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This week, BTC opened at $97,676.53 and closed at $96,475.82, down -1.23% for the week, with a maximum amplitude of 11.69%, and retested the $90,000 - $108,000 range, with slightly decreased trading volume.
Due to the impact of tariffs on Canada, Mexico, and China, BTC first had a flash crash on Monday but miraculously recovered, and has since been oscillating at low levels, showing that in the current market, its risk asset attributes are far stronger than its digital gold attributes.
Due to short selling pressure over the past weekend and on Monday, BTC saw its largest intraday volatility of 11.69% in recent times, marking the lowest point since mid-January at $91,178.01. The violent fluctuations resulted in over $800 million in losses for short positions in the spot market. The estimated losses in the futures market could reach tens of billions of dollars.
Due to the large-scale liquidation, BTC has been oscillating around $97,000 since Monday, and surprisingly appeared relatively stable after multiple macro headwinds hit the market on Friday. However, for the battered market to regain its upward momentum, it will be difficult to achieve through internal forces alone.
Currently, BTC is still trading within the "Trump bottom" ($89,000 - $110,000), hovering around the second upward trend line, and will face a choice of short-term direction.
Macro Finance and Economic Data
The 25% tariffs on Canada and Mexico were postponed at the last minute, allowing the violently plunging BTC and US stocks to recover their losses. However, by the weekend, the market was hit by a double whammy of economic and policy factors.
After the release of the erratic non-farm payroll data on Friday, the market traded chaotically without finding direction. Subsequently, the University of Michigan consumer sentiment survey showed consumer confidence fell to a seven-month low due to high inflation concerns. Later, Trump announced that he would impose reciprocal tariffs on multiple countries next week.
As a result, the US dollar index fluctuated upwards to 108.31, indicating that the market's concerns about rising inflation and rate hike expectations have worsened again. The three major US stock indexes plunged more than 1% during the session, wiping out the weekly gains.
After a period of decline, the yield on 1-year Treasuries rebounded to 4.232% and the 10-year yield rebounded to 4.494%, approaching the 4.5% high again, putting pressure on the equity market due to the rebound in inflation expectations.
The fear of uncertainty about inflation and rate cuts has led to active long positions in gold. This week, London gold realized a 6-week winning streak, rising to $1,861.81 per ounce, with the weekly gain expanding to 2.18%.
Next week, the market will see the release of the US January CPI, and Fed Chair Powell will testify at the Senate Banking Committee and the House Financial Services Committee on the semi-annual monetary policy report.
The CPI and Powell's testimonies will be the main factors driving BTC's performance next week.
Selling Pressure and Liquidation
In terms of selling pressure, long and short positions collectively sold 1,766,820,000 coins, slightly higher than the previous week, maintaining a normal level, while the trading volume on exchanges has slightly decreased during the same period.
The futures market has been severely hit, with over $10 billion in open interest positions liquidated, making it the biggest victim of this week's volatile market.
Stablecoins and BTC Spot ETF
The inflow to the stablecoin and BTC Spot ETF/ETH Spot ETF channels was $5.662 billion for the week, with $5.074 billion, $183 million, and $405 million respectively, maintaining a strong inflow momentum.
However, it can be seen that the inflow to the BTC Spot ETF, which directly translates into purchasing power, has declined for two consecutive weeks, which is the fundamental reason for the weak BTC price performance.
Cycle Indicators
According to the eMerge engine, the EMC BTC Cycle Metrics indicator is 0.625, indicating the market is in an upward cycle.
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