Did Jerome Powell, chair of the FED just cancel the crypto bull run? Or is this your final call? In other words, there will be no Bitcoin reserve, correct? And this statement shook the entire crypto market. Take a look at this Cryptobubbles chart. But, President-elect Donald Trump definitely has a different plan. He might not appoint Powell as the chair of FED because Powell does not fit into President Trump’s great plans for crypto.
There seems to be a lot of panic selling going on. But did yesterday’s market carnage create a Buy the Dip opportunity for us? Which altcoins will recover the fastest from this dip? And which altcoins am I buying?
Why Do We Have This Market Correction?
The FOMC or Federal Open Market Committee is only one of the reasons for this market carnage. And, in all fairness, the market was also a bit overheated. A cooling-off period seems to come at the right time. And I plan to make the most of this dip by filling up my altcoin bags. I will come to my altcoin pick real quick, but first let’s take a look at what happened yesterday.
As I mentioned before, there are a few reasons why this market correction takes place. The Fed is surely part of it. So, the Fed CAN’T hold Bitcoin. But the US Treasury can. I’ll show you more on this in a second.
One thing Powell achieved, though, is that people started to panic. That’s only two weeks after he said that Bitcoin is like digital gold.
However, let’s take a closer look at what happened with the FOMC. For starters, the Fed didn’t pivot on their balance sheet yet. Such a pivot is important for financial markets. It would show a notable change in the monetary policy of the Fed. For example, it can influence,
Interest rates.
Stock prices.
Economic growth.
The Fed slashed the benchmark interest rate by 25 basis points (bps). No real surprise there, to be honest. Powell also mentions slow rate cuts in 2025. This seems like it’s good news.
The Federal Reserve has officially cut interest rates by 25bps.
But the reality is, this is why over $1.5 trillion in value disappeared overnight. Lower interest rates mean borrowing costs go down and that’s bullish for all “risk” investments like stocks, Bitcoin, and crypto.
So slowing down the pace and number of rate cuts now looks LESS bullish for the market compared to other lower risk investments. And thus, some panic selling. But the effect is probably short-lived.
I also mentioned the overheated market, right? So, you can also see it as a shakeout. 1 This is the time to hodl. Hodl means to ‘hold on for dear life’. This is NOT the moment to panic sell. Instead, you need diamond hands in these market conditions.
Those in the know are buying. Here’s a sample, BlackRock bought $132M more $ETH.
While people are panicking, Blackrock bought $132M more ETH on this dip.
Trump’s World Liberty Fi (WLFI) bought too. This time more Ethena ($ENA) to the tune of $250k.
And staying on theme, World Liberty is getting deep into DeFi. That’s where the first of my altcoins is, too.
Chainlink ($LINK)
Chainlink has a lot going for itself. It’s the leader in the oracles sector. Trump’s WLFI bought $2 million worth of $LINK.
DeFi is heating up again and showing lots of strength in the market. And every DeFi protocol needs an oracle. Many choose Chainlink.
When in doubt, zoom out. Look at this Bitcoin chart. $BTC is still above $100k and only 6% away from a new ATH.
Rate cuts are happening all over the world, not only in the US. This is positive news, as mentioned before.
That leads to our 2nd coin today. Rate cuts are great for risk-taking projects like Solana.
Solana ($SOL)
Solana has been weaker than usual recently. However, this is bound to be temporary. For example, during November, 55% of all crypto users in the world were on the Solana network.
And Solana is more than just the home of the memecoin casino. But if you think memecoins will continue growing, SOL is the place to be. Low rates are great for investing in projects like SOL.
There’s already a proposal for Bitcoin Reserve as an Executive Order. Trump only needs to sign it in January. It looks like a temporary blip, so we are looking to buy.
BREAKING: A first draft of an Executive Order for a Strategic #Bitcoin Reserve has been published
So, your question is which altcoins to buy during this dip. Well, stay true to high-conviction coins. These altcoins should also have strong fundamentals.
We already mentioned $LINK and $SOL. Both of which we like a lot. Here’s the third.
Thanks to our new partnership with @satlayer, Bitcoin DeFi on Sui is no longer a dream.
This partnership, paired with @babylonlabs_io‘s infra, enables Sui to connect Web3 community with Bitcoin, setting the stage for BTC-backed innovations. pic.twitter.com/55O8HS6ydv
Sui and its many lucrative airdrops for its ecosystem projects Like Bluefin, Suilend or Walrus, which is going on now, will keep people actively buying Sui for some time.
So, did you panic sell some of your assets? Your portfolio may have taken a hit today, but don’t get shaken out! What is your expectation of Bitcoin’s top during this run?
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.
We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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(@cryptomartinray) December 19, 2024
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