Master Discusses Hot Topics:

Today, let's talk about the US Dollar Index, as it has a significant correlation with US stocks and the cryptocurrency market. Although US stocks and the crypto market seem to be doing well for now, the Dollar Index has quietly surged above 109, just a step away from breaking 110.

I vaguely remember that in 2022, the Dollar Index peaked at 115. While we can't say we are fully in a bear market yet, it's clear that market risk appetite is declining.

I have mentioned several times that the market in 2025 can only be navigated step by step, especially in the first quarter. Perhaps due to the emotional impact of power transition, the market can still catch its breath a bit. However, once we enter the second quarter, it will depend on Trump's support for Bitcoin.

Currently, Bitcoin has retraced from 99964 to 91530, and this short-term pullback can be confirmed as having ended. If it rebounds to the range of 99k to 102k, only then can we consider the decline since 108k to be officially over.

Additionally, altcoin trends still rely on Bitcoin's lead, such as SOL or ETH. After all, Bitcoin is in the lead and is driving the first half of this market cycle. Ignoring all external distractions and looking purely at sentiment and human nature, the second half of the market has yet to begin. Without sufficient sentiment, a true altcoin bull market cannot materialize.

Although Bitcoin's price has risen significantly in the past two days, trading volume has not kept pace. The turnover rate is still clearly declining, indicating that market liquidity has not improved, which I had anticipated. We will have to wait until next week to see a clearer direction.

In fact, aside from Bitcoin, the market is basically calm. Coupled with the rising Dollar Index mentioned at the beginning, the likelihood of a cooling market risk appetite is increasing.

Moreover, I am personally uncertain whether Bitcoin's rise is due to the IRS delaying cryptocurrency tax policies, as I haven't seen any particularly positive news aside from that. Additionally, US stocks related to cryptocurrencies have also seen some pullbacks, so I do not currently believe this is the beginning of a new surge.

Returning to Bitcoin's trend, retail investors who were at a loss have mostly reduced their holdings. After today's rally, some profit-taking investors are starting to exit the market. This kind of volatile market is indeed more suitable for short-term traders.

According to the current support data, the previously mentioned level around 95k remains relatively stable. The recent days' oscillation trend aligns with expectations, and we can reassess whether to adjust the support level after next week.

Another key point now is that if US stocks continue to decline after opening tonight, can Bitcoin and Ethereum still rise independently, especially without new positive stimuli? Of course, this is not me being bearish; I just personally believe the market will maintain a large range of oscillation, and we will have to wait until after next week to see a clearer direction.

Master Looks at Trends:

Resistance Levels Reference:

First Resistance Level: 97800

Second Resistance Level: 97300

Support Levels Reference:

First Support Level: 96700

Second Support Level: 96000

Today's Suggestions:

Bitcoin has recently stabilized in the 93K range, gradually settling around 94~95K. Due to reduced profit attraction, along with new liquidity and capital inflows, significant volatility is expected in the market before Trump's inauguration on January 20.

If this year's Bitcoin regulatory policies and institutional entries become clearer, it is also expected to welcome a significant surge due to increased capital inflows. If the price stabilizes around 97.1~97.3K and breaks the descending trend line shown in the chart, we can preliminarily conclude that the 4-hour trend is likely to reverse.

Although there have been signs of trend breakdown on the short-cycle chart, it is still holding the previous high points. The second support at 96k is also a previous high area and represents an opportunity for ultra-short-term low-position buying.

If a rebound occurs and the market consolidates at high levels, it is recommended to set the lower support line as a stop-loss in the short term and look for ultra-short-term entry opportunities. When the trend consolidates at high levels, this is usually a positive signal for the upward trend, and attention should be paid to the situation of the lower support line during the day.

1.3 Master’s Band Trading Strategy:

Long Entry Reference: Light long positions in the 95400-96000 range, Target: 97300-97800

Short Entry Reference: Not applicable for now

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