The current crypto space looks volatile in the short term and narrative-driven in the long term, with the real ace being in 'new money'.
Two major pressures in December's market:
The Bank of Japan may raise interest rates (expectations have already started to reflect in prices).
Seasonal tightening of liquidity at the end of the year (the so-called 'Christmas heist').
These two factors determine that there is a high probability of no unilateral breakthrough in the market this month, and it is more likely to be a volatile and gradual decline, with continuous washing of positions. Without new catalysts, the market can only digest existing information.
In terms of narratives, besides the Ethereum staking ETF still being in the pipeline, most of the big stories that can be told have been shared. The last round of price increases was essentially driven by new money pushing ETFs to bring in increments, but what’s truly fierce are the institutional consortiums that have just entered the market, who have not experienced a deep bear market. They have only entered this year and have a completely different tolerance for volatility.
So, regarding the reality, will the market return? Not looking at technicals, not looking at community calls, just watching when this group of consortiums will start buying heavily again.
Institutions have not left the market; they are just temporarily observing. Once the market adjusts appropriately or new news catalysts emerge, they will still be the main force driving up prices. So, don’t guess the bottom; look for signals. The day the consortium's funds flow back is the day the market strengthens again. Until then, be patient and keep your powder dry.
