I am Sister Xu. This morning I saw the news that the US stock market has opened the Santa Claus rally, the S&P 500 index is about to have its eighth consecutive rise, and gold and silver have also reached new highs. But if you look further down, the cryptocurrency market has surged and then retreated. These eight words made my heart sink.
My core viewpoint is very clear: this is not a positive signal for the cryptocurrency circle, and it may even be a warning signal. My current mood is calm and vigilant. While everyone is cheering for the US stock market's revelry, we need to see clearly where the funds are actually flowing and why they haven't flowed to us.
1. Why are U.S. stocks rising? What does this have to do with us?
The news mentioned several reasons, let me break it down for you:
Triple witching options expiration: Last Friday, a large number of U.S. stock options expired, equivalent to clearing some obstacles hindering the rise, making it easier for stock prices to go up. This is good news for U.S. stocks.
Seasonal patterns: Historical data shows that the stock market usually performs well during this time of year, known as the Santa Claus rally.
Positioning early for 2026: Many funds believe that next year the economy and corporate profits will be better, along with hotspots like AI, so they are entering the market early.
The Federal Reserve is dovish: some Federal Reserve officials have said that if interest rates are not cut next year, there may be a risk of recession. This has led the market to feel that the Fed cannot be too tough, and liquidity will not be too tight.
However, the key lies in the phrase that the cryptocurrency market rises and falls sharply.
This illustrates the most critical issue: the risk appetite and funds released from U.S. stocks have not flowed significantly and continuously into the cryptocurrency market. Funds have gone to traditional safe-haven assets like gold and silver, or rotated within U.S. stocks, but for our crypto market, it only tested the highs briefly before retreating. This indicates that the attractiveness or absorption capacity of the crypto market at this point is not as good as other assets.
2. Looking at the information from the entire network: What are the problems within the crypto market?
I looked at other information from the same period, and the situation became clearer: there is a lack of new narratives: the positive effects of Bitcoin spot ETFs have basically been digested, and the next new story that can attract massive global funds has not yet arrived. The market is in a vacuum period of transition.
Macroeconomic pressure remains: Although there are dovish voices from the Federal Reserve, the main tone is still not rushing to cut interest rates. The continued high interest rate environment still suppresses cryptocurrencies that rely on liquidity.
On-chain data does not support: Although there are large whales accumulating, the overall on-chain activity and speed of new capital inflow do not match the characteristics of a bull market's main rising wave. More of it is existing funds in play.
Therefore, my judgment is: the rise in U.S. stocks is more due to its own cycle and structure. It cannot simply be equated with a rise in cryptocurrency. On the contrary, if funds continue to be drawn into U.S. stocks and precious metals, and the crypto market has no independent breakout point, horizontal fluctuations or even bearish trends may be the norm for some time to come.
3. Direct advice for retail investors: What should we do now?
In the face of this situation of external heat and internal warmth, or even external heat and internal cold, do not rush into the crypto market just because you see U.S. stocks rising.
Three things you must do: Lower short-term expectations, give up fantasies of explosive growth: Accept the fact that the market may enter a period of consolidation. Do not expect Bitcoin to rise immediately just because U.S. stocks are rising. Its rhythm may be completely different.
Check your altcoin positions: If U.S. stocks and gold are attracting funds, the internal funds in the crypto world will become tighter. Mainstream coins may stabilize, but altcoins will be very dangerous. Consider reducing holdings of those non-leading and weak narrative altcoins.
Keep an eye on two key indicators:
Can Bitcoin strongly break through and stay above $95,000? If it cannot conquer this previous high area, it indicates very weak upward momentum. Will Bitcoin fall below $88,000 again and test the $85,000 support? If it falls below, the adjustment range may deepen.
My personal plan:
Never chase highs: Especially under the rhythm of cryptocurrencies rising and falling sharply, chasing highs means buying at the top. Maintain a high cash ratio: I still hold over 80% in cash. This cash is to respond to potentially better prices or to wait for the crypto market to present its own independent and strong rising logic.
Focus on BTC and ETH: If the market experiences a panic sell-off, I will prioritize phased positioning in these two core assets. As for altcoins, unless there is extreme undervaluation, I will not easily take action.
To summarize
The Christmas rally in U.S. stocks is someone else's party. The cryptocurrency market is currently just an occasional observer attracted to the door by music, not yet invited to dance. For us retail investors, the most important thing now is not to guess how lively the party is, but to manage our wallets well and be patient. The market's funds are smart; they will flow to the path of least resistance and the strongest stories. Obviously, the protagonist of this story is not us right now.
Remember, in investing, the noise belongs to them, while sobriety and waiting are our own lessons. When the crypto market is ready, it will naturally send out signals we can understand.
The on-chain data I monitor shows that some smart money is taking advantage of this external heat and internal cold gap to position themselves. They are not focused on the current noise but on the keys to the next cycle. I will detail the specific directions and targets in internal strategies. Stay tuned and wait for the right moment.
Real smart money never chases the noise of the market. When everyone is focused on the U.S. stock carnival, the on-chain signals I’m watching have already pointed to the next positioning opportunity. The specific direction and strategy will be synchronized in the chat room below at the first moment.
