The perfect timing to enter Bitcoin is coming soon.

If you have reduced your position in Bitcoin in the recent price fluctuations, or if you have missed the opportunity to profit from Bitcoin altogether, don't worry. As mentioned earlier, on January 6th, liquidity will gradually return, the market will give a clear direction, and we only need to focus on the price behavior of Bitcoin, especially the price reaction near certain key levels.

First, looking at the 1-hour timeframe, the VEGAS tunnel is forming a possible golden cross, so we need to be patient, wait for the golden cross to form, and for bullish alignment and upward opening space to establish a bullish trend before taking action to enter. Moreover, in the purple shaded area, we can see that Bitcoin has been oscillating between 97,500-98,500 and occasionally testing lower levels. We also need to wait for Bitcoin's price to exit the purple shaded area and confirm a pullback before entering.

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f this is the case for smaller timeframes, what about larger timeframes? We can see that on the 4-hour timeframe, an opportunity to enter long under a bullish trend has already occurred. After the formation in the circled purple position, you can enter long, placing half of the stop-loss when breaking below the short-term VEGAS tunnel (144-169), and placing all stop-losses below the long-term VEGAS tunnel position (576-676). If the price near the long-term VEGAS tunnel does not break down, but rather recovers upwards, then you can consider adding to your position.

Bitcoin Bullish Signals, go long!

 

The Bitcoin daily candlestick closed above the daily Candlestick EMA20 level. As we mentioned yesterday, a successful breakthrough of the daily Candlestick EMA20 level is considered a bullish signal. With liquidity returning, Bitcoin may once again hit new highs in the near future. A more conservative approach would be to wait for the daily Candlestick to retest the daily Candlestick EMA20 level, demonstrate strong support, and then consider entering or adding to positions.

Looking up, the levels of 97770 and 98450 may act as strong resistance levels. We can see that last night, BTC faced resistance at the 97770 level with multiple 30-minute Candlesticks, which may have made many traders uneasy and opt for profit-taking, resulting in a price decline.

Safety first, dealing with the pain brought by profit retracement distinguishes traders with different styles.

How To Start Your Crypto Investment

Investing in cryptocurrency can be an exciting venture, but it requires careful planning and understanding. Before diving in, ensure your finances are in order: maintain an emergency fund, manage your debt levels, and ideally have a diversified investment portfolio. Cryptocurrency should be an additional asset in your overall strategy, aimed at enhancing your total returns. Here are five essential steps to consider as you start your crypto investment journey.

1. Grasp the Fundamentals of Your Investment

Before you invest, it's crucial to comprehend the specifics of what you're buying. Just as you would research a stock by reading annual reports and SEC filings, you must do the same with cryptocurrencies. With thousands of options available, each functioning differently, it's vital to grasp the investment case for every cryptocurrency you consider.

Many cryptocurrencies, like Bitcoin, lack tangible backing, relying instead on market demand. This means that potential returns depend on whether someone else is willing to pay more than you did. Understand the potential risks and rewards; investments not backed by hard assets or cash flow can become worthless.

2. Focus on Future Potential

New investors often make the mistake of using past performance to predict future results. While Bitcoin's price has skyrocketed from mere cents to thousands of dollars, the critical question is whether this growth will continue. Future returns depend on market dynamics and investor behavior, not historical trends. Focus on what could drive returns moving forward rather than past successes.

3. Navigate the Landscape of Volatility

Cryptocurrency prices are notoriously volatile, capable of dramatic swings within seconds, often triggered by mere rumors. This volatility can benefit seasoned traders who understand market fundamentals and can execute trades quickly. However, for new investors, this environment can be perilous. Many inexperienced traders get discouraged by rapid price changes, often resulting in buying high and selling low, contrary to the goal of "buying low and selling high."

4. Implement Effective Risk Management Strategies

Risk management is crucial, especially with volatile assets like cryptocurrencies. Your approach will depend on whether you're a long-term holder or a short-term trader:

Long-term investors may adopt a buy-and-hold strategy, refusing to sell despite market fluctuations.Short-term traders should set strict exit rules, such as selling if the asset falls by a specific percentage, to avoid greater losses.

It's wise to start by allocating only a portion of your trading capital, keeping reserves for future trades. Managing risk involves emotional challenges, such as the discomfort of selling a losing position, but it can prevent more significant losses down the line.

5. Invest Only What You Can Afford to Lose

Investing in cryptocurrencies should always involve funds you can afford to lose. If you need money for essential expenses, like a down payment on a house or upcoming purchases, keep it in secure accounts. For guaranteed returns, consider paying off high-interest debt instead; this ensures you save money effectively.

When investing, also prioritize the security of the exchanges or brokers you use. If you're uncomfortable with their security measures, consider using a crypto wallet for offline storage of your assets, protecting them from potential hacks.

Exploring Alternative Investment Avenues in Cryptocurrency

While direct investment in cryptocurrencies is popular, there are alternative methods to gain exposure:

• Crypto Futures: These allow you to speculate on Bitcoin's price swings using leverage, offering potential for high returns or substantial losses.
• Bitcoin or Ethereum ETFs: In 2024, the SEC approved several ETFs that invest directly in Bitcoin and Ethereum, providing a more straightforward way to buy crypto through traditional brokerage accounts.
• Crypto Exchange or Broker Stocks: Investing in companies like Coinbase or Robinhood, which profit from crypto trading, can be an interesting option.
• Blockchain ETFs: These funds invest in companies leveraging blockchain technology. While they may dilute your exposure to cryptocurrency, they still provide insight into the broader industry.
• Proprietary (prop) Trading: Prop trading involves trading financial instruments, including cryptocurrencies, using a firm's capital rather than your own. In this model, traders are typically employed by a trading firm and are given access to substantial capital to trade with. The firm provides training, resources, and technology, allowing traders to focus on strategy and execution.

Each investment method carries varying levels of risk and exposure to cryptocurrency. It's essential to understand what you're purchasing and how it aligns with your financial goals.

Conclusion: Building a Balanced Crypto Investment Strategy

Investing in cryptocurrency can be a valuable addition to your financial strategy, but it requires diligence, research, and risk management. By following these steps and exploring various investment methods, you can navigate the crypto market more effectively and potentially enhance your overall portfolio. Always remember to invest wisely, focusing on long-term growth and stability.

Bitcoin Analysis: Liquidity has not yet returned, it is better to observe quietly.

Just as yesterday's analysis, Bitcoin broke below the Trendlines and continued to drop, stopping near 91550, closing with a strong 4-hour bullish candlestick. Unfortunately, this strong rebound did not last. As of now, Bitcoin's price has dropped back to near yesterday's low. If there was a liquidity hunting behavior around 90250 last night, we can consider it as building momentum for Bitcoin's takeoff after the new year. However, from a liquidity perspective, since the holidays have not fully ended, there will likely be a significant return of liquidity around January 6 next year, at which time a new major market trend will emerge. If during this period the price quickly drops to 90000-91000 and rebounds rapidly, it may be a good time to Buy again.

Christmas Holiday is over, 2025 is approaching, how will Bitcoin trend?

 

During the Christmas period, the US stock market is closed, and European and American traders are also on holiday, resulting in a relatively calm market with no significant fluctuations. With the end of the Christmas holiday, Bitcoin once again fell below 94,000. From the current situation, Bitcoin's price is continuously testing the Trendlines, although the lows are slightly rising, there have not been higher highs, indicating that the Bitcoin buyers are relatively weak at the moment, and it is likely to break below the Trendlines and test the price range of 90,000 to 91,000. Of course, if Bitcoin strongly rises back above the 95,500 level and stabilizes after the backtest, then Bitcoin still has the potential to continue upward.

The Most Classic Trading Strategy: The Vegas Tunnel

More than a decade ago, a well-known hedge fund manager named Vegas publicly revealed his trading strategy, which he named the "Vegas Tunnel Trading Method."  If you don't have your own trading system yet, you might want to give the Vegas Tunnel a try.

Two Tunnels

The first set consists of the EMA144 and EMA169, while the second set includes the EMA576 and EMA676. Each set of exponential moving averages forms a tunnel during price movements, which is referred to as the Vegas Tunnel. This tunnel holds significant guidance for the medium to long-term price trends.

The Vegas Tunnel (144, 169) serves as a watershed for medium and short-term trends in the market. It can guide direction and act as support and resistance.

How did he find these numbers? The answer is the Fibonacci sequence.

The Fibonacci Sequence

The Fibonacci sequence is a series of numbers in which each number is the sum of the two preceding ones, typically starting with 0 and 1. The sequence looks like this:

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, ...

The Fibonacci numbers are often found in nature, art, and architecture, where they are associated with the golden ratio, approximately 1.618, which is derived from the ratio of successive Fibonacci numbers. This mathematical relationship is believed to represent aesthetic beauty and harmony.

 

Characteristics of the Vegas Tunnel Trading Method

1. Trend-following Trading: The Vegas Tunnel trading method is designed for trend-following, making it suitable for use when market trends are clear.

2. Clear Exit Points: This method provides well-defined exit points, allowing traders to accurately determine when to exit a trade to lock in profits or cut losses.

3. Filtering False Breakouts: The Vegas Tunnel trading method includes rules to filter out false breakout signals in the market, helping traders avoid common pitfalls and increasing the success rate of trades.

4. Easy to Learn: The rules and operational steps of this method are straightforward, making it easy for beginners to learn and master.

 

Filtering Signals

In defining the tunnel trading method, Vegas introduced the concept of breakouts.

What is the Concept of Breakout? A breakout occurs when the price moves beyond a predefined level of support or resistance, signaling a potential shift in trend. The filter line is represented by the 12-period EMA (Exponential Moving Average), which serves to filter out false breakouts in the market.

Role of the EMA12 Filter Line

The EMA12 acts as a filter to identify false breakouts. Here’s how it is applied:

• Conditions for Going Long: The price and EMA12 must simultaneously break upward through the EMA144 and EMA169 before considering a long position.
• Conditions for Going Short: The price and EMA12 must simultaneously break downward through the EMA144 and EMA169 before considering a short position.

This filtering mechanism ensures that we not only look at price breakouts but also reference the EMA12 signals to confirm the reliability of those signals. Only when the price and EMA12 signals align do we proceed with the trade; otherwise, it is regarded as a false signal.

 

Example of Filtering Mechanism Application

Bullish Signal Filtering: 

Suppose at a certain time, the candlestick price breaks above the medium and short-term Vegas Tunnel (EMA144 and EMA169).

If at that moment EMA12 does not simultaneously break upward through the tunnel, it is considered a false signal, and a long position is not entered.

Bearish Signal Filtering:

At another moment, the candlestick price breaks below the medium and short-term Vegas Tunnel (EMA144 and EMA169).
If EMA12 does not simultaneously break downward through the tunnel, it is also treated as a false signal, and a short position is not entered.

The Trump Crypto Era: How Cryptocurrency is Reshaping the Global Financial Landscape

In recent years, the cryptocurrency and decentralized finance (DeFi) sectors have experienced unprecedented growth. The attitude of traditional financial institutions (TradFi) and governments has gradually shifted from caution to active adoption. This transformation not only reflects how technology-driven financial innovation is reshaping the global financial landscape but also highlights the trend of cryptocurrency and traditional finance integration, driven by clearer regulations, growing market demand, and policy support.

Mutual Advancements Between Cryptocurrency and Traditional Finance

For a long time, traditional banks have been cautious about cryptocurrency. However, as market structures evolve and customers increasingly demand high returns and diversified investments, banks are beginning to realize that cryptocurrency is not just an emerging asset class but also a key opportunity to retain customers and attract new investors. Notably, during times of market turbulence, regulated financial institutions, with their stability and security, act as a "safe haven" for investors. For example, the 2022 FTX collapse prompted many investors to swiftly turn to regulated entities, underscoring the importance of trust.

At the same time, DeFi's flexibility and innovation provide inspiration for traditional finance. While some believe DeFi could replace traditional models, the reality is that traditional finance's market infrastructure and regulatory safeguards remain central to institutional liquidity and customer protection. In the future, the most likely trend is the fusion of the two, forming a "CeDeFi" (a hybrid model combining centralized and decentralized finance). This model will leverage DeFi's technological advantages while incorporating TradFi's compliance capabilities in KYC (Know Your Customer) and AML (Anti-Money Laundering), laying a solid foundation for the future of financial infrastructure.

Banks must seize this trend, collaborate with suitable partners, and proactively develop next-generation financial infrastructure. While providing flexibility, more efficient systems, and innovative financial products, they must also ensure the safety of customer funds and data. Banks capable of bridging these two worlds will undoubtedly occupy a crucial position in the future financial landscape, but they need to take action early.

The Role of Government Policy

In addition to being market-driven, policy support has also provided a powerful boost to the development of cryptocurrency and blockchain technology. Donald Trump, as the first global president to personally engage in cryptocurrency initiatives, further legitimized and formalized this sector with his policies.

During his presidency, Trump appointed several key officials, such as SEC Chairman Paul Atkins and "Crypto Czar" David Sacks, both strong advocates of cryptocurrency and blockchain technology. This team not only brought deep financial and technological expertise but also offered systemic support for cryptocurrency at the policy level. For instance, key members of Trump's administration were almost unanimously pro-crypto, including the Vice President, Treasury Secretary, and Director of National Intelligence, all of whom publicly expressed support for Bitcoin and blockchain technology.

More importantly, Senator Cynthia Lummis proposed the 2024 Bitcoin Act in response to Trump's idea of a "Bitcoin strategic reserve." This plan involves purchasing 1 million Bitcoins over five years through the Federal Reserve System and the Treasury Department to build a national Bitcoin reserve. This not only demonstrates the U.S. government's forward-looking stance on crypto assets but also provides a policy reference for other countries globally.

The Future Convergence of DeFi, CeFi, and Policy

With regulatory frameworks gradually improving and dual momentum from governments and institutions, the convergence of DeFi and CeFi will become a major direction for the financial industry. DeFi's technical components can deliver more efficient and lower-cost financial services, while CeFi's compliance and risk management capabilities provide essential safeguards for institutional investors and retail customers. This "CeDeFi" model will be the foundational infrastructure for future finance, and traditional financial institutions (such as banks) that capitalize on this trend will gain significant competitive advantages.

The Trump administration's supportive cryptocurrency policies further reinforce this trend. For example, the coordination between the SEC and CFTC, as well as legislation around Bitcoin reserves, provides policy assurance for CeDeFi's development. Additionally, with over 300 pro-crypto lawmakers in Congress, the long-term growth of this sector is backed by stable political support.

Conclusion: Act Now to Seize the Opportunity

Both traditional banks and policymakers must recognize the long-term potential of cryptocurrency and blockchain technology. For banks, simply "accepting" cryptocurrency is not enough. They must actively integrate into this emerging field by collaborating with the DeFi and blockchain industries to develop next-generation financial infrastructure. Simultaneously, government policy support acts as an accelerator for this process.

The future of cryptocurrency is not a simple replacement of CeFi by DeFi but a deep integration of the two. Financial institutions and governments that can seize the initiative in this process will occupy pivotal positions in the future financial landscape. The combination of TradFi's centuries of experience and DeFi's innovative capabilities will jointly build a more efficient, secure, and inclusive global financial system.