On Friday (January 10), the dollar index maintained a strong performance, continuing to stand firm at 109.17, with initial jobless claims and FOMC meeting minutes supporting hawkish pricing ahead of the non-farm payroll report (NFP) release. Russian missile strikes in southern Ukraine resulted in at least 13 civilian deaths, spurring a rebound in gold prices to $2,670. The U.S. government has been authorized to liquidate the seized 69,370 Bitcoins from the Silk Road, triggering panic and causing Bitcoin to plummet to around $92,600.
The U.S. government has been approved to sell 69,370 Bitcoins.
According to cryptocurrency reports, the U.S. government has been authorized to liquidate 69,370 Bitcoins seized from the infamous Silk Road market. Court documents show that U.S. Chief District Judge Richard Seeborg dismissed a motion to block the seizure, allowing the Department of Justice to proceed with the sale of the cryptocurrency.
The scale of the sell-off has alarmed traders, further exacerbating bearish resistance amid the beginning of a downward trend this week. Bitcoin prices reacted swiftly, plummeting from $95,060 to a low of $91,800, as shown in the figure below.
Currently, the market is largely speculating whether this sell-off occurred before Donald Trump's inauguration as President of the United States, as Trump has consistently supported Bitcoin during his campaign. Trump's proposal includes using seized funds to establish a national Bitcoin reserve, which adds irony to the U.S. government's narrative on cryptocurrency liquidation.
Russian missile strikes in southern Ukraine resulted in at least 13 deaths.
AP News quoted officials stating that on Wednesday afternoon local time, Russian missile strikes hit the southern city of Zaporizhzhia, resulting in at least 13 civilian deaths and about 30 injuries.
A video released on the Telegram channel of Ukrainian President Zelensky shows civilians lying on city streets scattered with rubble. The video shows them being treated by emergency service personnel and being carried away on stretchers.
In this ongoing war that has lasted nearly three years, Russia has frequently launched airstrikes on civilian areas. This largest conflict in Europe since World War II has resulted in thousands of civilian deaths.
Zelensky and regional governor Ivan Fedorov stated that Wednesday's attack resulted in at least 13 civilian deaths. Just minutes before the attack, Fedorov had warned that the Zaporizhzhia region might be targeted by high-speed missiles and devastating glide bombs.
Fedorov stated that the Russian army began launching glide bombs at Zaporizhzhia in the afternoon, with at least two bombs attacking residential buildings in the city.
He announced that Thursday will be a day of mourning in the region, with Zelensky writing on Telegram: "Nothing is more brutal than bombing a city, knowing that ordinary civilians will suffer."
Dollar holds above 109 ahead of non-farm payroll; initial jobless claims and FOMC minutes support hawkish stance.
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. At the same time, the ADP report indicated that 122,000 new jobs were added in the private sector in December, below expectations.
The FOMC meeting minutes highlighted assumptions regarding trade and immigration policies, with officials concerned that inflation may take longer to reach 2%. Most participants supported a 25 basis point rate cut in December, but the upside inflation risks prompted policymakers to remain cautious.
U.S. yields are stabilizing, with the 10-year Treasury yield hovering around 4.67%, while the 30-year Treasury yield remains around 4.90% after the auction week ends. Although demand for the 10-year Treasury has been lukewarm, the 30-year Treasury has shown strong performance, reflecting investor resilience.
The loose financial environment persists, with the Chicago Fed's indicator remaining loose for ten consecutive weeks, helping to stimulate economic growth as the Fed prepares for potential fiscal stimulus measures in the future.
The market is cautious ahead of the non-farm payroll data for December to be released on Friday, with investors waiting for clarity on labor market momentum and potential policy impacts. Total employment is expected to fall from 227,000 to 160,000.
Dollar Technical Analysis
FXStreet analyst Patricio Martín indicated that the dollar index is holding above the 20-day simple moving average (SMA), maintaining a constructive trend despite intermittent pullbacks. Technical indicators still lean positive, although they seem to be flattening rather than accelerating further.
Key support is around 108.40, with 108.00 if bearish momentum strengthens. As long as concerns about inflation and stable yields persist, the dollar index could remain elevated around 109.00, although the trading range may narrow in the short term.
Gold Technical Analysis
FXEmpire analyst Bruce Powers stated that on Thursday, gold prices continued to rise to a new short-term high of $2,678, breaking through the 61.8% Fibonacci retracement level of $2,671. The high point from Wednesday stopped at the 61.8% level. It appears that Thursday's rebound of the 50-day moving average and subsequent daily closing price above that line indicates sustained strong demand momentum.
This is the first close above the 50-day moving average since December 13, 2024, indicating improved demand. Note that trading hours in the futures market may be shortened on Thursday due to the national day of mourning for former President Jimmy Carter, which could affect trading levels.
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 regarded as a priority. If the integrity of the channel structure is maintained, resistance may be seen near the downward trend line, followed by a drop and price decline.
The 78.6% retracement level of $2,695 can also be considered, as it is relatively close to the trend line. Overall, unless the price breaks above the recent swing high of $2,726, the bullish reversal of the bearish correction is not apparent, as this is a lower swing high and part of the downward trend price structure.
In addition to the channel pattern, the current short-term rise is part of a consolidating range being formed, defined by a downward trend line at the top and an upward trend line at the bottom, connecting the volatility low of $2,582 on December 19. Overall, the consolidation range has been shrinking and shows 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 typically accompanied by price increases—trends and volatility rising.
Price action around these two lines will signal early signs of either an upward or downward breakout. The pattern on the weekly chart suggests a possible bullish resolution. This week, the upward breakout surpassed last week's high of $2,665, triggering a bullish reversal. It is very likely that a breakout will be confirmed this week, with the closing price potentially above last week's high.
Bitcoin Technical Analysis
FXStreet analysts say that the outlook for Bitcoin prices shows signs of a potential reversal, as the double bottom pattern at $90,000 suggests a possible rebound.
This form of technology has historically been known for signaling trend reversals, and the rise 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 could still emerge.
The chart reflects the dominance of bearish traders, and significant selling pressure may lead 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.
Currently, the double bottom and increased volume provide a cautiously optimistic outlook for a rebound.
Sustained breaks above the $93,217 VWAP level may open the door to $100,000, consistent with the bullish target implied by the double bottom structure.
