Regarding ETFs, on January 7, the Bitcoin spot ETF had a net inflow of $52.39 million, while the Ethereum spot ETF had a net outflow of $86.79 million.
Last night's decline was primarily due to the JOLTs job openings data and the ISM non-manufacturing PMI data. Both of these data points were too strong; job vacancies indicate that the unemployment rate may decrease, leading to more job openings, while a PMI above expectations also signifies economic growth. The rise in both data points suggests that the Federal Reserve is unlikely to change the pace of interest rate cuts, meaning there could be two cuts or even fewer.
The market has significantly pushed back expectations for the Federal Reserve's first interest rate cut to June or July of this year. This means that not only will there be no cut in January, but the March meeting is also expected to see no cuts. The inflation expectations and the Federal Reserve's interest rate expectations are being readjusted, which is significant bad news for the market.
So next, two important economic data points will be released tonight:
21:15 U.S. December ADP employment numbers
21:30 U.S. initial jobless claims for the previous week
U.S. stock markets will be closed on Thursday, but there will be data on layoffs from Challenger companies. On Friday, the non-farm data will be released.
When there is nothing new in the market, macro factors dominate, and everyone is preemptively hedging. The market is driven by buying and selling emotions, whether they are market makers, large institutions, or individual investors. Every day, they receive various information from the market, especially from the U.S. Currently, there is still time before the election and power transition, so there is no speculation. Therefore, the macro information is what influences market sentiment.
Currently, we are in a rate-cutting cycle. For now, any negative information exceeding two rate cuts will trigger market panic, leading to selling exceeding buying. Therefore, BTC may experience a slight drop, and in the case of altcoins, which originally have little liquidity, the situation will look even worse. As for on-chain data, while it may not be closely tied to BTC, the essence of a booming on-chain market requires good sentiment. Without sustained good sentiment, it is not very optimistic.
Of course, you could also say that before this new macro trend takes shape, there are short-term profits to be made because this market has all kinds of investors with different preferences. That’s for sure. Anyway, it's a volatile market; it’s just that the volatility is quite large. There’s nothing wrong with that.
Currently, the situation has already reverted to that of before and after Christmas. So the logic I mentioned earlier is about what information will stimulate market sentiment next. Ultimately, whether buying exceeds selling or vice versa will affect the demand for BTC, and the rise and fall of BTC will in turn influence the rise and fall of altcoins. This is the logic of spot and contracts.
So friends are asking if there will be further declines. This week, we still have non-farm data, unemployment rates, etc. If favorable for multiple interest rate cuts continues, then the market will rise. If unfavorable for multiple cuts, the market will fall. We can anticipate how much data will come, but we cannot predict market sentiment; we can only do our best to develop trading strategies to maximize personal position benefits. This is the hardest part and the most counterintuitive. But that said, in the face of power transitions and policies, macro factors must be ranked lower. On January 20, the power transition can still be optimistic, but in this brief period, it is bound to be stressful.
Overall, Bitcoin is still in a bull market. However, this round of the bull market may require more segment operations; otherwise, it will be relatively difficult to increase positions or chips before the bull market.
Currently, the market is turbulent, and walking alone can be lonely. Follow me for daily spot potential layouts and bull market strategy layouts.
