Markets are born in despair and rise in hesitation. This wave of fluctuations is a test of faith.
This month's Bitcoin market is as confusing as the recent weather. Prices are fluctuating between $85,000 and $94,000, leaving many people unsettled.
Institutional funds are continuously buying, while long-term holders are taking profits. The market sentiment index remains between 16 (extreme fear) and 24 (fear), indicating that most people are still watching and skeptical.
In the face of this situation, the three rules I've summarized over the past ten years have become even clearer: don't be fooled by short-term fluctuations, don't use high leverage, and always keep enough cash.
01 Market Status: Strong fundamentals, but short-term sentiment is diverse.
The market is currently in a rather delicate phase. From a fundamental perspective, the underlying logic of Bitcoin has not only remained intact but has actually strengthened.
Listed companies continue to hoard Bitcoin. As of the week ending December 15, the net purchase of BTC by listed companies globally reached $980 million, with Strategy increasing its holdings by 10,645 bitcoins at a price of $92,098. The total amount of Bitcoin held by global listed companies (excluding mining companies) currently stands at 916,510, accounting for 4.59% of the circulating market value.
On-chain data also shows long-term confidence. The Bitcoin stock on exchanges has fallen to a five-year low, with only about 1.8 million coins, while whale addresses holding over 1,000 BTC have increased their holdings by 269,822 BTC in the past 30 days, setting a new historical high. This indicates that 'smart money' continues to accumulate during corrections.
However, short-term prices have performed weakly. Since peaking at $126,210 in October, Bitcoin has retraced nearly 30%. The current price is fluctuating narrowly in the range of $87,000 to $89,000, with trading volume relatively low, indicating a strong wait-and-see sentiment in the market.
This divergence between fundamentals and short-term prices lays the groundwork for the next big market trend.
02 Three Key Signals: Tools to Insight into Market Truths
In my trading experience over the past decade, I've found that most people focus their attention on the wrong information. In fact, as long as you keep an eye on three key signals, you will understand the market better than 90% of people.
Institutional behavior is the core barometer.
Recently, the flow of funds in Bitcoin spot ETFs has been highly volatile. On December 16, the single-day net outflow reached $582 million, the largest outflow since November 20, but on December 17, there was a net inflow of $457 million.
This divergence is actually quite normal—bull markets are not a straight line, but rather a 'two steps forward, one step back' rhythm. The key is to look at the big trend: listed companies, ETFs, and institutions are still continuously allocating Bitcoin, which is the cornerstone of long-term value.
On-chain data reveals true supply and demand.
Blockchain data does not lie; it directly reflects the true state of the market.
Currently, a positive signal is: The inflow of 'whole coin holders' (individuals holding at least 1 full Bitcoin) into exchanges has reached a cyclical low, indicating that selling pressure has weakened.
Meanwhile, long-term holders (those holding for over two years) have been cashing out recently, with at least 1.6 million bitcoins that have not been transferred for over two months now reduced. This is a normal profit-taking behavior and a healthy phenomenon in a bull market.
The macro environment determines the flow of funds.
Although the Federal Reserve lowered interest rates by 25 basis points in December, it sent a signal of 'slowing interest rate cuts in 2026,' which was interpreted by the market as a 'hawkish rate cut.' Meanwhile, the Bank of Japan raised its policy interest rate by 25 basis points to 0.75%, the highest in nearly 30 years.
This complex macro environment has led to a short-term increase in the correlation between Bitcoin and traditional safe-haven assets. Gold and silver prices have recently reached historic highs, with gold breaking through $4,400 for the first time, an increase of about 66% within the year.
03 Three Iron Rules: Survival principles for thriving in volatility.
In the past decade in the crypto space, I've seen too many stories of overnight wealth, but more often it's the tragedy of overnight losses. The following three rules have helped me survive multiple bull-bear transitions.
Rule One: Don’t be fooled by short-term fluctuations.
Current market sentiment is in the extreme fear zone (the fear and greed index is only 16-24), which may actually be a contrarian investment signal.
It is easy to say 'be greedy when others are fearful,' but difficult to put into practice. When the market is pessimistic, human instinct is to flee instead of entering. However, historical data shows that when the fear and greed index is at extreme lows, it is often a good time for medium- to long-term positioning.
Rule Two: Avoid high leverage; living longer is the key.
Recent market fluctuations have intensified leverage risks. On December 18, during the price surge and subsequent drop, over $520 million in long positions across the market were forcibly liquidated, with long positions accounting for 87%.
In a volatile market, high leverage is an 'account killer.' I currently hold 60% of my positions in cold wallets, with only 20% operating on exchanges, ensuring that even in extreme market conditions, my principal is safe.
Rule Three: Always keep enough cash on hand to wait for the best opportunity.
Currently, Bitcoin is in a game phase of 'selling pressure not dissipated + critical support'; the short-term trend heavily relies on macro data and changes in funding. Key support is at $85,500-$85,600 (78.6% Fibonacci retracement), with strong resistance at $89,000-$90,000.
I always maintain a 20% cash position; if the price breaks below key support levels, I will gradually increase my holdings. This strategy allows me to maintain control in volatility.
Looking back, the fluctuations in December are just an interlude in a long bull market. Mainstream institutions such as Standard Chartered and Citigroup have set their Bitcoin price targets for 2026 in the range of $140,000 to $200,000.
The next Bitcoin halving is expected to occur in April 2025, reducing the block reward from 6.25 BTC to 3.125 BTC, cutting supply by 50% and lowering the annual inflation rate to 1.8%.
Short-term price fluctuations are unpredictable, but long-term trends are clear. Don’t let the market’s 'noise' interfere with your judgment; keep your focus on the long term.#巨鲸动向 $ETH
