The information, opinions and judgments on markets, projects, currencies, etc. mentioned in this report are for reference only and do not constitute any investment advice.

Written by: 0xWeilan

On January 10, the non-farm data released by the U.S. Department of Labor far exceeded expectations, hitting the market hard. Although U.S. stocks and BTC had adjusted before, the heavy impact of the non-farm data made the mid-term interest rate cut expectations clear, and the pricing and trading logic of U.S. stocks and BTC needed to be redefined.

Although the market has experienced some adjustments since the Fed’s “hawkish” stance on the 18th, the lack of trading points in the next stage may lead to a loss of upward momentum. It will take time for all parties to find a trading direction.

This week, BTC opened at $98,347.65 and closed at $94,509.62, down 3.9% for the week, with an amplitude of 11.74%. The trading volume was larger than last week. The current price is still within the box consolidation area, and it has temporarily received support after stepping back on the second stage of the upward trend line during the upward period. If the funds are insufficient, the BTC price will fall below the upward trend line and may step back on the lower edge of the box at $87,000.

The expected reduction in US interest rate cuts is a foregone conclusion. Currently, US stocks are still in the stage of digesting and absorbing this repricing. If the market can stabilize and gradually start the economic growth trading point, BTC will return to the upward trend. Otherwise, it may bear huge retracement pressure. After all, BTC has recorded a large increase since the "Trump deal", while the Dow Jones has almost given up all the gains.

In the medium term, if the market stabilizes, BTC may have a chance to develop an independent trend, but the probability is not high.

Macro-financial and economic data

On Friday, the U.S. Department of Labor released the seasonally adjusted non-farm payrolls of 256,000, exceeding the previous value of 212,000 and far exceeding the expected 160,000. The unemployment rate was 4.1%, lower than the previous value of 4.2% and lower than the expected value of 4.2%.

Data shows that the US job market is strong, and the current high interest rate environment has not had a significant inhibitory effect on the current US economy. Therefore, the market believes that the Fed's focus will shift completely to curbing inflation. Combined with the Fed's "hawkish" speech on December 18, the market believes that the interest rate cut cycle since September 2024 will enter a pause state. According to CME FedWatch, the probability of a rate cut in January has fallen to 6.4%.

Major U.S. investment banks have all lowered their expectations for interest rate cuts in 2025, with most saying that the previous two rate cuts will be reduced to one, from June to the second half of the year. Bank of America even believes that there is no hope for a full-year rate hike, and that rate hikes may resume in the first half of the year, because employment data is expected to be better after Trump's economic policies are gradually implemented, and inflation will continue to rebound.

In this context, the US dollar index rose sharply to 109.65, approaching the high of 110. The one-year US Treasury yield fell to 4.223%, and the ten-year Treasury yield fell to 4.762%. London gold continued to rise to US$2,689.88 per ounce. The Nasdaq, Dow Jones and S&P 500 continued the adjustment trend since December 18, falling 2.34%, 1.86% and 1.94% respectively for the week.

For US stocks, the overall outlook is positive according to the major investment banks, but there may be many twists and turns in the first half of the year. The response to Trump's policies after he took office on January 20 and when economic growth will become the focus of trading have become key concerns in the short and medium term.

Stablecoins and BTC Spot ETF

Due to the relatively sufficient adjustments since December 18, there was no large-scale capital outflow in the BTC and crypto markets this week. Instead, there was an inflow of approximately US$708 million.

This week, BTC Spot ETF received inflows on 3 of the 4 trading days, with a total inflow of $313 million for the week. In terms of stablecoins, there were positive inflows on 4 days of the week, with a supply of $296 million.

As of the weekend of January 12, the crypto market remained relatively stable in terms of funds compared to the previous week, and the attitude of funds in the future market is very important.

Selling pressure and selling

As the market continued to decline, short-sellers intensified the selling, reaching the largest selling day in half a month on January 10. This week, short-sellers sold 164,517 coins, an increase from last week.

The selling of long-term investors has been shrinking for three consecutive weeks. This week, from a cyclical perspective, the second round of selling has been suspended. The next selling should be after the price breaks through $100,000 again.

The exchange inventory is still in a continuous downward trend, reaching 29,770 this week, the largest outflow in six weeks, indicating that BTC priced at $90,000 to $100,000 is still very attractive to many funds.

Cycle Indicators

According to the eMerge engine, the EMC BTC Cycle Metrics indicator is 0.625, and the market is in an upward phase.

END

EMC Labs was founded by crypto asset investors and data scientists in April 2023. It focuses on blockchain industry research and Crypto secondary market investment, takes industry foresight, insight and data mining as its core competitiveness, and is committed to participating in the booming blockchain industry through research and investment, and promoting blockchain and crypto assets to bring benefits to mankind.

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