The market, project, cryptocurrency and other information, opinions and judgments mentioned in this report are for reference only and do not constitute any investment advice.
Author: 0xWeilan
On January 10, the non-farm payroll data released by the U.S. Department of Labor exceeded expectations by a large margin, dealing a heavy blow to the market. Although the U.S. stocks and BTC had already made adjustments prior to this. However, the non-farm data hit hard, causing the medium-term interest rate cut expectations to turn clear, and the pricing and trading logic of the U.S. stocks and BTC need to be redefined.
Although the market has experienced some adjustment since the Fed's "dovish" turn on the 18th, the next stage lacks trading points, and it is feared that the upward momentum will be lost. It will take time for all parties to find the trading direction.
This week, BTC opened at $98,347.65 and closed at $94,509.62, down 3.9% for the week, with a range of 11.74%, and the trading volume increased from the previous week. The current price is still within the range of the box consolidation, retesting the second stage upward trend line of the upward trend, and is temporarily supported. If the capital is insufficient, the BTC price breaks through the upward trend line, it is feared that it will retest the lower end of the box at $87,000.
The downward adjustment of the U.S. interest rate cut expectations has become a foregone conclusion, and the U.S. stocks are currently in the stage of digesting and absorbing this repricing. If the market can stabilize and gradually start the economic growth trading point in the future, BTC will return to an upward trend. Otherwise, it is feared that it will bear huge retracement pressure, after all, BTC has recorded a relatively large increase since the "Trump trade", while the Dow Jones has almost completely retraced its gains.
In the medium term, if the market stabilizes, BTC may also have the opportunity to break out an independent market, but the probability is not high.
Macroeconomic and Economic Data
On Friday, the U.S. Department of Labor reported that the seasonally adjusted non-farm payrolls were 256,000, higher than the previous value of 212,000 and far exceeding the expected 160,000, with the unemployment rate at 4.1%, lower than the previous value of 4.2% and also lower than the expected 4.2%.
The data shows that the U.S. job market is strong, and the current high interest rate environment has not had a significant suppressive effect on the current U.S. economy. Therefore, the market believes that the Fed's focus of attention will be completely shifted to curbing inflation. Combined with the "hawkish" statement of the Fed on December 18, the market believes that the interest rate cut cycle since September 2024 will enter a pause state. According to the CME FedWatch, the probability of a rate cut in January has fallen to 6.4%.
Major U.S. investment banks have all lowered their interest rate cut expectations for 2025, with most voices believing that the previous two rate cuts will be adjusted to one, with the timing moved from June to the second half of the year. Bank of America even believes that there is no hope of a rate hike for the whole year, and there is a possibility of restarting the rate hike in the first half of the year, because the employment data is expected to be better after the Trump economic policy is gradually implemented, and inflation will also continue to rebound.
Against this backdrop, the U.S. dollar index surged sharply to 109.65, approaching the 110 high. The one-year U.S. Treasury yield fell to 4.223%, and the 10-year Treasury yield fell to 4.762%. London gold also continued to rise to $2,689.88 per ounce. The Nasdaq, Dow Jones and S&P 500 continued the adjustment since December 18, down 2.34%, 1.86% and 1.94% respectively for the week.
For the U.S. stocks, based on the overall judgment of major investment banks, the outlook is generally positive, but there may be more twists and turns in the first half of the year. The policy response after Trump's inauguration on January 20 and when the economic growth will become the focus of trading will be the key focus in the short to medium term.
Stablecoins and BTC Spot ETF
Since the adjustment since December 18 has been relatively sufficient, the BTC and crypto market did not see a large-scale capital outflow this week, but instead received an inflow of about $708 million.
This week, the BTC Spot ETF had inflows on 3 out of 4 trading days, with a total inflow of $313 million for the week. In terms of stablecoins, there were positive inflows for 4 days of the week, with a supply of $296 million.
As of the weekend of January 12, the crypto market maintained relatively healthy capital in terms of capital, which is very important for the future market.
Selling Pressure and Selling
Accompanied by the continued decline in the market, short positions have intensified the selling, with the largest selling day on January 10 in the past half month. This week, short positions provided 164,517 BTC for selling, an increase from the previous week.
On the long side, the selling has been continuously shrinking for 3 consecutive weeks. From a cyclical perspective, the long positions have temporarily suspended the second round of selling. Their next selling should be after the price breaks through $100,000 again.
The exchange balance is still in a continuous downward trend, reaching 29,770 BTC this week, the largest outflow in the past six weeks, indicating that BTC at $90,000-$100,000 still has strong appeal for many funds.
Cycle Indicators
According to the eMerge engine, the EMC BTC Cycle Metrics indicator is 0.625, indicating that the market is in an upward phase.
END
EMC Labs (Emergence Labs) was founded in April 2023 by crypto asset investors and data scientists. It focuses on blockchain industry research and Crypto secondary market investment, with industry foresight, insight and data mining as its core competitiveness, committed to participating in the thriving blockchain industry through research and investment, and promoting blockchain and crypto assets to bring welfare to humanity.
For more information, please visit: https://www.emc.fund
