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Written by 0xWeilan
This week, BTC opened at $96,481.47 and closed at $96,119.88, down 0.37% for the week, with the amplitude narrowing to 5% and trading volume shrinking significantly. BTC price is still within the "Trump bottom" (range of $89,000 to $110,000).
As the major events scheduled for this week, such as the release of the US January CPI, the imposition of reciprocal tariffs by the US, and Powell's semi-annual monetary policy testimony to Congress, had been anticipated in advance, they did not have a violent impact on the US stock market and the BTC cryptocurrency market.
With the US pushing for negotiations to end the "Russia-Ukraine war", market sentiment seems to be leaning towards optimism. The US dollar index fell sharply, US bond yields continued to decline, and US stock indexes rose again, approaching new historical highs. The negative impact of the "Trump trade" seems to be dissipating, but the market needs to provide further confirmation.
BTC is still trading within the "Trump bottom" ($89,000 to $110,000), with the price falling below the second upward trend line and oscillating narrowly around the $97,000 level, and is expected to make a directional choice soon.
Macroeconomic and Economic Data
The US released January CPI data this week, which broadly exceeded expectations, with CPI up 3% year-on-year and 0.5% month-on-month, higher than the market's expected 2.9% and 0.3%. Core CPI rose 3.3% year-on-year, higher than the expected 3.1%.
The data indicates that the economy remains strong and inflation has rebounded to some extent. This data will further reduce the expectation of rate cuts this year, and the market currently leans towards only one rate cut, around December.
In his semi-annual monetary policy testimony to Congress, Powell mentioned that if the economy continues to grow and inflation does not quickly fall back to the 2% target, the Fed may maintain its current policy for some time. Conversely, if the labor market unexpectedly weakens or inflation declines more than expected, the Fed may continue to moderately ease monetary policy.
Similar statements have been made many times before and are not new. But considering that the Trump administration has already reached a tacit understanding with the Fed, this statement can be seen as already tacitly acknowledged by the US government, so rate cuts are highly unlikely in a strong economic situation.
In addition, the impact of Trump's tariff policy on the market has become increasingly smaller after the dramatic changes in the "Mexico-US tariffs". This week, Trump announced that he would impose "reciprocal tariffs" on all countries, but did not specify a start time, so it did not have a real impact on the market.
What may have a greater impact on the market is the apparent imminent breakthrough in the "Russia-Ukraine conflict". Trump is pushing for dialogue and negotiation between the two sides, and news reports have also revealed the conditions of the two sides. At the Munich Security Conference, Trump emphasized that the conflict must end.
As an important event affecting the world economy, the end of the "Russia-Ukraine conflict" will undoubtedly bring significant positive variables to the global economy and financial markets. Under this influence, the US dollar index fell 1.22% to 106.813, the 10-year Treasury yield fell to 4.48%, and the three major US stock indexes all recorded weekly gains, with the Nasdaq up 2.58%, the S&P 500 up 1.47%, and the Dow Jones up 0.55%. London gold rose 0.75%, reaching a new high of $2,942.60 per ounce during the session.
The suppression of market confidence in going long by Trump's tariffs and the expected Fed rate cut seems to be dissipating, although a more definitive direction will need to wait for further confirmation from the market.
Selling Pressure and Selling
On the selling pressure side, long and short positions sold a total of 1,371.78 million coins, a significant decrease from the previous week, and the trading volume on the exchanges also shrank significantly, indicating that short-term panic selling has declined significantly. The average profit level of short positions is currently as low as 6%, and there is no urgent need for either profit-taking or stop-loss.
On the long side, the selling was suspended this week, and the position size increased by 8,000 coins.
Stablecoins and BTC Spot ETF
Stablecoins, BTC Spot ETF, and ETH Spot ETF saw a total outflow of $252 million this week, with stablecoins seeing an inflow of $362 million, while BTC Spot ETF and ETH Spot ETF saw outflows of $584 million and $29 million respectively.
The outflow of funds from the ETF market was the main reason for BTC's weaker performance than the US stock market last week.
Cycle Indicators
According to the eMerge engine, the EMC BTC Cycle Metrics indicator is 0.75, indicating that the market is in an upward trend.
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