Bitcoin falls below $90,000, retail investors panic, Ethereum faces ongoing FUD, MicroStrategy continues to accumulate $243 million in Bitcoin
Source: Talking About Li and Beyond
Last night (January 13), I wonder how many people couldn't sleep. Bitcoin dropped to around $89,000, seemingly breaking through many people's short-term psychological levels. As shown in the figure below.
However, a strong rebound soon occurred. As of the writing of this article, the price of Bitcoin has recovered to around $95,000, with a fluctuation of $6,000 overnight, resulting in over $200 million in liquidations. As shown in the figure below.
Compared to Bitcoin, the situation for Ethereum seems worse, having briefly dropped below $3,000, hitting a low of around $2,900, with a weak rebound. As shown in the figure below.
With the new round of market fluctuations, I noticed that many partners have been more focused on FUDing Ethereum since yesterday. Perhaps, the performance of ETH so far has indeed disappointed many partners. Moreover, there has been a considerable amount of negative news regarding Ethereum for quite some time, such as the sell-off by Vitalik Buterin and the Ethereum Foundation (although the amount sold was not large, it generated a lot of negative sentiment), the lack of innovation in the Ethereum ecosystem, and so on.
However, personally, I still remain optimistic about Ethereum. Not to mention the long term, after all, ETH is currently the only cryptocurrency besides BTC that has been approved for a spot ETF. Perhaps we need to continue to have a bit of patience with Ethereum.
Interestingly, on January 13, MicroStrategy once again increased its holdings by purchasing 2,530 Bitcoins for $243 million, with an average purchase price of $95,972. This has brought MicroStrategy's total Bitcoin holdings to 450,000, with an average purchase price of $62,661.78. As shown in the figure below.
On one side, retail investors are panic-selling, while on the other side, institutions are continuously accumulating. The two form a stark contrast.
Looking at the recent market conditions, the pressure seems to be more influenced by macroeconomic factors, such as:
The DXY is rising (it peaked around 110 yesterday)
U.S. Treasury yields are increasing (the 10-year Treasury yield is nearing 5%)
The U.S. unemployment rate is decreasing
The U.S. CPI is rising
And so on…
All these macro signals seem to be prompting some funds (investors) to shift to a risk-averse mode, which explains the significant fluctuations in the financial markets (including the crypto market).
However, there is also a critical upcoming time point: Trump is about to take office (the inauguration ceremony will be held on January 20, Eastern Time). Therefore, some people speculate whether the market fluctuations on Monday (when the U.S. stock market opens) might be due to some manipulation behind the scenes.
The general script for the manipulation is as follows:
Before Trump takes office, make some necessary corrections to the market to avoid excessive volatility during Trump's inauguration. In simple terms, if the market rises due to expectations of Trump's inauguration but then falls immediately after he officially takes office, such a result would not be conducive to stabilizing the situation.
Conversely, if the market adjusts before Trump officially takes office, and then experiences a relatively good upward trend following his inauguration, this would both increase people's trust in Trump and be beneficial for stabilizing the situation.
Of course, this is just a hypothetical script from others; we are merely speculating and indulging in imagination here.
In the previous article on Talking About Li and Beyond (January 13), we mainly discussed the topic of exiting a bull market and shared how to design your own exit indicators. The point of the article remains: we should strive to form and establish our own trading systems, rather than being swayed by news and emotions. Trading also requires consideration of cycles; if your goal is 10 or 20 years into the future, then Bitcoin at this moment is not expensive no matter when you buy.
Having discussed the basic market conditions, let's continue to talk about Ethereum, which is currently being FUDed daily.
I remember in previous articles on the topic of Ethereum, we mentioned that factors such as capital inflow, continuous accumulation by whales, and ETH staking would collectively support the price outlook for ETH. So, let's continue to explore a few dimensions based on this logic:
First, let's look at the inflow/outflow situation of ETH ETFs in recent days. Since last week (January 7), ETH ETFs have seen continuous capital outflows, which is certainly not favorable for Ethereum's price performance from a sentiment perspective. As shown in the figure below.
Next, let's examine the K-line trend. Currently, the price has dropped close to the 0.382 level, and the weekly MACD has begun to show a crossover, indicating that short-term fluctuations are likely to continue. As shown in the figure below.
Furthermore, let's check the ETH balance on exchanges. From on-chain data, the amount of ETH stored on trading platforms has entered a phase of decline again, which may reflect some funds' optimistic views and confidence in Ethereum's future. As shown in the figure below.
In summary, at this critical position and time point, there seem to be two distinct camps regarding Ethereum: one camp continues to be optimistic about Ethereum's future performance, believing this position is an opportunity to accumulate more. The other camp believes that Ethereum's current bull market is completely over, and it would be better to clear out Ethereum as soon as possible.
As for how you view and choose, we won't interfere or provide any specific trading advice, but if you often read articles from Talking About Li and Beyond, you should know our answer.
Additionally, from a fundamental perspective, Ethereum remains a cornerstone of the DeFi ecosystem, accounting for about 82% of TVL. As shown in the figure below.
However, currently, Ethereum is indeed lagging behind ecosystems like Solana and Sui in terms of Daily Active Addresses, Daily Transactions, and Dex Volumes. As shown in the figure below.
Moreover, the deflationary effect that many anticipated after Ethereum's upgrade does not seem to be significant at this point. As shown in the figure below. Meanwhile, with the increasing popularity of L2, there are concerns that Ethereum may slowly fall into a predicament where the ecosystem remains prosperous but the value realization of its tokens continues to decline.
However, it cannot be denied that ETH remains second only to BTC. As long as Ethereum can find a new balance in L2 expansion and other narrative waves, the price will naturally not be an issue. Let's allow the bullets to fly a bit longer.
Or to put it more bluntly, the price of ETH in this bull market is unlikely to stop around $4,000. Here, I directly quote a line from our previous article: as a cryptocurrency that does not face unlocking and miner sell pressure, a coin that is still the king of altcoins, a coin that remains the largest crypto ecosystem, and the only cryptocurrency besides BTC that has been approved for an ETF… we may need to maintain some patience with it.
