The market always finds its bottom in panic and rises in hesitation, and right now is a key moment where panic and hesitation are intertwined.
This week, the global market seems to have turned into a casino full of uncertainties. The Federal Reserve's policy has changed overnight, the Bank of Japan is about to make a rate hike decision not seen in ten years, and geopolitical risks are surging beneath the surface.
Just last week, the number of liquidations in the cryptocurrency market exceeded 190,000 in a single day, with Bitcoin struggling repeatedly around the $90,000 mark. Meanwhile, gold has been soaring, setting new historical highs.
As a crypto analyst who has traversed multiple market cycles, what I feel is not just risk, but opportunity. Today, I will share my strategies and market observations with you.
01 Three 'Nuclear Bombs' Hanging Over the Market
The first nuclear bomb: The Federal Reserve's 'hawkish rate cut' and leadership changes
Last week, the Federal Reserve cut rates by 25 basis points, but the dot plot indicates only one rate cut capacity in 2026, which the market interprets as 'hawkish rate cut'.
More noteworthy is that Federal Reserve Chairman Powell's term will end in May 2026. Trump is reported to possibly nominate a new chair in early January, with popular candidates including Haskett and Waller, the former advocating for more aggressive rate cuts, while the latter emphasizes inflation control.
The independence of the Federal Reserve is facing a test, and the likelihood of political dominance over monetary policy is increasing. This uncertainty itself can become the biggest source of risk.
The second nuclear bomb: The Bank of Japan's first rate hike in a decade
This week, the Bank of Japan's monetary policy meeting has become a global focus, with the probability of a 25 basis point rate hike to 0.75% approaching 90% (citation). Japan has long been a source of low-cost global funding, and a policy shift may lead to the unwinding of arbitrage trades, triggering a global capital flow back to Japan.
The impact of this shift should not be underestimated; institutions that relied on low-cost yen for investments have to readjust their strategies.
The third nuclear bomb: Geopolitical and data flood
Geopolitical risks have clearly intensified recently, directly affecting energy and shipping security. Meanwhile, this week will see the release of a series of key economic data, including U.S. Q3 GDP, PCE inflation data, and durable goods orders; any unexpected results could trigger severe market volatility.
02 Asset Performance Divergence: Gold Shines, Crypto Under Pressure
In an environment of increasing uncertainty, different asset classes are performing differently:
Gold prices have surged, reaching a historic high of $4,400/ounce (citation). The market's sensitivity to geopolitical risks has significantly increased, with funds continuously flowing into safe-haven assets.
The cryptocurrency market is showing divergence. Bitcoin is temporarily stable in the $88,000-$92,000 range, but the market fear and greed index has dropped to 25, entering the extreme fear zone. Ethereum is hovering around $3,000, with overall market sentiment being low.
This differentiation reflects a change in market logic: shifting from pursuing high-risk returns to seeking safety and stability.
03 Bottom Signals Revealed by On-chain Data
On the surface, market pessimism is widespread, but on-chain data reveals some positive signals:
Short-term holders have realized losses exceeding $4.5 billion, nearing historical extreme levels, indicating that leveraged players and retail investors chasing highs have largely capitulated. At the same time, exchange BTC reserves have decreased to below 2.6 million, the lowest since 2018, showing that funds are flowing out of exchanges.
Indicators like MVRV Z-Score and other medium to long-term metrics have entered the historical 'green buy zone'. These data suggest that the current situation is not a simple bear market but rather a 'mid-term adjustment + washout' phase within a bull market cycle.
04 My Position Strategy and Layout
In the face of the current market environment, my strategy is:
Maintain core positions, but do not rush to buy the dip. The market bottom is a process, not a point. I plan to build positions in batches below $88,000, adding to my position every 5% drop.
The allocation ratio of gold to cryptocurrency has been adjusted to 2:8. Gold serves as a hedging tool, but in the long run, crypto assets have greater potential. Pay attention to dark horses beyond Bitcoin and Ethereum, such as Solana and other high-performance public chains.
The most important point: Stay patient. Market turning points require catalysts, and this week's three major events may be just such catalysts.
My personal position management is relatively conservative, with leverage controlled within 2 times, leaving enough margin to cope with sudden fluctuations. In such an uncertain market environment, surviving is more important than making a profit.
On the evening market screen, red and green flicker alternately, like the fierce battle between bulls and bears. Historical experience indicates that times of extreme fear are often good opportunities for positioning. The 2008 financial crisis and the 2020 pandemic impact were no exceptions.
For those who truly believe in the future of blockchain, every market dip is an opportunity to jump higher. This week's 'three nuclear bombs' not only represent risks but may also be turning points for market direction.
Do you think the Federal Reserve will bow to the economy, or will it insist on fighting inflation? Will the new chair be Trump's 'rate cut agent'? Feel free to share your views and strategies in the comments!
Disclaimer: The content of this article represents personal views and does not constitute any investment advice. The cryptocurrency market is highly volatile; investment should be approached with caution, and assets should be allocated reasonably based on individual risk tolerance.
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