Can Ethereum ETH break its historical high this year? Will the market cap of altcoins reach a new high in the first quarter of 2025?

Source: Talking Li and Talking Outside

In a recent series of articles, we have mentioned the topics of market trends and altcoins several times. However, based on some comments from the backend, I always get the feeling:

As long as the market rises, someone will leave a message asking which coin to buy now.

As long as the market falls, someone will ask whether to liquidate immediately.

Perhaps this field is still filled with speculative opportunities that ordinary people cannot experience in other areas, so many people's mentality seems quite restless. As soon as the market rises, they shout that the bull market has arrived; when the market falls, they shout that the bull has left. When the market rises, they say the altcoin season has begun; when the market falls, they say the altcoin season is over. The result is a flurry of operations, and in the end, they find that their entire position is left with nothing but dead mice.

I have always believed that I have written enough articles to clarify things, at least in terms of the overall direction, which should help or inspire some people. But why do I continuously receive similar comments like the ones above? Then I looked at the recent dwell time and completion rates of some methodological series articles in the public account's backend, and they are generally quite low. For example, an article that takes about 10 minutes to read completely (based on 450 words per minute) has an average dwell time of less than 2 minutes, and the average completion rate is around 30%.

The reasons for this can be boiled down to two: first, our content output is not attractive enough. Second, some people lack sufficient reading patience.

First of all, from the backend data, most people do not have much patience to read a long theoretical article completely. However, I can understand this very well. After all, in this era of information explosion and short videos, fewer and fewer people can calm down and persist in reading long articles from a particular blogger.

Moreover, most people probably follow a dozen or even dozens of similar bloggers at the same time. If we expect others to spend 10 minutes reading each blogger's article, then it would take several hours a day… To put it bluntly, I can't do that either, so any blogger (including myself) has no reason (or obligation) to demand that others must do something or finish something.

Although, from the perspective of a blogger, we hope that the content we produce can be seen by more people and that they can give a "like" or "read again" after finishing it. But as mentioned above, many things do not need to be forced. Whether to read or not, how much to read, these are indeed the freedom of each reader.

Secondly, I have been continuously thinking through some things. For example, in terms of content output, we still insist on maintaining our original intention. We focus on our own learning and thinking and will not consider deliberately embellishing content to create attractiveness. We also will not casually change our style to cater to more traffic. We will continue to choose to output content through long articles from time to time. We write casually, and those who are destined can take a look; perhaps that is enough.

Additionally, up to now, Talking Li and Talking Outside has actually provided quite a few supporting tools. If reading articles still cannot meet the needs of a small number of partners, then:

For those with further learning needs, we have organized the [Talking Li and Talking Outside Toolbox] and provided a series of related e-books, such as "Blockchain Thinking Advancement" (about 120,000 words), "Introduction to Basic Knowledge of Cryptocurrency" (about 80,000 words, to be released this month), and some auxiliary content including "Quote Collection."

For those with further communication needs, we have also set up the [Talking Li and Talking Outside Mutual Aid Group] and provided a new series of e-books, such as "Blockchain Methodology" Volume 1 (about 340,000 words), "Blockchain Methodology" Volume 2 (about 280,000 words, to be released this month), and more auxiliary content including "Strategy Collection."

In short, we only do what we can do and are willing to do. As for how many people can see and discover what we do and how many can be effectively helped, let's take it easy.

Many times, reality is often harsher than ideals. For example, when you do something, others will think it is what you should do. If one day you stop doing it, others will criticize you for not continuing. Or if one day others discover that you did not do a certain point well, they will continue to blame you for being ungrateful and even directly deny everything you have done in the past. Therefore, in any field, we should strive to find those who resonate with us, rather than trying to please everyone. Perhaps sometimes, we really should learn one thing: let go of the desire to help others and respect others' destinies.

Now let's get back to the main topic and continue discussing altcoins.

Recently, after ETH broke through $4000, it did not stabilize but experienced a relatively sharp correction, dropping to around $3500. As of the writing of this article, it has returned to around $3900. Although there are short-term price fluctuations, if we look at on-chain data and combine it with weekly levels, ETH is still overall in an upward trend.

For example, in terms of on-chain data, the inflow of ETH ETF has been continuously increasing, remaining in a state of positive inflow since November 22, as shown in the figure below.

At the same time, investors (including whales) have continued to withdraw large amounts of ETH from exchanges over the past few weeks. I did a simple count, and from November 28 to now, more than 490,000 ETH has been withdrawn. As shown in the figure below.

In simple terms, the inflow of funds, the continuous accumulation by whales, and the ETH staking we mentioned earlier seem to be directly supporting the price prospects of ETH.

Furthermore, from the K-line perspective, the MACD indicator still shows a good upward trend overall. The position around $3900 still looks like a relatively good starting point; the next step is to see if it can continue to break through effectively. As shown in the figure below.

Overall, whether ETH can break through its historical high this year, I do not know, but perhaps in the near future, we will have the opportunity to witness this result, and this process still requires patience.

Whether ETH can effectively break through will also be one of the foundations for the continued performance of the altcoin season. As the king of altcoins, if various altcoins need to perform better overall, historical experience shows that ETH must first have a certain performance. Next, let's continue to look at the indicators!

The first is the Altseason Index.

We have introduced this indicator several times in previous articles. From the current displayed value, this indicator successfully broke through 75 this month (December 2). Although as of the writing of this article, the value has dropped to 69, theoretically, we may witness some altcoins rising or creating new brilliance in the coming months (short cycle). As shown in the figure below.

The second is BTC.D (Bitcoin Dominance).

According to historical experience, true altcoin season opportunities arise when Bitcoin's dominance begins to decline. From the current data, it seems that an overall bullish change in altcoins is occurring.

In the last major cycle, Bitcoin's dominance reached a new peak after bottoming out, taking about 1,070 days. From the bottom of this round to this year's new relative high, it took about 1,050 days, almost the same script happening again. If history continues to repeat itself, it indicates one thing: the altcoin season has now begun. As shown in the figure below.

The third is ETH/BTC.

According to historical experience, once BTC creates a new ATH, ETH/BTC will approach relatively low levels. As shown in the figure below.

When ETH starts to outperform BTC in terms of exchange rate, altcoins usually enter a parabolic phase. For a long time, ETH/BTC has been in a downtrend, but from the current trend, it seems that this situation is reversing, especially since ETH/BTC bottomed out in November, it has risen nearly 30% in just three weeks. If the same script happens again, theoretically, the ETH/BTC exchange rate should not fall below 0.03, and based on the timeline, we may see better overall performance in the altcoin season in the first quarter of next year (2025). As shown in the figure below.

The fourth is Total2 (Total Market Cap Excluding BTC).

I remember in a previous article (August 13) we mentioned: the ideal state is that by early 2025 (first quarter), the total market cap of altcoins can reach above $1.2 trillion or higher, and then officially start a new round of altcoin season. As shown in the figure below.

However, this month (December), the Total2 value has already broken through this position and surged to around $1.6 trillion. As of the writing of this article, it is at $1.55 trillion. This may also be due to BTC breaking through the $100,000 mark earlier than expected and the recent "value return" rise of some old coins.

But our view remains unchanged. When Total2 breaks above $1.2 trillion, we believe it means a new altcoin season has begun. At the same time, our own goal will not change. When Total2's value breaks through $2 trillion, we will consider gradually selling the remaining altcoin positions in this cycle.

In summary, the short-term market may still face fluctuations, and some old issues regarding altcoins, such as high FDV and low circulating VC coins, insufficient ecological innovation, and the dilution of liquidity by a large number of new projects, have not been resolved. Although fundamentals often determine the price of an asset, sometimes the price may not necessarily listen to the fundamentals. Once speculation is in place and people start to FOMO again, as long as no major black swan events occur, the overall trend in the coming months is likely to remain good.

We are currently in the spring of the altcoin season, but do not be too greedy or aggressive, as the spring of altcoins can often become the winter for retail investors. Living longer is more important than living well in the short term; investing is a long-term and comprehensive practice.

Of course, the old saying still applies: different people have different positions, goals, and risk preferences, and everyone will have different strategies for entering and exiting. Therefore, it is necessary to reasonably customize and plan one's own entry and exit strategies. The content we have sorted out is merely a simple sharing based on data and ideas and cannot be considered investment advice. DYOR.