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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 - $110,000).
As the major events in the schedule 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 statement 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 resolve the Russia-Ukraine conflict, 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 - $110,000), with the price falling below the second upward trend line and fluctuating narrowly around the $97,000 level, and is expected to make a directional choice soon.
Macroeconomic and Financial Data
The US released the January CPI this week, which exceeded expectations across the board, with CPI up 3% year-on-year and 0.5% month-on-month, higher than the market expectations of 2.9% and 0.3% respectively. 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 a certain extent. This data will further reduce the expectation of rate cuts this year, and the market currently tends to only have 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 multiple times 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 approved 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 is becoming smaller and 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 major progress 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 "Russia-Ukraine conflict" will undoubtedly bring significant positive variables to the global economy and financial markets if it can be resolved. Affected by this, 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 long confidence by Trump's tariffs and the expectation of Fed rate cuts seems to be dissipating, but a more definitive direction will require 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, 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.
Stablecoins and BTC Spot ETF
Stablecoins, BTC Spot ETF, and ETH Spot ETF channels saw a total outflow of $252 million this week, with stablecoins seeing an inflow of $362 million, and BTC Spot ETF and ETH Spot ETF seeing 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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