Regarding ETFs, on January 7, Bitcoin spot ETFs had a net inflow of $52.39 million, while Ethereum spot ETFs had a net outflow of $86.79 million
Last night's decline was mainly due to the JOLTs job vacancy data and the ISM non-manufacturing PMI data. The main reason was that these two data were too good. Job vacancies mean that the unemployment rate may fall and there will be more jobs. PMI exceeding expectations also represents an upward trend in the economy. The rise of the two data indicates that the Fed is unlikely to change the pace of interest rate cuts, that is, twice or even less.
The market has significantly postponed the Fed's first rate cut expectations to June or July this year, which means that not only will there be no rate cut in January, but there is also no rate cut expected at the March meeting - inflation expectations and Fed interest rate expectations are being readjusted, which is major bad news for the market.
So, two important economic data will be released tonight:
21:15 US ADP employment figures for December.
21:30 Initial jobless claims in the US last week.
The US stock market will be closed on Thursday, but there will be Challenger job cut data, and Friday is the non-farm data.
When there is nothing new in the market, macro factors dominate, and everyone is preemptively hedging. The market is driven by buying and selling sentiments, whether it’s market makers, large institutions, or individual investors, etc. Every day, various different information is received from the market, especially dominated by US information. Currently, there is still time until the election power transition, and speculation has not occurred. Therefore, what can impact market sentiment is macro information.
Currently, we are in a rate-cutting cycle; any unfavorable information exceeding two interest rate cuts will trigger market panic, leading to selling exceeding buying. In this case, BTC may decline slightly, and altcoins, which originally have little liquidity, will look even worse. As for on-chain data, while it may not closely follow BTC, the essence of a booming on-chain market requires good sentiment. Without sustained good sentiment, it is also not very optimistic.
Of course, you could also say that before this new major trend is formed, there are short-term profits being taken, as this market has all kinds of investment preferences, that's for sure. Anyway, it's a volatile market, just with a significant amplitude in the fluctuations. There’s nothing wrong with that.
Currently, we have already returned to the situation around Christmas. Therefore, the logic I mentioned earlier is that there will be information that stimulates the market's sentiment, whether buying exceeds selling or selling exceeds buying, which will trigger the demand for BTC. The rise and fall of BTC will in turn affect the rise and fall of altcoins. This is the logic of spot and futures.
So friends are asking whether it will drop further. There is still non-farm data and unemployment rate this week; if it is conducive to continued multiple interest rate cuts, then it will rise. If it is not conducive to continued multiple interest rate cuts, then it will fall. We can anticipate the amount of data, but we cannot predict the market's sentiment; we can only try to develop a trading strategy to maximize personal position benefits. This is the most difficult and counterintuitive. However, that being said, in the face of power transition and policy, the macro aspect should be deprioritized, 1.20 power transition can still be optimistic, but in this short period, it's inevitably grinding.
Overall, Bitcoin is still in a bull market. However, this round of the bull market may require more swing trading; otherwise, it will be difficult to increase positions and chips before the bull market.
