On the first day of December, Bitcoin experienced a waterfall drop, completely erasing last week's warming trend in just a few hours.
The main reason is that the Governor of the Bank of Japan made strong statements on the macro front, leading to increased market expectations for interest rate hikes, which caused U.S. stock index futures to decline, and naturally, the cryptocurrency market followed suit.
If the yen really raises interest rates, the previously popular strategy of borrowing yen to buy dollars for arbitrage may be disrupted, affecting global liquidity. From a price perspective, the monthly chart failed to break through a key position by the end of November, and coupled with the fact that U.S. market makers were on a break last week, there was insufficient market depth, so even a slight sell-off made the price look ugly.
This month is the last time the market expects to discuss interest rate cuts this year. From December to February next year, there may be a pause in interest rate cuts, meaning that after this month, there will be no expectations for rate cuts for at least two months. If there are no hot topics to attract capital during this time, it will be very difficult to maintain a warming market.
This week, there are still some data points, including the ADP non-farm employment data on Wednesday. The worse this data is, the more it favors the expectation of interest rate cuts. The impact of Friday's PCE price data on the market is already minimal, along with PMI data and Powell's speech, but the focus is still on Powell's speech.
Returning to the market, I believe there may be another significant decline around December 4. This morning's wave does not count; history sometimes repeats itself. On December 3, 2021, Bitcoin experienced a significant drop late at night, and it wouldn't be surprising to see fluctuations again between December 1 and 5 this year.
The Bitcoin weekly support is around 74600. This position might be tested multiple times afterward. The daily chart is currently in a sideways trend, similar to the previous analysis about Bitcoin having no support at the beginning. The weekly support is key.
To be honest, if it’s big capital, most people wouldn’t enter the market at a position like 86800, where there’s no clear direction. The rebound has no strength at all; either a new signal appears, or they wait for a suitable price.
Now the entire market has cooled down. The recent counter-trend ZEC has also halved from its peak. The entire privacy sector has seen the most significant corrections over the weekend, with ZEC down 60%, DCR and DASH also correcting over 20%, and several projects affected due to market makers' misconduct, such as $m, $sahara, etc., all directly halving.
Newly listed altcoins have also halved one after another. $mon, as the first ICO on CB, couldn't hold up either. Recently listed new coins, regardless of how strong their background is or how low their valuation is, tend to drop significantly after being listed on a major exchange within a week. This reflects the current market situation. No matter what coin it is, you must sell during the peak attention period; otherwise, you risk getting stuck, and the same applies to the upcoming new coins.
For future altcoins, make a tiered list in your mind, and you will be much clearer.
Layer 1: Established Altcoins / Sentiment Blue Chips such as DOGE, SHIB, and some old public chains (LTC, XRP, etc.). Characteristics: have brand recognition, liquidity, and emotional foundation, but growth elasticity is not as strong as in previous years and is more of an index role.
Layer 2: Head Public Chains / Ecological Tokens (High Beta Blue Chips) such as SOL, TON, and various core coins of popular L1/L2 ecosystems, which have a clear technical path, developers, ecosystems, and capital support. When the market comes, the elasticity is large, but when the cycle is wrong, it will also be severely corrected by the market.
Layer 3: New Concepts / New Narrative Altcoins (Theme-driven) such as AI+Crypto, RWA, DePIN, GameFi, SocialFi, etc. Each wave of new narratives will produce one or two real 'mainline coins.' Those who really make money are often the ones who: get in early + dare to get out when it rises to a certain level, rather than fantasizing about holding until the peak.
Layer 4: Pure Shitcoins / All-in Betting These are the various new memes, contract trades, going from 0 to the moon and back to 0 within 24 hours on Twitter. Essentially, they are gambling chips, and there's no need to discuss development prospects. They are only suitable for playing with very small 'entertainment funds.'
So a cruel but necessary fact to accept is:
Altcoins will not disappear, but the 'mindless altcoin season' will become less and less. What will truly appear is a series of 'local sector small bulls + 90% coins ignored by the market' structural trends.
