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BTC "V-Bounce", Bull Market Trend to Continue? | Trader's Insight

CMed

25-01-15 16:53

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In the midst of last week's continued questioning of the Fed's pause on rate cuts, consecutive bearish non-farm payroll data emerged, revealing the robustness of the U.S. economy. The U.S. dollar index hit new highs, indicating a perceived easing of employment concerns and potentially weakening the demand for a Fed rate cut. From major financial institutions like Citibank and Goldman Sachs to individual traders, bets on a 2025 Fed rate cut are being scaled back.

Bitcoin's price also exhibited significant "whiplash," fluctuating by ten thousand points. Many in the market jokingly said, "The price didn't change, but my position disappeared." Market sentiment swung rapidly from greed to panic and back to greed. Despite yesterday's favorable PPI data, inflation concerns have not abated, raising expectations for a Fed rate cut.

Less than a week since Trump took office, tonight at 21:30 GMT+8, the U.S. CPI data will be released. Will a 2025 rate cut be put on the agenda? Has the Trump narrative already been priced in, or is there still significant potential? Let's hear the traders' opinions.

Macro Analysis School

@Maoshu_CN

Today, the market data focuses on Bitcoin's trading volume, referring to the C-wave third wave mentioned in the order book. The third wave often accompanies a sharp decline and panic selling, leading to a surge in short-term trading volume. By observing the change in Bitcoin's trading volume, we can determine if the third wave has completed!

As the overall market declines, Bitcoin's dominance steals ETH's altcoin thunder, accelerating the market's risk aversion.

A 25% increase in BTC trading volume, compared to the overall market's 150% increase, suggests that the incremental increase is not significant enough, indicating that the third wave completion phase has not been reached. Altcoin trading volume surged by 277%, with BTC breaking key levels today, causing ETH and many mainstream altcoins to break critical support levels. The altcoin market likely saw a large-scale liquidation leading to a surge in trading volume.

Regarding funds, the market's stock volume increased by 4 billion, reaching 212.5 billion.

USDT: Official data shows 137.49 billion, only a 0.03 billion increase compared to last Saturday. Despite the significant market downturn, net outflows in the Asia-Europe markets unexpectedly paused—a small positive sign. At the same time, USDT fund activity doubled, likely due to extensive liquidation leading to a spike in trading volume.

Overall, the current fund situation indicates that funds that ended trading in a downtrend did not see a widespread exit but instead chose to stay in the market or return to trading. This situation does not currently belong to a panic selling stage.

@Felix_Hsu

In the US evening session on Monday, funds did not experience FOMO and saw a net outflow for four consecutive days, even as the price rose from 89000 to 97000. This is also an important reason why I do not consider 89200 as the bottom. The price of 89000 consumed a large amount of funds from non-US retail investors, and a significant number of short-term holders who bought the dip took profits, as seen in URPD data.

According to SoSoValue data, the Bitcoin spot ETF saw a total net outflow of $210 million on January 14 (US Eastern Time), marking the fourth consecutive day of net outflows. The WisdomTree ETF BTCW saw the highest net inflow yesterday at $10.2372 million, with a total historical net inflow of $239 million. This was followed by the VanEck ETF HODL, which saw a net inflow of $5.4596 million. The total net asset value of Bitcoin spot ETFs is $108.981 billion, with an ETF net asset ratio (market value as a percentage of total Bitcoin market value) of 5.7%. The cumulative net inflow has reached $35.722 billion.

@Phyrex_Ni

Since there was no second wave of risk aversion on Tuesday, it either means that investors have already priced in the CPI sufficiently, or positive sentiments have offset any negative sentiments that the CPI could have brought. In fact, when it comes to CPI data, I don't really think this time's data is significant.

Because it is almost a certainty that the Fed will not cut interest rates in January, even with the inflation in December. It is highly likely that the Fed won't cut rates even in March. According to the dot plot, there are only two rate cuts projected for 2025, possibly both in the second half of the year, with little to no chance of rate cuts in the first half of the year.

So, a single CPI data point is not even as important as the NFP data. After all, the current inflation has already been anticipated by the Fed to some extent. Of course, lower inflation data is more market-friendly, but even if December's inflation drops to 2%, the Fed may not immediately cut rates.

Turning back to BTC data, although the turnover rate has increased, with the rebound in BTC price, panic has not yet emerged. Currently, those exiting are mostly short-term profit-seeking investors. Early investors, including loss-bearing investors, do not show obvious signs of selling off, indicating that at least for now, investor sentiment remains relatively stable.

Technical Analysis Enthusiast

@CryptosLaowai

BTC has broken through the first trend line, with expectations to break the second. In the short term, it's waiting for the moving average to catch up with the price, taking a break before continuing to rise.

@RaizelXbt

Added more BTC long positions here

@Alan416993125

Reviewing history, history is the teacher. This kind of structure appears many times, and big retracements usually follow. At least a retracement of 50% to 0.618% of the previous major wave is needed. The most brutal one was in 2019, retraced back to the starting point of the rise, which is an extreme case requiring various factors. We only talk about normal scenarios. The 85,000 mentioned last week is calculated based on this.

Data Analysis Enthusiast

Options Market Data:

The likelihood of ETH price exceeding 4K by the end of the month is only 10.62%.

@CryptoPainter_X

As the price continues to rise, the premium is moving back towards 0, indicating that spot demand is still entering the market. When the premium fully recovers to a positive value and reaches a high level, the entire BTC market can be considered to have entered a safe mode.

Therefore, the current price increase and simultaneous recovery of the premium state actually represent spot demand entering the market, with futures longs gradually taking profits and futures shorts gradually adding to their positions;

When the premium returns to near 0, it indicates that the futures longs have almost finished taking profits. If the shorts do not further add to their positions, the premium will not rise. Conversely, if the shorts continue to add to their positions, the premium will return to positive;

In short, when the premium returns to zero, it is easy to see a reversal or continuation of a minor trend;

In a bullish trend, every time the premium returns to zero, it is either a pullback to the position or an indication of a bearish trend. Similarly, in a bearish trend, every time the premium approaches 0, it is either a rebound to the position or an indication of a bullish structure;

Based on the pinning breakthrough below $90,000, it can be seen that market demand has weakened, hence the behavior of breaking below key support. The current price range has certain conditions to become a "distribution range"; similar to the choppy market of 2024, signs of distribution do not necessarily mean the market is bearish, and stronger demand can still drive the price up;

On-Chain Whale Activity

The "Whale who bought low and sold high $ETH for a $33.67 million profit" withdrew 10,000 ETH from Binance on January 13, worth $30.76 million, with a cost of approximately $3,075.57 per ETH; they currently hold a total of 55,166.12 ETH, valued as high as $169 million

One month later, the "12.13 Position of 3669 ETH in New Address" once again added 4817 ETH to its position during Monday's market crash, worth $14.92 million; Since December 5, 2024, this address has accumulated a total of 13,479 ETH, with a total value of $42.78 million, cost of $3622, and currently holding an unrealized loss of $5.9 million

An ETH swing trader with an 83.3% win rate reduced their position by 5872.63 ETH at an average price of $3106.53 (which includes the portion added during last night's crash), with a small loss of $530,000; The two addresses currently hold a remaining 11,252.98 ETH (approximately $35.39 million) at a cost of $3196.85