Today, we are witnessing what we wrote about yesterday: a market correction is approaching, and it is important to remain calm and have a plan of action for such situations. Bitcoin is still holding firm at $97-98k, while altcoins have dropped by 20%, providing an opportunity for many to enter the market or average down their positions.
From December 9th to 10th, the total volume of forced liquidations in the cryptocurrency market amounted to $1.75 billion, including $1.57 billion in long positions, according to Coinglass. Liquidations were concentrated in altcoins — out of $1.75 billion, only $189.2 million was related to Bitcoin.
The altcoin season has dropped to 67 points, indicating that the altcoin season has likely ended for now. For us, the altcoin season is not a “false” breakout above 75 points but the ability to maintain those levels for 2-3 months and gradually move toward 80+ points.
A correction is a sign of a healthy market, a transition of coins from weaker hands to stronger, more reliable ones. Many indicators show that Bitcoin has not yet reached its maximum in this cycle, which suggests that after the correction, consolidation, and overcoming the psychological $100k mark, we could see new historical highs.
Reasons why Bitcoin could still rise:
1. First and foremost — the basic but important factor — supply and demand. The supply of the first cryptocurrency on the market is rapidly decreasing, while demand, at least from institutional investors, continues to grow. For example, at the beginning of the year, long-term investors’ holdings decreased by about 2 million coins, at the same time that M. Saylor and BlackRock were actively buying them.
2. Today is an important day for Bitcoin, as major players like Microsoft will make a decision about including Bitcoin in the company’s strategic reserve. Given the corporate race, we see no reason why this won’t happen and they will abandon this strategy.
3. Amazon shareholders are also pushing for the adoption of Bitcoin reserve strategy. If Microsoft gains the majority of votes, other tech giants such as Apple, NVIDIA, Google, Meta, and others will also start adopting this standard. It’s worth noting that, collectively, large corporations hold around $800 billion in cash, and part of this liquidity may enter the market, fueling further growth.
4. There is an 85% chance that the U.S. Federal Reserve will lower interest rates by 0.25 basis points on December 18th, which also indicates that money will become cheaper and both individual and corporate spending will increase.
5. Many countries are continuing or starting to adopt the Bitcoin standard and accumulate the first cryptocurrency in their reserves. While this is being done covertly for now, it will soon become public. Perhaps they want to buy it at favorable prices while they still have the opportunity.
There are many more arguments to suggest that the best times are yet to come. Stay optimistic in any scenario — whether the market is falling or rising. Only believing that you are on the right path will prevent you from leaving the market with empty hands and disappointment.
