Addresses holding 10-1000 bitcoins exceed 150,000

Source: Talking Li, Talking Outside

In the days following the Federal Reserve's interest rate meeting (Beijing time, December 19), as the market experienced a phase of correction, many people began to panic. Coupled with some KOLs seizing the opportunity to attract traffic, stating that the market would head towards $80,000 or even lower, some friends chose to exit once again and handed over their chips under such circumstances.

In the articles over the past few days, we have generally advised everyone to manage their positions well and maintain calm and rationality. For example, in the article discussing the market topic a few days ago (December 22), we outlined 4 bullish factors and 3 bearish factors, and mentioned in the article that the probability of Bitcoin dropping below $90,000 this month should be low, unless a new black swan event or significant negative news occurs.

In the past few days (December 19-26), Bitcoin's fluctuation range was around 13%, and we don't know how many people were shaken out during this volatility.

To briefly review the recent articles on market topics from Talking Li, Talking Outside, we have actually organized quite a few dimensions of thought, including:

• In the article on December 24, we outlined 5 macro factors.

• In the article on December 22, we outlined 7 price influencing factors based on macro and data perspectives.

• In the article on December 20, we outlined 6 price factors based on intuitive feelings.

The reason for organizing these dimensions is, on one hand, to allow ourselves to reorganize relevant data, and on the other hand, to hope that everyone can have a more macro directional understanding and continuously form and refine their thoughts based on their own position situation. Otherwise, it can be easy to be influenced by various KOLs or analysts' opinions, leading to frequent operations resulting in losses or panic selling that directly causes one to be shaken out. We still say that short-term market movements are unpredictable; do not change your position operations casually based on others' comments. If you cannot strictly execute your trading strategy, then the best operation in these days is to do nothing.

When the public generally holds a bearish view, the market often rises. Only when the public does not anticipate it will we see Bitcoin at $110,000 or even higher; the market is often so ruthless and counterintuitive. In this process, only a small number of lucky, highly professional, or sufficiently patient individuals can wait for the flowers to bloom.

In less than 6 days, it will be 2025, and the market continues to change in real-time 24/7. Currently, the price range of $92,500 - $100,500 seems to be a good short-term psychological price range for this week, unless a new black swan event occurs in the next few days to break this range. If you are looking forward to a new market, it might be better to wait until the first quarter of next year to see the situation; these days, it’s better to take a good rest.

However, Talking Li, Talking Outside does not plan to rest, as we still have several execution plans in the last days of the year:

First, we plan to officially launch the fourth e-book "Blockchain Methodology" (Volume II, about 280,000 words) on December 30, and we are currently working hard to summarize and organize the content.

Second, we plan to release a "Talking Li, Talking Outside 2024 Year-End Summary Album" on December 31, and the images are currently being designed and formatted.

Having discussed the plans, let's continue to organize some thoughts based on the series of topics from the past few days and see what other dimensions of thought can assist in judging the overall market direction:

1. US Dollar Index (DXY)

The US Dollar Index (of course, you can also pay attention to the Yen Index, etc.) is one of the macro indicators we regularly focus on. In previous articles from Talking Li, Talking Outside, we mentioned that typically, a rate cut by the Federal Reserve will lead to a weakening of the dollar index, which usually means it is favorable for risk assets like stocks, gold, and Bitcoin. In other words, once the dollar weakens, it makes risk assets like Bitcoin more attractive to investors, potentially leading to a new round of price increases for Bitcoin.

Currently, it seems that the dollar is once again approaching a short-term relative high point. There is a certain probability (85-90%) that a reversal may occur. Historically, Bitcoin and the dollar index often exhibit an inverse relationship, meaning that a weaker dollar frequently leads to an increase in BTC's purchasing power, as shown in the figure below.

Of course, considering that it is the end of the year and various other factors like taxes, this inverse relationship may not always be so pronounced. But the basic logic remains unchanged: as long as the dollar does not weaken, high-risk assets like Bitcoin are likely to experience stagnant or continued downward trends, unless events that can directly impact market sentiment occur (like this year's ETF approvals or institutions like MicroStrategy continuously buying).

2. Seasonality

While different people may have different views on the concept of "carving a boat to seek a sword," from a certain perspective, historical data often serves as an intuitive and comprehensive reflection and result of the market and human nature. Therefore, we can appropriately pay attention to the performance of seasonality.

Statistical data shows that since 2015, when Bitcoin rises in November, it often also rises in December. As shown in the figure below.

So let's make a simple assumption: if this seasonality continues this year, based on the average performance of around 12% in December from previous years, the theoretical closing price of Bitcoin in December this year would be approximately $107,500. This means that unless a new black swan event occurs in the next few days causing Bitcoin to plummet, it will not change the overall trend. Of course, this seasonality dimension is not rigorous enough, as history cannot 100% accurately represent the present and future; we can treat it as a simple reference.

3. Global Money Supply (M2)

Compared to the DXY mentioned above, M2 reflects data that may be more macro-oriented. From the current situation of M2, since September of this year, the global money supply has begun to shrink, with year-on-year growth rates slowing, indicating some downward pressure. As shown in the figure below.

Moreover, we can also find that high-risk assets like Bitcoin react strongly to changes in liquidity, but due to the lagging nature of this data indicator (i.e., Bitcoin's response to M2 changes usually lags by about 2-3 months), we can only use liquidity contraction as one of the auxiliary judgment indicators for trend changes.

Currently, it is speculated that in the first quarter of 2025 (roughly starting in February or March next year), we may experience some new changes in the market (note that this refers only to changes, and the specific magnitude cannot be determined). However, during this period, we may continue to face a period of adjustment (approximately 5-8 weeks), and it is also possible that during the adjustment period, Bitcoin may attempt to challenge new ATHs (such as around $110,000). This position is also our originally planned second operation, and if reached, we will sell 10% of our holdings. This is not to be taken as any operational advice; DYOR.

Of course, this is only a judgment based on the single historical data dimension of M2. We may also need to consider other factors, such as a shift in the Federal Reserve's monetary policy or large-scale institutional adoption, which may also prompt a certain decoupling of Bitcoin from M2.

In summary, it still comes down to this: short-term markets cannot be accurately predicted. If you hope to profit quickly through short-term operations, you need to combine various factors you consider effective (such as macro expectations, policy expectations, indicators, news, etc.) to execute your risk strategy. However, if considering from a longer time dimension (ignoring the intermediate volatility process), today's Bitcoin is still the cheapest.

At the end of the article, let's take a look at the current distribution of Bitcoin wallet addresses and see which range you currently fall into:

• There are 50.17 million addresses holding 0--0.1 BTC

• There are 4.31 million addresses holding 0.1--10 BTC

• There are 150,130 addresses holding 10--1,000 BTC

• There are 2,050 addresses holding over 1,000 BTC

What we need to do is actually just one thing: set a phased long-term goal for ourselves and strive to become part of the last two groups of data in the image above.