorable factors are brewing, which are likely to become catalysts for a market rebound:
The Federal Reserve officially ended quantitative tightening (QT) on December 1. Historically, risk assets have seen significant increases 6-12 months after the Fed ended the last round of quantitative tightening.
The probability of the Federal Reserve cutting interest rates by 25 basis points at the meeting on December 10 is as high as 87.4%. If true, this will be a prelude to more rate cuts in 2026.
The candidate for the Federal Reserve chair may change, and several candidates considered by the Trump team have a friendly attitude toward cryptocurrency. This means that the Fed's policy may shift towards a more accommodative stance.
Liquidity is the lifeline of the cryptocurrency market. Currently, the global liquidity environment is gradually improving, which is a substantial positive for risk assets like Bitcoin.
04 Technical and fundamental aspects are resonating, and a bottoming pattern is gradually forming
From a technical analysis perspective, Bitcoin is forming a bottom at a critical position:
The short-term moving average group for Bitcoin is in a tense upward state. Although the process is volatile, overall momentum has not weakened. More importantly, the short-term moving averages are beginning to push up the long-term moving average group, which is a signal that the market pattern may change.
Regarding key support levels, analysts generally focus on the range of $83,000 to $89,000. As long as this area is maintained, the market is expected to gradually test higher resistance.
Fundamentals also support a positive outlook. The total supply of stablecoins surpassed $160 billion in 2025, reaching a historical high. This key indicator often leads Bitcoin price increases, indicating that the underlying purchasing power in the market is continuously strengthening.
05 Risk warning and strategy suggestions
Of course, the market will never only have one-way movements. We need to be aware of potential risks:
If Bitcoin's price drops below $75,000, it may trigger a more severe selling wave. If the macroeconomic environment deteriorates beyond expectations, it may also delay the recovery of the crypto market.
Based on the above analysis, my personal operational strategy is:
Gradual positioning instead of aggressive accumulation: use a dollar-cost averaging strategy to buy in batches near key support levels, reducing average costs.
Focus on quality assets: prioritize strong fundamental assets like Bitcoin and Ethereum during market panic.
Stay patient: the formation of a market bottom takes time, and there is no need to rush.
The road ahead may still be bumpy. Caladan's research director Derek Lim pointed out that Bitcoin may consolidate between $83,000 and $95,000 in the short term. But truly visionary investors will not be troubled by short-term fluctuations.
As the well-known analyst Tom Lee said, the value of current crypto assets needs to be viewed from a supercycle perspective of 5-10 years. Short-term ups and downs are merely minor ripples in this long journey.
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