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Author: 0xWeilan
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 trading volume slightly shrinking.
Due to the impact of tariffs on Canada, Mexico, and China-Canada, BTC first plunged on Monday but miraculously recovered, and then oscillated at low levels, showing that in the current market, its risk asset attributes are far stronger than its digital gold attributes.
Because of the short-selling pressure on the weekend and Monday, BTC saw its largest intraday volatility of 11.69% in recent times, marking the lowest point of $91,178.01 since mid-January. The violent fluctuations resulted in over $800 million in losses for short positions in the spot market. The losses in the futures market are estimated to be as high as tens of billions of dollars.
Due to the large-scale clearance, BTC continued to fluctuate around $97,000 after Monday, and appeared relatively stable after multiple macroeconomic headwinds hit the market on Friday. However, for the battered market to regain its upward momentum, it is difficult to achieve with internal forces alone.
Macroeconomic and Financial 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. But 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 was in chaotic trading, unable to find direction. Subsequently, the University of Michigan consumer sentiment survey showed that 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 upward to 108.31, indicating that the market's concerns about rising inflation and rate hike expectations have deteriorated again. The three major US stock indexes plunged more than 1% during the session, wiping out the weekly gains.
After a period of decline, affected by the rebound in inflation expectations, US bond yields rebounded. The 1-year Treasury yield 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.
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 $2,861.81 per ounce, with the weekly gain expanding to 2.18%.
Next week, the market will see the release of the US January CPI, and Federal Reserve Chair Powell will testify at the Senate Banking Committee hearing on the semi-annual monetary policy report, and then attend the House Financial Services Committee hearing the next day.
The CPI and Powell's testimony will be the main factors driving BTC's performance next week.
Selling Pressure and Liquidation
In terms of selling pressure, long and short positions sold a total of 1,766.82 million coins, slightly higher than the previous week, maintaining a normal level, while the trading volume on the exchanges has shrunk slightly during the same period.
The futures market was severely hit, with open interest losing positions worth over tens of billions of dollars, which was the biggest victim of this week's volatile market.
Stablecoins and BTC Spot ETF
Stablecoins, BTC Spot ETF, and ETH Spot ETF saw inflows of $5.662 billion this week, with $5.074 billion, $183 million, and $405 million respectively, maintaining a strong inflow momentum.
However, it can be seen that the inflow scale of BTC Spot ETF, which directly translates into purchasing power, has declined for two consecutive weeks, which is the fundamental reason for the weak performance of BTC prices.
Cycle Indicators
According to the eMerge engine, the EMC BTC Cycle Metrics indicator is 0.625, indicating that the market is in an upward trend.
EMC Labs (Emergence Labs) was founded in April 2023 by crypto asset investors and data scientists. It focuses on blockchain industry research and Crypto secondary market investment, with industry foresight, insight and data mining as its core competencies, committed to participating in the thriving blockchain industry through research and investment, and promoting blockchain and crypto assets to bring well-being to humanity.
For more information, please visit: https://www.emc.fund
