The Rake Review: December

20.12.24 06:55 AM By Stormrake

A Year in Review

Our Christmas gift to you, an early Rake Review as well as a Christmas promotion. Read more to find out...

An Incredibly Volatile Month

December has been an exceptionally volatile month, featuring two major liquidation events, four new all-time highs, and an interest rate cut followed by a press conference from Jerome Powell that rattled global markets. But most importantly, Bitcoin hit $100,000 USD.

With less than three weeks of the month gone, the hope is that the Christmas period will stabilise the market and set Bitcoin up for another rally.

The month began with significant turbulence. December 5, the day Bitcoin hit $100k was also the same day Bitcoin experienced one of the largest liquidation events in recent history, plunging from a high of $104,000 to a low of $90,500—a 15% range in a single day. This resulted in $1.1 billion in leveraged positions being liquidated, marking the largest day for liquidations since August. The chaos escalated further on December 9th, with another liquidation event surpassing the first. Bitcoin corrected sharply from $101,200 to $94,100, wiping out $1.7 billion in leveraged positions in a single day. To put this in perspective, this liquidation volume exceeded that of the FTX collapse in late 2022.

Despite these setbacks, Bitcoin rebounded strongly. Finding support at the 25-day exponential moving average, it surged to new all-time highs for three consecutive days. The bullish momentum was a relief for Bitcoin investors, as the asset once again outperformed the broader market. Bitcoin dominance climbed, while many altcoins struggled to keep up. Notable exceptions included Ondo and Sui, which also set new highs. With an interest rate cut on the horizon and the historical "Santa Claus Rally" adding seasonal optimism, conditions appeared favorable for Bitcoin.

However, Jerome Powell’s post-rate-cut press conference shifted the tone. While the Federal Reserve delivered the anticipated interest rate cut, Powell’s remarks struck a hawkish note. Key takeaways included:

Persistent inflation remains a concern.
Projections for five interest rate cuts in 2025 were revised down to two.
The Fed plans to adopt a cautious approach to future cuts.
Uncertainty surrounds Trump’s upcoming policies.
The Federal Reserve reaffirmed its policy prohibiting Bitcoin holdings, with no plans to change this stance.

The market’s reaction was swift and severe:

The US dollar surged to a two-year high.
US stock markets shed $1.5 trillion in value.
Gold and silver dropped 2% and 5%, respectively.
Bitcoin fell over 4%, briefly dipping below $100,000.
Most altcoins suffered declines of over 10%.

All this unfolded within the first three weeks of December, leaving plenty of room for additional surprises in the remaining days. Historically, the Christmas period has been bullish for Bitcoin, and we remain optimistic about a positive close to the year.

As always, our long-term bullish outlook on Bitcoin is unwavering. Corrections should be viewed as opportunities to buy the dip, accumulate Bitcoin, and invest in high-potential altcoins at discounted prices. This strategy has consistently proven to be a formula for success.

What’s Next for Bitcoin in January?

January 2025 is shaping up to be a pivotal month for global markets, with events that could set the tone for the next four years. Most notably, Donald Trump’s inauguration on January 20th is expected to have a significant impact, particularly on Bitcoin.

The anticipated implementation of the Strategic Bitcoin Reserve shortly after the inauguration is likely to drive unprecedented demand from the US Government. This move could trigger a domino effect, as other nations may act preemptively by purchasing Bitcoin for their own reserves. Currently, many countries already hold Bitcoin:

El Salvador has been actively buying.
China and the UK have acquired Bitcoin through seizures.
Countries such as Bhutan, Saudi Arabia, UAE, and Qatar are mining or rumored to be accumulating Bitcoin.

There is increasing speculation that sovereign Bitcoin purchases by Middle Eastern nations could intensify. Once the US government begins its acquisitions, other major countries are likely to follow, potentially igniting a global race to lead in the crypto space.

Before Trump's inauguration, FTX, the collapsed exchange, is set to begin repayments starting January 3rd. The first batch of customers will receive compensation in USDT or USDC. It is highly likely that a significant portion of these funds will stay within the crypto ecosystem, flowing into assets like Bitcoin, Ethereum, and other altcoins. This development serves as another bullish catalyst to kick off the year on a strong note.

From a market cycle perspective, January is still early in the bull run. Bitcoin remains dominant, with Bitcoin dominance flipping bullish as Ethereum and other altcoins struggle to consistently outperform. This aligns with phase one of the bull market cycle, where Bitcoin historically leads the charge.

The trajectory for January will depend heavily on how December concludes. Two scenarios stand out:

Bullish Close to December: If Bitcoin reclaims its short- and medium-term bullish structure and trades back above $100,000, further all-time highs in the $110,000–$120,000 range are likely in January.
Bearish Close to December: A deeper correction could see Bitcoin trading closer to $75,000 as we enter the new year.

Barring any black swan events or unforeseen developments in December, the long-term outlook for Bitcoin remains firmly bullish. Deeper corrections should be embraced as opportunities to strengthen Bitcoin positions and accumulate strong altcoins at discounted prices.

A Timeline of Key Events that Shaped Bitcoin

A clearer view of the chart above can be found here: https://www.tradingview.com/x/ve1vEvwc/

Opening the Year Strong at $42,200
ETF launch Jan 11 ($46.6k)

All time high March 14 ($73.8k)

Bitcoin halving April 20 ($64.4k)

8 month consolidation (Between $50-$70k)

Mt Gox Repayments, German Government and US DOJ mass selling of BTC

Early July ($53.4k low)

Trump’s speech at Bitcoin 2024 29 July ($70k)

Yen carry trade 5 August ($49k low)

Jackson Hole Symposium 26 August ($65k)

Dovish Jerome Powell saw risk on assets rally

First Trump Assassination - Trump Pump

Marked the low at $52.5k and rallied to $67k in three weeks,

October - ‘Uptober’

US Election; Trump wins, ATH arrives November

Further momentum

$100k Dec

Powell hawkish speech sub 100k

2025; Time for the Real Bull Market

2025 is shaping up to be a landmark year for Bitcoin and the broader crypto market. Based on the timing of this bull cycle, we expect the peak to occur later in the year. As highlighted earlier, we are still in the early stages of the bull market, with a blow-off top and full-scale altseason yet to unfold.

One of the most anticipated events is Trump’s inauguration in January, which is expected to initiate the Bitcoin Strategic Reserve shortly thereafter. This policy will see the US Government purchase 200,000 Bitcoin using existing funds, creating an unprecedented surge in demand. Such institutional buying pressure will likely trigger a historic rally. For a detailed analysis of the Bitcoin Strategic Reserve, refer to our previous Rake Review article.

While we are deeply bullish on Bitcoin—it should be the cornerstone of any crypto portfolio—we’ve also identified several altcoins with the potential to lead the market during the altseason. Many of these have already delivered impressive returns, as covered in our daily Morning Notes and Thunder Trading articles. However, with the bull cycle still in its early phase, these coins have significant upside left. Among our favorites are SUI, ONDO, SOL, and FTM, to name a few. For the complete list, reach out to your Stormrake Broker.

A key metric we use to assess market positioning is the MVRV Z-score (Market Value to Realized Value). This indicator compares Bitcoin’s market value (black line) to its realized value (blue line), with the Z-score (orange line) highlighting standard deviations between the two. Historically, the Z-score’s green band signals market bottoms, while the red band signals tops. Currently, the Z-score remains in the lower half of the chart, far from the red band. This strongly suggests that the peak of this bull cycle is still a long way off.

Finally, it’s essential to emphasise that there is never a bad time to buy Bitcoin. Over its lifetime, Bitcoin has proven to be one of the best-performing assets, with every holder who kept their Bitcoin for four years or more always ending up in profit. A common mistake among investors is attempting to time the market and overtrading. The reality is that time in the market always beats timing the market. Instead of waiting for a dip that may never come, it’s better to accumulate Bitcoin consistently.

This advice is especially relevant as Bitcoin nears all-time highs—its price tag can be intimidating, but sitting on the sidelines often leads to missed opportunities. To delve deeper into how overtrading can lead to underperformance, check out our detailed Thunder Trading article here.

Market Update

Here is the fast five of what you need to know about the market in December 2024:

Bitcoin is currently up 0.60% from the open…
XRP reaches 4th in overall market cap after being 3rd for a brief time
Cardano jumps Lido Staked Ether to move into 9th
Solana falls from 4th to 6th largest crypto
ISO tokens continue to be the dominant category, HBAR, XRP, ALGO and XLM leading.

Video of the month

A snippet from Jerome Powell's Hawkish Speech

Bitcoin and Ethereum ETF Performance:

All throughout December the net flow of money in Bitcoin and Ethereum has remained positive for every consecutive day. This exemplifies the positive market sentiment about the new securitisation of digital products on established exchanges.

Stormrake Morning Notes and Thunder Trading Hits

One of the standout achievements of the year has been the revival of our Morning Notes and Thunder Trading articles. These research pieces have provided clients with invaluable insights into the markets, particularly crypto projects we identified as undervalued.

Clients can tailor their engagement by opting to receive just the Rake Review, Morning Notes, Thunder Trading, or a customised combination of these updates, this can be done by clicking HERE.

Morning Note (DAILY PUBLICATIONS)

Our Morning Notes are concise, 3–5-minute reads delivered to subscribers six days a week. Each note includes:

Daily Market Analysis: A snapshot of market movements and relevant events impacting short-term prices.
Stormrake Spotlight: A feature on a specific coin or project we believe to be undervalued. These picks have consistently yielded impressive returns for those who followed.
Short-Term Bitcoin and Ethereum Analysis: A technical overview of key price levels and trends to watch.

Thunder Trading (TOPICAL PUBLICATIONS)

Thunder Trading articles dive deeper, offering in-depth research on specific projects, migrations, or significant events affecting the market. Some of our most notable Thunder Trading pieces this year include:

The Yen Carry Trade and its market impact.
The Mt. Gox repayments and mass Bitcoin sell-offs by the US DOJ and German government.
The introduction of Ethereum ETFs.
Educational insights, such as overtrading and its impact on underperformance.
A project-focused deep dive on Sui, which was a major hit with clients.

The Sui article was particularly well-received. Subscribers who followed our analysis were able to purchase Sui at prices below $2. With its recent all-time high just under $5, the project continues to show potential for further rallies. For a comprehensive look at why we remain bullish on Sui, read the full article.

To explore our published Thunder Trading articles, click here, and to stay ahead of future editions, make sure to opt-in and subscribe.

Majority coins in the Stormrake Spotlight have been quite successful, below is a full list of coins that have featured in the Stormrake Spotlight and their performance since featuring.

**figures at time of writing 19/12/2024*

Since launching the Stormrake Spotlight in September, 13 coins have been featured, each delivering peak returns of at least 15% above their initial mention. Notably, eight of these coins remain comfortably in profit.

Top Performers

Five coins (FTM, SUI, GOAT, DOGE, ONDO) have achieved returns well over 100% since being featured.
Four of these still remain above 100% from their first mention.
WIF and SOL narrowly missed the 100% milestone, peaking at 97% and 92%, respectively.
ETH and TAO peaked at 55% and 73%, respectively, meaning nine of the 13 coins have delivered over 50% returns.

To ensure you don’t miss out on future opportunities and the exceptional returns from Stormrake Spotlight, subscribe to the Morning Notes on Substack here. SUBSCRIBE

STORMRAKE'S CHRISTMAS GIFT TO YOU

Thank You for an Incredible Year!

As the year comes to a close, we want to express our gratitude for being a valued part of our community. Your trust and support have made 2024 an amazing year, and we’re excited to help you achieve even greater milestones in the year ahead.

As a token of our thanks, we’re giving you a special end-of-year bonus:

For every AUD$10,000 worth of Bitcoin you purchase with Stormrake, we’ll gift you AUD$20 worth of Bitcoin.

It’s our way of saying thanks for choosing us as your trusted partner in crypto.

This exclusive offer is available until December 31, 2024, so don’t miss out!

Terms & Conditions

This promotion is valid from December 21, 2024 to December 31, 2024, 11:59 PM (AEST).
Bonus Bitcoin is awarded at a rate of AUD$20 for every AUD$10,000 worth of Bitcoin purchased in a single transaction.
Bonus Bitcoin will be credited to your account as part of the qualifying transaction.
Transactions canceled or refunded will not qualify for the bonus.
Standard trading fees apply.
We reserve the right to amend or withdraw this promotion at any time without prior notice.

Written by Alexandar Artis

Memes of the month

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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