Market on 02/01/2025: Is the wave of correction over?

BTC bullish divergence signals on the H4 frame have appeared, this is an indication that the sell side may be weakening, with confirmation from both the RSI and MACD indicators.

Specifically, although the price set a new bottom lower than the previous one, the RSI and MACD showed higher bottoms, a clear demonstration of the emergence of a bullish divergence signal.

It was this that contributed to the price of BTC from $92,000 to $96,000 at the time of writing. In the near future, if the price of BTC on the H4 frame exceeds the $100,000 mark, the market will most likely return to a state of greed, thereby attracting capital inflows from outside investors into the market.

According to historical cycles, BTC market share in the near future is likely to decline, giving way to altcoin growth, thereby creating opportunities for altcoins to benefit.

Typically, BTC market share tends to plummet around 33 weeks after the halving event. This phenomenon seems to be recurring as, starting from the 34th week, BTC market share has shown marked signs of decline.

On the H4 short-term timeframe, if the dominant share of BTC falls below 57.4% it will confirm the current bearish structure. From there, the BTC market share is likely to enter a downward trend after a series of increases that lasted from December 4, 2024 to the present.

The altcoins are expected to benefit as market capitalization began to rise since the 38th week following the BTC halving event, combined with the decline in BTC's market share, as already mentioned in the previous article.

Since December 2024, the level of interest and the FOMO effect of investors has decreased markedly, resulting in the market only sideways or falling in short-term waves. This is shown by keyword search data on Google Trend: the number of searches for “Bitcoin” (in red) has dropped from 100 to 47, while “Crypto” (in blue) has dropped from 33 to 22.

This drop is also a signal that the crowd has significantly reduced the level of greed, especially during the recent market correction period, which directly affected altcoins.

However, by the first quarter of 2025, it is possible that the upward wave will return as ETH's growth rate usually increases sharply during this period, and ETH in particular may be the driving force behind the rise of layer2, LSD, and DeFi tokens.

According to the results of performance statistics, ETH grows by an average of 23-32% in January each year, which is quite positive information.

The ETH/BTC chart also shows that the RSI bullish divergence signal is back and confirmed once again, thus opening the possibility that ETH will outperform BTC in the near future.

Therefore, in the short term, the adjusted wave rhythm may have ended. However, since this is a small timeframe, the market is still likely to be disturbed and large fluctuations occur. Overall, altcoin bullish waves in 2025, especially in Q1, are more likely to take place.