Christmas Week Market: Taking the Wind Out of the Sails

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1: December 24, 21:30 Initial jobless claims in the U.S. for the week ending December 20 were ( million ).

2. The Atlanta Fed expects Q4 performance growth

As we enter the Christmas week, both gold and silver have reached historical highs, and even the US stock market is smiling. However, cryptocurrencies are lagging behind, hesitating, and it can even be said to be quite bleak. Will Bitcoin still be able to benefit from this year's Christmas market? In yesterday's reference strategy, the main idea provided to everyone was still to focus on short positions, with the 3070 line above being the entry point for short positions. We mentioned a significant decrease in the number of Bitcoin addresses on-chain, indicating that short-term bearish sentiment has been relatively well released. Funds increasing their holdings of ETH have also seen some growth in the past few days, and both Bitcoin and Ethereum are expected to experience a nice rebound this week. **However, due to the new highs in gold and the stock market, a large amount of attention and liquidity has been attracted, making the crypto market seem less impressive. But I believe there will be some Christmas market activity; we may not get a large profit, but sipping on some soup shouldn't be too much of a problem. Figure 1 is for the Christmas holiday; don’t come asking Tommy why the market didn’t open at that time and make a joke.

From a structural perspective, Bitcoin is still in a wide-ranging rhythmic fluctuation market. 87000 is a key watershed in the past two days; I estimate that a direction will be chosen in the next day or two. Once it breaks upward, the only resistance level above is 92000 USD. If anyone wants to go long, consider entering conservatively at 86500 if it drops below 87000 USD today, which has been repeatedly emphasized as a key defensive position last week. Also, set a stop-loss at the previous low point. Clearly, this position is not suitable for shorting as its risk-reward ratio is poor. The same goes for Ethereum; a 4-hour upward trend line has formed. As long as it does not effectively break below the 2900 level, the rebound will continue. The strong resistance level above is at 3150-3200. Yesterday, it tested the resistance at around 3070. Theoretically, there is a good chance to rebound to the 3200-3300 USD range. However, we need to be cautious of the possibility of a false breakout at that time. (This key position of top and bottom conversion has been repeatedly mentioned in previous shares.)

Externally, from the perspective of other macro conditions, the weakening of the US dollar and the decline in US Treasury yields indeed provide a theoretically bullish environment for risk assets. However, the actual market choices have already provided answers. Observing on-chain data, there has been significant differentiation in ETF performances recently. The Bitcoin ETF recorded a net outflow of approximately $158.3 million, while the Ethereum ETF saw a net outflow of $76 million. In contrast, the XRP and SOL ETFs experienced slight inflows of $13 million and $4 million, respectively. This indicates that capital is undergoing some structural adjustments within the cryptocurrency market rather than an overall inflow. Last week, digital assets had a total net outflow of $952 million, marking the first net outflow after four consecutive weeks of inflows. This suggests that institutions have been reducing their risk exposure to digital assets recently.

Looking back at history, in 2012 and 2016, Bitcoin surged by 33% and 46% during the Christmas period, while other Christmas periods performed mediocrely. On average, from 2011 to now, Bitcoin's average increase during festive periods is only 7.9%. To sum it up in one sentence, the Christmas rally might have already started, but it has little to do with Bitcoin; the main battleground is gold, silver, and U.S. stocks, while crypto is like a stepchild. Although the panic sentiment has eased somewhat and there is a bit of action, it is likely not much, so everyone shouldn't have too high expectations. However, if we seize the opportunity well, we can still enjoy a good meal.

I am Tommy, bringing you the latest market insights and trading ideas every day. #BTC#ETH