Today there was news that the U.S. Department of Justice has been approved to prepare for the sale of Bitcoin valued at $6.5 billion. This caused the market to plummet, leading Bitcoin's price to drop to around 92,500. Many people began to panic, wondering whether to sell at a loss. But I want to say that the expectation of a bull market still exists, and such short-term candlestick fluctuations will not affect the long-term trend!
Let's first look at the ETF data
Yesterday, $418 million flowed out of Bitcoin-related ETFs, a slight increase from the previous day. Ethereum ETFs also experienced outflows, amounting to $151.4 million, which was a significant increase from the previous day. These outflows indicate that market sentiment is somewhat unstable, but it does not mean there are no rebound opportunities.
The trading volume of Bitcoin's decline is gradually decreasing, indicating that selling pressure is weakening, and the downward momentum is insufficient; thus, there is little space for a sharp decline in the short term, while the possibility of a rebound is higher.
Current negative news in the market:
1. There are many trapped positions in Bitcoin between 97,000 and 100,000, making it difficult to break through in the short term.
2. Expectations for interest rate cuts by the Federal Reserve have weakened.
3. The liquidity in the crypto market has not improved.
4. Bitcoin ETFs continue to experience outflows.
Therefore, after the rebound, Bitcoin may experience a period of low-level fluctuations.
Next, we need to pay special attention to the non-farm employment data to be released by the U.S. on Friday. If the data is poor and unemployment rises, it may lead the Federal Reserve to consider interest rate cuts, which could have some impact on the market. The current decline may be the market's response to expectations before the release of non-farm data.
Views on the $6.5 billion Bitcoin sale plan:
The U.S. Department of Justice has obtained approval to sell $6.5 billion worth of Bitcoin from the Silk Road platform, but when exactly these Bitcoins will be sold is still uncertain. Trump mentioned after taking office on January 20 that he would not sell these Bitcoins. Although the sale plan has not been determined, even if these Bitcoins are sold, the market should be able to absorb it.
The most critical factor in the market right now: Non-farm data
Today the U.S. stock market is closed, and the non-farm employment data to be released on Friday may influence the Federal Reserve's interest rate decision. Previously, there was an expectation that the Federal Reserve might cut rates several times this year, but now there seems to be more discussion about whether the Federal Reserve will actually cut rates.
The market believes that there is basically no possibility of interest rate cuts in January, and some institutions even predict that there will be no cuts until July. Many believe that the Federal Reserve may maintain the status quo, and if there are rate cuts, it will only be once.
The previous value of non-farm employment was 227,000, and the market expects this time to be 160,000. From the data, a decrease in the employment growth is highly probable, while the unemployment rate should remain unchanged or slightly increase. These changes are theoretically somewhat favorable for the market. If the unemployment rate rises but employment still increases, that would be even more favorable. However, if the unemployment rate rises and employment decreases, it means that the U.S. economy may be experiencing a downturn.
This data is exactly the opposite of the job vacancy data released on Tuesday. The job vacancy data indicates that employers need more employees, which should theoretically lower the unemployment rate and improve employment data. Therefore, the market originally expected strong economic performance, and the Federal Reserve might reduce the number of interest rate cuts. However, if the non-farm data on Friday shows rising unemployment and declining employment, it may trigger more expectations for interest rate cuts.
Will there be a continued sharp decline?
I don't believe so. The impact of the macro economy has temporarily deprived Bitcoin of upward momentum, which should have been the time for speculation, as two economic data released by the U.S. exceeded expectations, leading to a collective correction in U.S. stocks and the crypto market. The non-farm data this Friday may also exceed expectations, which will affect market trends. This decline has actually reacted to these factors in advance.
Currently, Bitcoin is in a state of stagnation, with an overall weak trend, and may experience wide fluctuations. It is expected to fluctuate between 92,800 and 100,500. The prices of altcoins are also affected, with many altcoins experiencing significant declines.
Where are the opportunities in altcoins?
From my perspective, this is precisely the opportunity for altcoins, especially Ethereum. The overall weakness of the market makes Ethereum's performance more prominent, and the inflow of funds into altcoins will gradually increase. Therefore, do not be frightened by short-term price fluctuations; the overall market trend is still upward.
Is it possible to buy at the bottom now?
Although the market may have adjustments, there is still a possibility of a rebound. Now, it is worth considering buying in batches; the Bitcoin price between 93,300 and 92,000 is a good opportunity for short-term buying. However, it is important to note that this week there will also be the release of non-farm data and unemployment rates, and the specific trend will depend on the impact of the data.
How to choose quality altcoins?
When selecting altcoins, it is best to choose those with a larger market capitalization, such as ETH, BNB, SOL, etc. These coins have relatively smaller fluctuations and lower risk. Other small-cap altcoins are more volatile and carry higher risk, so remember to strictly set profit-taking and stop-loss levels to control risk.
