After the Fed's interest rate cut expectations shifted and were revised downwards two weeks later, the U.S. stock market continued to adjust, recording a rebound only on Friday. In contrast, BTC, which experienced a larger adjustment, showed a strong trend this week, remaining stable above $91,000 despite facing outflows from BTC Spot ETFs, achieving five consecutive trading days of increases.
BTC opened at $93,563.35 and closed at $98,345.33, recording a 5.11% increase of $4,781.98 for the week, with a volatility of 8.23% and a slight decrease in trading volume.
As Trump approaches his presidency, concerns about U.S. stock market funding continue, and U.S. Treasury volatility is also rising, indicating that the market has yet to find direction.
Macroeconomic and Financial Data
The U.S. dollar index continued to rise, reaching a high of 109.5196 on Friday. London gold slightly increased to $2,639.62, the one-year U.S. Treasury yield dipped slightly to 4.171%, while the ten-year U.S. Treasury yield continued to rise to 4.601%.
The three major U.S. stock indices, Nasdaq, Dow Jones, and S&P 500, rose by 1.77%, fell by 0.6%, and fell by 0.48%, respectively. Most of the week was in a weak state, with only a relatively strong buying presence on Friday.
Next Friday, the U.S. will release non-farm payroll data, which may provide directional guidance for traders. If the non-farm payroll data is below expectations, it may increase expectations for further interest rate cuts by the Fed. Conversely, strong labor market data could reinforce the Fed's cautious stance, thus limiting the possibility of aggressive easing policies. This would push up U.S. Treasury yields and put pressure on U.S. stocks.
Stablecoins and BTC Spot ETF
Since the change in U.S. interest rate cut expectations on the 18th, the funds in the cryptocurrency market's BTC Spot ETF and stablecoin channels have faced continuous outflows, although the situation has improved this week.
BTC Spot ETF and stablecoin channel funds remained aligned, with outflows from Monday to Thursday. By Friday, with a slight recovery in enthusiasm for buying U.S. stocks, both channels saw strong inflows, totaling $1.683 billion that day, and stablecoins continued to flow in over the weekend. Overall, after ending last week's outflows, the week recorded a small net inflow.
Although trading was light this week, there was no retreat in on-site funds, and by the weekend, the stock of funds in exchanges reached a historical high of $46 billion, showing that sellers are gathering strength. Once the external environment stabilizes, it will drive BTC and other crypto assets back to an upward trend.
Selling Pressure and Selling
After BTC prices surged to the $90,000 to $110,000 range, selling pressure mainly came from short and long positions in the 'new high correction zone' of $50,000 to $70,000. Following the break of the rising trend due to the Fed's interest rate expectations, there was no large-scale sell-off, and the selling pressure from both short and long positions has been continuously weakening, with only 200,000 BTC flowing into exchanges this week, a relatively low level.
During the same period, the stock of funds in exchanges continued to slowly flow out. Following price adjustments, the floating profit level for short positions has dropped to 12%.
The contract market rates and open interest have also adjusted to lower levels.
This relatively stable chip structure and accumulation of stablecoins indicate that there is no significant adjustment pressure within the market.
Cyclical Indicators
According to the eMerge engine, the EMC BTC Cycle Metrics indicator is at 0.625, indicating that the market is in an upward phase.
About EMC Labs
EMC Labs was established in April 2023 by cryptocurrency asset investors and data scientists. It focuses on blockchain industry research and crypto secondary market investments, with industry foresight, insights, and data mining as its core competitiveness, committed to participating in the booming blockchain industry through research and investment, promoting blockchain and cryptocurrency assets for the benefit of humanity.
For more information, please visit: https://www.emc.fund
