After the Fed's expected rate hike, BTC price was revised downward along with the US stock market. This week, with the start of the Christmas and New Year holidays, the global equity market trading was sluggish, still following the trend set last week.
BTC opened at $95,091.15 and closed at $93,563.35, recording a 1.60% decline for the week, with a range of 7.91% and a significant decrease in trading volume.
As the new year approaches, major global investment banks have released reports on the outlook for the 2025 economy and investment market. Overall, the outlook is optimistic, but there are also negative views.
Macroeconomic and Financial Data
After the Fed's dovish pivot last week, the three major US stock indexes saw significant adjustments last week, and have gradually recovered this week, but fell again on Friday. Overall, the three major indexes recorded weekly gains and are still in an upward structure, but the downward correction triggered by the expected rate hike adjustment will take time to be resolved.
Last week, the US dollar index rose to a high of 108.549, and this week it maintained high volatility, closing at 108.029. The US dollar continued to rise against the Japanese yen, but the Bank of Japan stated that it may still raise rates in January. This further increases the uncertainty in January. If the Fed stops raising rates in January, while the yen resumes rate hikes, the US stock market will face capital pressure.
Under the high pressure of the US dollar index, spot gold fell 2.3% for the week.
Stablecoins and BTC Spot ETF
With the downward adjustment of rate cut expectations, the capital trend in the crypto market has suddenly reversed. Last week, there was $1.2 billion in inflows, but this week there was an outflow of $289 million, with outflows from BTC Spot ETFs and stablecoin channels.
This capital outflow has led to a sudden loss of market buying power, and although BTC surged above $99,000 this week, it ultimately fell.
Selling Pressure and Selling
The BTC mainly traded between $9,000 and $10,000 are the profit-taking positions of long and short positions, and the peak of selling has passed. With the weakening of trading sentiment, the scale of selling this week has also declined significantly, currently similar to the consolidation period in September. The weakening of the selling scale has kept the BTC price above $90,000.
In terms of unrealized profits, short positions have fallen to 8%, while long positions remain at a high of 285%. Therefore, the selling of long positions is crucial to the market. Observing the selling of long and short positions, we found that the selling of long positions has fallen to an extremely low level in the second half of the week, and short positions have also reduced their purchases. The encouraging news is that the BTC balance in centralized exchanges is still in an outflow trend.
Based on market structure information, we judge that the crypto market has basically completed its response to the Fed's expected rate hike. And with the price adjustment, selling has returned to a calm state, and the subsequent price trend will depend more on the warming of US stock trading sentiment and the allocation scale of mainstream US capital and institutions to BTC and ETH.
Cycle Indicators
According to the eMerge engine, the EMC BTC Cycle Metrics indicator is 0.75, and the market is in an upward phase.
