On Friday (January 10), the dollar index maintained a strong trend, continuing to stand firm at 109.17, ahead of the non-farm employment report (NFP), with initial jobless claims and FOMC minutes supporting hawkish pricing. Russian missile strikes in southern Ukraine resulted in at least 13 civilian deaths, spurring gold prices to rebound to $2,670. The U.S. government received approval to liquidate 69,370 Bitcoins seized from the Silk Road, triggering panic that caused Bitcoin to plummet to around $92,600.
The U.S. government has been approved to sell 69,370 Bitcoins.
According to reports from the crypto circle, the U.S. government has been approved to liquidate 69,370 Bitcoins seized from the infamous Silk Road market. Court documents show that Chief District Judge Richard Seeborg dismissed motions to block the seizure, allowing the Department of Justice to continue selling the cryptocurrency.
The scale of the sell-off has left traders in panic, further exacerbating bearish resistance in the context of a downward trend that began this week. Bitcoin prices reacted quickly, plummeting from $95,060 to a low of $91,800, as shown in the chart below.
Currently, there is widespread speculation in the market about whether this sell-off occurred before the inauguration of U.S. President Donald Trump, who has consistently supported Bitcoin during his campaign. Trump's proposal includes using seized funds to establish a national Bitcoin reserve, adding irony to the U.S. government's narrative regarding cryptocurrency liquidation.
Russian missile strikes in southern Ukraine resulted in at least 13 deaths.
AP News quoted officials saying that on Wednesday afternoon, Russian missiles struck the southern Ukrainian city of Zaporizhia, resulting in at least 13 civilian deaths and around 30 injuries.
A video released by Ukrainian President Zelensky's Telegram channel shows civilians lying on city streets scattered with debris. The video shows them receiving treatment from emergency service personnel and being carried away on stretchers.
In this ongoing war that has lasted nearly three years, Russia frequently conducts airstrikes on civilian areas. This is the largest conflict in Europe since World War II, resulting in thousands of civilian deaths.
Zelensky and regional governor Ivan Fedorov stated that Wednesday's attack resulted in at least 13 civilian deaths. A few minutes before the attack, Fedorov had warned that the Zaporizhia region might be targeted by high-speed missiles and devastating glide bombs.
Fedorov stated that the Russian military began launching glide bombs at Zaporizhia in the afternoon, with at least two bombs hitting residential buildings in the city.
He announced that Thursday would be a day of mourning in the region, with Zelensky writing on Telegram: 'Nothing is more brutal than airstriking a city, knowing that ordinary civilians will suffer.'
Dollar stands firm above 109 ahead of non-farm payrolls; initial jobless claims and FOMC minutes support hawkish outlook.
For the week ending January 4, the number of initial jobless claims in the U.S. fell to 201,000, better than the expected 218,000. Meanwhile, the ADP report indicated that 122,000 jobs were added in the private sector in December, below expectations.
The FOMC minutes emphasized assumptions regarding trade and immigration policies, with officials concerned that inflation may take longer to reach 2%. Most attendees supported a 25 basis point rate cut in December, but upward inflation risks prompted policymakers to remain cautious.
U.S. yields are stabilizing, with the 10-year Treasury yield hovering around 4.67%, and the 30-year Treasury yield maintaining around 4.90% after the auction week concludes. Despite the previous lukewarm demand for the 10-year Treasury, the 30-year Treasury performed strongly, reflecting investor resilience.
The loose financial environment continues, with the Chicago Fed's indicator remaining accommodative for ten consecutive weeks, which helps stimulate economic growth as the Fed prepares for potential fiscal stimulus measures in the future.
The market is taking a wait-and-see approach to the non-farm employment data for December to be released on Friday, with investors hoping for clarity on labor market momentum and potential policy impacts. Total employment is expected to drop from 227,000 to 160,000.
Dollar Technical Analysis
FXStreet analyst Patricio Martín stated that the dollar index held above the 20-day simple moving average (SMA), maintaining a constructive trend despite intermittent pullbacks. Technical indicators still lean positively, although they seem to be flattening rather than accelerating further.
Key support is around 108.40, with 108.00 as a level if bearish momentum strengthens. As long as inflation concerns and stable yields persist, the dollar index may remain near the high of 109.00, although the trading range may narrow in the short term.
Gold Technical Analysis
FXEmpire analyst Bruce Powers noted that on Thursday, gold prices continued to rise to a new short-term high of $2,678, breaking above the 61.8% Fibonacci retracement level of $2,671. Wednesday's high stopped at the 61.8% level. It appears that the recovery of the 50-day moving average on Thursday and the subsequent daily close above that line indicates strong demand momentum is being maintained.
This is the first close above the 50-day moving average since December 13, 2024, indicating an improvement in demand. Note that trading hours in the futures market were shortened on Thursday, which may have affected trading levels due to the national day of mourning for former President Jimmy Carter.
Despite signs of strengthening in the short term, the rise in gold is a counter-trend rebound within a larger downward trend channel pattern. Therefore, unless there is evidence to the contrary, the potential impact of the channel will be prioritized. If the integrity of the channel structure is maintained, resistance may be seen near the downward trend line, followed by a decline and price drop.
The 78.6% retracement level at $2,695 can also be considered, as it is relatively close to the trend line. Overall, unless prices break above the recent swing high of $2,726, the bullish reversal of the bearish correction is not evident, as this is a lower swing high and part of the downward price structure.
In addition to the channel pattern, the current short-term rise is part of a consolidating range forming, defined by a downward trend line at the top and an upward trend line at the bottom, connecting the swing low of $2,582 on December 19. Overall, the consolidation range has been contracting and is displaying a symmetrical triangle pattern, with the two lines converging at the triangle's apex on February 6 (brown horizontal line). Periods of price contraction or lower volatility are often accompanied by price increases—trends and volatility increase.
Price movements around these two lines will signal early signs of an upward or downward breakout. The weekly chart pattern suggests a bullish resolution may occur. This week, a breakout above last week's high of $2,665 triggered a bullish reversal. It is likely that this breakout will be confirmed, with closing prices potentially above last week's high.
Bitcoin Technical Analysis
FXStreet analysts indicate that the outlook for Bitcoin prices shows potential reversal signs, as the double bottom pattern at $90,000 suggests a possible rebound.
This technical form is historically known for signaling trend reversals, and the increase in Bitcoin trading volume further confirms this, indicating an increase in market participation and buying interest.
Additionally, the volume-weighted average price (VWAP) line above the current price also indicates that buying pressure is increasing.
Conversely, if Bitcoin fails to maintain above the critical support level of $90,000, a bearish scenario may still emerge.
The chart reflects the dominance of short sellers, with enormous sell-off pressure potentially leading to price declines.
Falling below this level would negate the bullish implications of the double bottom, potentially dragging Bitcoin down to $84,000, where further liquidity may be tested.
For now, the double bottom and increased volume provide a cautiously optimistic attitude for a rebound.
A sustained breakout above the $93,217 VWAP level may open the path to $100,000, consistent with the bullish target implied by the double bottom structure.
