The so-called volatile market is that there is no trend sentiment stimulation, no strong liquidity, driven by a little market sentiment, and oscillates between 92,000-98,000. Once the sentiment is good, it will be pulled above 98,000, and once the sentiment is bad, it will fall to 98,000, and it will fluctuate back and forth around the current 94,000.
From a macro perspective, we continue to wait for tomorrow’s unemployment rate and non-farm payrolls. As long as there is no hype about recession expectations, it will be fine. Even if there is hype about recession expectations, it may be ugly in the short term, but as Trump is about to take office, it is still expected. BTC on-chain data URPD (this indicator shows the chip-dense area of on-chain transactions. The chip-dense area is often used to determine the support/resistance level of the market.), from the current point of view, at least the support at 92,000 and 93,000 is still very strong. As long as emotions are not stimulated, it will continue to be bearish.
Additionally, there is a piece of news today.
The U.S. Department of Justice has been authorized to sell $6.5 billion worth of Bitcoin related to the Silk Road case that was seized.
Many friends are worried that this batch of nearly 70,000 BTC entering the market will cause a crash, but in fact, the U.S. Department of Justice has historically sold through OTC, such as the 50,000 BTC acquired from a hacker attack in 2023, which were sold in batches OTC, and the 29,000 BTC from the Silk Road was auctioned off as early as 2014.
It is almost certain that there will not be a direct crash in the secondary market; based on the known U.S. holding data, they have not sold out. It might even not have started selling yet. Because the Department of Justice has not updated its sale information at all, if they had sold, it should have been announced, so there’s not much concern. Many negative news will come out when the market is falling.
Currently, the only point of contention in the market:
Today is a holiday in the U.S., and the stock market is closed; the potential impact of the upcoming non-farm data on Friday.
The game around the Federal Reserve's interest rate direction seems to have shifted from several rate cuts within the year to whether there will be any cuts at all. The market expects over 95% probability that there will be no cuts in January, and some institutions even speculate there will be no cuts before July. This year, the Federal Reserve is likely to remain inactive, and if there are cuts, it may only be once.
The previous value for non-farm employment is 227,000, while the market expectation is 160,000. Based on this data, a decrease in non-farm employment is highly probable, and maintaining or slightly increasing the unemployment rate is also highly probable. Therefore, theoretically, this is slightly favorable; if the unemployment rate rises while employment also increases, it should be a significant advantage. However, if the unemployment rate rises and employment falls, it indicates a downward trend in the U.S. economy.
Moreover, this data is completely contrary to the employment vacancies on Tuesday, as employment vacancies mean that employers have more manpower needs, which should reduce the unemployment rate and improve employment data. Therefore, the market expects the economy to be good, and the Federal Reserve will reduce or maintain the number of interest rate cuts.
But if Friday's non-farm data shows an increase in the unemployment rate and a decrease in employment, it would mean that the Federal Reserve will open up more opportunities for interest rate cuts. Moreover, it is a bit early to say there is an economic recession; the market data is still quite good. Therefore, I think if it does happen, it should be a slight advantage. Of course, if the market insists on interpreting it as an economic recession, then there’s nothing that can be done.
So, the unemployment rate data is always bad data; an increase in the unemployment rate considering an economic recession leads to more interest rate cuts, while a decrease in the unemployment rate considering a strong economy leads to unchanged or reduced rate cuts.
Non-farm employment data will be released on Friday, and the fate of the global market hinges on this data.
