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Written by: 0xWeilan

Two weeks after the Fed's rate cut expectations turned downward, U.S. stocks continued to adjust, with only a rebound on Friday. BTC, which had previously adjusted more, was stronger this week. Despite the outflow of BTC Spot ETF, it remained stable above $91,000 and achieved five consecutive trading days of gains this week.

BTC opened at $93,563.35 and closed at $98,345.33, up 5.11% for the week, or $4,781.98, with an amplitude of 8.23% and a slight decline in trading volume.

As Trump approaches his inauguration, concerns about U.S. stock funds continue, and U.S. Treasury bond volatility is also rising, showing that the market has not yet found its direction.

Macro-financial and economic data

The US dollar index continued to rise, reaching a high of 109.5196 on Friday . London gold rose slightly to $2,639.62, the one-year US Treasury yield fell slightly to 4.171%, and the ten-year US Treasury yield continued to climb to 4.601%.

The three major U.S. stock indexes, Nasdaq, Dow Jones and S&P 500, rose 1.77%, fell 0.6% and fell 0.48% respectively. They were weak for most of the week and only saw strong buying on Friday.

The US will release non-farm data next Friday, which may provide direction for trading parties. If the non-farm data is lower than expected, it may increase expectations of further interest rate cuts by the Federal Reserve. Conversely, strong labor market data may reinforce the Fed's cautious stance, thereby limiting the possibility of aggressive easing policies. This will push up US Treasury yields and put pressure on US stocks.

Stablecoins and BTC Spot ETF

Since the change in expectations for a U.S. interest rate cut on the 18th, funds in the two channels of the crypto market, BTC Spot ETF and stablecoins, have experienced continuous outflows, and the situation has improved this week.

Funds in the BTC Spot ETF and stablecoin channels maintained the same direction, with outflows from Monday to Thursday. On Friday, the enthusiasm for long positions in US stocks recovered slightly, and funds in both channels saw strong inflows, with a total inflow of US$1.683 billion on that day. Stablecoins continued to flow in on Saturday and Sunday. Looking at the whole week, the outflow ended last week, and a small amount of net inflow was recorded for the whole week.

Although trading was sluggish this week, there was no collapse of funds in the market. By the weekend, the amount of funds on the exchange hit a record high of US$46 billion, showing that selling power is gathering. Once the external environment recovers, it will push BTC and other cryptocurrencies back on the upward trend.

Selling pressure and selling

After the BTC price surged to the range of $90,000 to $110,000, the selling pressure mainly came from short and long positions in the "new high consolidation zone" of $50,000 to $70,000. After the upward trend broke the expectation of the Fed's interest rate cut, there was no large-scale selling, and the selling pressure from long and short positions continued to weaken. As of this week, the BTC flowing into the exchange was only at a low level of 200,000.

During the same period, the stock on the exchange continued to flow out slowly. After the price adjustment, the floating profit level of short-handed hands fell to 12%.

Contract market rates and open interest have also been adjusted to lower levels.

This relatively stable chip structure and stablecoin accumulation show that there is no significant adjustment pressure within the market.

Cycle Indicators

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

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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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