Amid the ongoing questioning of the Fed's pause on rate cuts last week, a series of disappointing non-farm payroll data has shown the resilience of the US economy, with the US dollar index hitting new highs, suggesting the employment issue has been somewhat alleviated and the Fed's need for rate cuts may not be as strong. From major financial institutions like Citigroup and Goldman Sachs to individual traders, many are reducing their bets on the Fed cutting rates in 2025.
The price of $BTC has also shown a huge "sweeping" state, fluctuating by 10,000 points up and down. Many in the market jokingly say "the price hasn't changed, but the position is gone." The market sentiment has also shown huge volatility, quickly shifting from greed to panic and then back to greed. And yesterday's PPI data was positive, but the inflation issue has not been well alleviated, which has further increased expectations of the Fed cutting rates.
Less than a week after Trump took office, the US CPI data will be released at 21:30 tonight in the GMT+8 time zone. Will the rate cut in 2025 be on the agenda? Has the Trump narrative already been priced in, or is there still huge potential? Let's see what the traders think.
Macro Analysis
The key focus in the market data today is the trading volume of $BTC. Referring to the C-wave third wave mentioned on the screen, the third wave is often accompanied by a significant decline and market panic selling, which will lead to a surge in short-term trading volume. So looking at the increase in $BTC trading volume can indicate whether the third wave has been completed!
The overall market decline, with $BTC sucking blood from $ETH and altcoins, has accelerated the decline in risk appetite.
The $BTC trading volume increased by 25%, which is not obvious enough compared to the 150% increase in the overall market trading volume, indicating that the current situation does not yet meet the stage of the third wave completion. The altcoin trading volume increased by 277%, and today's breakdown of $BTC's key level has caused $ETH and many mainstream altcoins to break through key support, leading to a large-scale liquidation in the altcoin market, causing a surge in trading volume.
In terms of capital, the market's existing and incremental capital is 4 billion, currently at 212.5 billion.
$USDT: According to the official website data, it is 137.449 billion, an increase of 0.03 billion from last Saturday. Although the market has declined significantly, the capital in the Asia-Europe market has temporarily stopped net outflows, which is a small positive data point. Meanwhile, the activity of $USDT capital has increased by 1 time, which should be due to the large-scale liquidation leading to an increase in trading volume.
Overall, the capital that has finished trading during the decline has not shown a large-scale exodus, but rather has chosen to remain in the market or return to trading again. This situation does not belong to the stage of panic expansion for the time being.
The capital in the US market on Monday did not show FOMO, with net outflows for four consecutive days. Even though it went from 89,000 to 97,000. This is also an important reason why I don't think 89,200 is the bottom. 89,000 consumed a large amount of retail capital from non-US regions, which can be seen from the URPD data showing a large number of short-term holders who bought the dips and took profits.
According to SoSoValue data, on January 14th (Eastern Time), the total net outflow of $BTC spot ETFs was $210 million, with net outflows for 4 consecutive days. The $BTC spot ETF with the largest single-day net inflow yesterday was the WisdomTree ETF BTCW, with a net inflow of $10.2372 million. The total historical net inflow of BTCW has reached $239 million, followed by the VanEck ETF HODL with a net inflow of $5.4596 million. The current total net asset value of $BTC spot ETFs is $108.981 billion, and the ETF net asset ratio (market cap to total $BTC market cap) has reached 5.7%, with a cumulative historical net inflow of $35.722 billion.
Since there was no second wave of risk aversion on Tuesday, it either means that investors have already had sufficient expectations for the CPI, or that investors have enough positive sentiment to offset the potential negative sentiment from the CPI data. To be honest, I don't think this CPI data is that important.
Because the Fed not raising rates in January is already close to 100% certain, and December's inflation will not actually change the Fed's decision. The Fed will most likely not raise rates even in March, and according to the dot plot, there will only be two rate cuts in 2025, possibly all in the second half of the year, with no rate cuts in the first half.
So a single CPI data is not as important as the non-farm payroll data, as the current inflation is already within the Fed's expectations. Of course, if the inflation data is lower, it will be more positive for the market, but even if the December inflation drops to 2%, the Fed may still not immediately cut rates.
Turning to the $BTC data, although the turnover rate has increased, with the rebound in $BTC price, panic has not yet emerged. Currently, it is still more short-term profit-taking investors who have exited the market, and the early investors including loss-making investors have not shown significant signs of reduction, indicating that at least until now, investor sentiment remains relatively stable.
Technical Analysis
$BTC has broken through the first trend line, and is expected to break through the second one. In the short term, it is waiting for the moving averages to catch up with the price, taking a break before continuing to rise.
I have added more long positions on $BTC here.
Looking back at history, history is the teacher. This kind of structure has a high probability of occurrence, and the subsequent is often a large-scale correction, at least retracing 50% to 0.618% of the previous major wave. The more extreme case was in 2019, where it retraced back to the starting point, which requires various factors to support. We are only talking about the normal situation, and the 85,000 mentioned last week is based on this calculation.
Data Analysis
The probability of $ETH price exceeding $4,000 by the end of January is only 10.62%.
The price continues to rise, and the premium is still recovering towards 0, indicating that the spot demand is still entering the market. When the premium fully recovers to a positive value and reaches a relatively high level, the entire $BTC market will be considered in a safe mode.
So the current price increase and the synchronous recovery of the premium actually represent that the spot demand is entering the market, while the futures long positions are gradually taking profits, and the futures short positions are gradually increasing their positions.
When the premium returns to around 0, it means that the futures long positions have basically finished taking profits, and if the shorts do not further increase their positions, the premium will not be able to rise further. Conversely, if the shorts continue to increase their positions, the premium will then turn positive.
In general, when the premium reaches zero, it is easy to see a small-scale trend reversal or a continuation of the trend.
In a bullish trend, each time the premium returns to zero, it is either a time for the correction to be in place or for the trend to turn bearish. Similarly in a bearish trend, each time the premium approaches 0, it is either a time for a rebound or for the trend to turn bullish.
According to the needle break below $90,000, it can be seen that market demand has weakened, so the key support has been broken by the needle drop, and the current price range has the conditions to become a "distribution range"; Similar to the volatility in 2024, the presence of distribution signs does not mean that the market will ultimately go bearish, and stronger demand can also pull up the market;
On-chain whale dynamics
"The whale who bought low and sold high $ETH for a profit of $33.67 million" withdrew 10,000 ETH worth $30.76 million from Binance on January 13, with a cost of about $3,075.57; Currently, he holds a total of 55,166.12 ETH, worth a staggering $169 million
A month later, the "new address that built a position of 3,669 ETH on 12.13" added another 4,817 ETH worth $14.92 million during the plunge on Monday; Since 2024.12.05, this address has accumulated a total position of 13,479 ETH, with a total value of $42.78 million and a cost of $3,622, currently with an unrealized loss of $5.9 million
The ETH swing whale with a win rate of 83.3% reduced its position by 5,872.63 ETH (the part added during the plunge last night) at an average price of $3,106.53, with a small loss of $530,000; Currently, the two addresses still hold 11,252.98 ETH (about $35.39 million), with a cost of $3,196.85
