The market, project, and cryptocurrency information, opinions and judgments mentioned in this report are for reference only and do not constitute any investment advice.
On January 10, the non-farm payroll data released by the US Department of Labor significantly exceeded expectations, dealing a heavy blow to the market. Although the US stock market and BTC had already made adjustments prior to this, the non-farm data shock has caused the medium-term rate cut expectations to shift clearly, and the pricing and trading logic of the US stock market and BTC need to be redefined.
Although the market has experienced some adjustment since the Federal Reserve'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%. Trading volume increased slightly from the previous week. The current price is still within the range consolidation area, retesting the second stage uptrend line of the upward trend, and is temporarily supported. If the capital is insufficient, if the BTC price breaks through the upward trend line, it is feared that it will retest the lower end of the range at $87,000.
The downward adjustment of the US rate cut expectations has become a foregone conclusion. Currently, the US stock market is still in the stage of digesting and absorbing this repricing, and if it 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 independently, but the probability is not high.
Macroeconomic and Financial Data
On Friday, the US Department of Labor reported that the seasonally adjusted non-farm payrolls were 256,000, higher than the previous value of 212,000, far exceeding the expected 160,000, and the unemployment rate was 4.1%, lower than the previous value of 4.2% and also lower than the expected 4.2%.
The data shows that the US job market is strong, and the current high interest rate environment has not had a significant suppressive effect on the current US economy. Therefore, the market believes that the Federal Reserve's focus of attention will be completely shifted to curbing inflation. Combined with the "hawkish" statement by the Federal Reserve on December 18, the market believes that the 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 US investment banks have all lowered their 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 it is possible that the rate hike will be restarted 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 US dollar index has risen sharply to 109.65, approaching the 110 high. The one-year US Treasury yield has fallen to 4.223%, and the ten-year Treasury yield has fallen to 4.762%. London gold has continued to rise to $2,689.88 per ounce. The Nasdaq, Dow Jones, and S&P 500 have continued the adjustment since December 18, down 2.34%, 1.86%, and 1.94% respectively for the week.
For the US stock market, the overall judgment of major investment banks is 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 economic growth will become the focus of trading are key concerns in the short to medium term.
Stablecoins and BTC Spot ETF
Due to the relatively sufficient adjustment since December 18, the BTC and cryptocurrency 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 on 4 out of 7 days, with a supply of $296 million.
As of the weekend of January 12, the cryptocurrency market maintained relatively healthy capital compared to the previous week, and the capital attitude in the future is very important.
Selling Pressure and Selling
Accompanied by the continued decline in the market, short positions have intensified the selling, with the largest selling day in half a month occurring on January 10. This week, short positions provided 164,517 BTC for sale, an increase from the previous week.
On the long side, the selling has continued to shrink 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 process, reaching 29,770 BTC this week, the largest outflow in the past six weeks, indicating that BTC in the $90,000 to $100,000 range still has strong appeal to 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
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