BTC 'V-Reversal', Bullish Trend Continues? | Trader's Insight

In the past week, amidst continuous questioning of the Fed's pause in rate cuts, consecutive bearish non-farm payroll data has emerged, demonstrating the robustness of the U.S. economy. The U.S. dollar index has hit new highs as the employment situation seems to be improving, weakening the case for further rate cuts by the Fed. From major financial institutions like Citibank and Goldman Sachs to individual traders, bets on a 2025 Fed rate cut are being reduced.

Bitcoin's price has also exhibited a significant "wipeout" state, fluctuating up and down by ten thousand points. Many in the market jokingly say, "The price remains the same, but positions are gone." Market sentiment has also shown massive swings, rapidly transitioning from greed to panic and back to greed. Yesterday's favorable PPI data and unresolved inflation concerns have increased expectations of a Fed rate cut.

Less than a week since Trump took office, at 9:30 PM Beijing time tonight, the U.S. CPI data will be released. Will a 2025 rate cut be put on the agenda? Has the Trump narrative been fully priced in, or is there still significant potential upside? Let's hear the traders' perspectives.

Macro Analysis School

@Maoshu_CN

Today, market data is focused on Bitcoin's trading volume, referencing the mention of the C-wave third wave on the chart. The third wave is often accompanied by a sharp decline and panic selling, leading to a surge in short-term trading volume. Therefore, observing the increase in BTC trading volume can indicate whether the third wave has completed!

In the overall market decline, Bitcoin's dominance is draining Ethereum and altcoins, accelerating the decline in market risk appetite.

With a 25% increase in BTC trading volume compared to a 150% increase in overall market trading volume, the significant increase in volume is not evident enough, indicating that the third wave is likely not yet complete. Altcoin trading volume has increased by 277%, and today, as BTC fell below a key level, it led to Ethereum and many major altcoins breaking key supports. The altcoin market likely experienced a massive liquidation leading to a surge in trading volume.

On the funding side, the market's net inflow has increased by 400 million, reaching 2.125 trillion currently.

USDT: Official data shows 137.49 billion, a mere 0.03 billion increase from last Saturday. Despite the significant market decline, there was surprisingly a temporary halt in net outflows in the Asian and European markets, which is a small positive data point. Additionally, USDT's fund activity has doubled, likely due to a large-scale liquidation causing a surge in trading volume.

Overall, the current fund situation indicates that funds that ended trading during the decline did not see a widespread exit but instead chose to stay in the market or return to trading, indicating that we are not currently in a panic-selling phase.

@Felix_Hsu

During the US afternoon session on Monday, there was no FOMO in the funding, with a net outflow for four consecutive days, even as the price moved from 89000 to 97000. This is one of the key reasons why I do not consider 89200 to be the bottom. The drop from 89000 consumed a large amount of funds from non-US retail investors, as evidenced by the URPD data showing that many short-term holders who bought the dip took profits.

According to SoSoValue data, the Bitcoin spot ETF had a total net outflow of $210 million on the 14th of January (US Eastern Time), with a net outflow for four consecutive days. The WisdomTree ETF BTCW had the highest single-day net inflow yesterday, with $10.2372 million, bringing the total historical net inflow of BTCW to $239 million, followed by the VanEck ETF HODL with a single-day 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%, and a total historical net inflow of $35.722 billion.

@Phyrex_Ni

Since there was no second wave of risk aversion on Tuesday, either investors had sufficient expectations for the CPI, or positive sentiment among investors offset any negative sentiment that the CPI might have brought. In fact, in terms of CPI data, I don't really think this data is significant.

Because the likelihood of the Fed not cutting rates in January is already close to 100%, the December inflation data is unlikely to change the Fed's decision. It is even probable that the Fed will not cut rates in March. If we look at the dot plot, there are only two rate cuts in 2025, and they are very likely to occur in the second half of the year, with no chance of a rate cut in the first half of the year.

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

Turning back to BTC data, although the turnover rate has increased, with BTC's price rebounding, panic has not yet emerged. Currently, those exiting are mostly short-term profit investors. Early investors, including those at a loss, do not show significant signs of sell-off. This indicates that at least for now, investor sentiment remains relatively stable.

Technical Analysis Enthusiast

@CryptosLaowai

BTC has broken through the first trend line, anticipating a breakthrough of the second. In the short term, 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 a teacher. This kind of structure appears frequently, and there are usually large-scale retracements afterward, at least retracing 50% to 0.618% of the previous major wave. The most brutal one was in 5.19, returning to the starting point of the rise. That was an extreme case requiring various factors to support it. We are only talking about normal circumstances. The 85,000 mentioned last week is calculated based on this.

Data Analysis Enthusiast

Options Market Data:

The probability 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 a value of 0, indicating that spot demand is still entering the market. Only when the premium fully returns to a positive value and reaches a high level will the entire BTC market enter a safe mode.

Therefore, the current price increase and simultaneous recovery of the premium state actually represent spot demand entering the market while futures longs gradually take profit and futures shorts gradually add to their positions;

When the premium returns to near 0, it means that the futures longs have almost finished taking profit. If the shorts do not further add to their positions, the premium will not increase. 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 minor trend reversal or continuation;

In a bullish trend, every time the premium returns to zero, it is either a pullback to the right level or an indication of a bearish trend shift. The same applies to a bearish trend; every time the premium approaches 0, it is either a rebound to the right level or an indication of a bullish structure shift;

And based on the needle drop below $90,000, it can be seen that market demand has weakened, which is why there was the behavior of key support being needle dropped. The current price range has the conditions to become a "distribution zone." Similar to the oscillating market in 2024, the presence of distribution signs does not mean the market is ultimately bearish. Strengthened demand can still drive prices up;

On-Chain Whale Activity

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

After a month, the "12.13 Position at 3669 ETH New Address" once again increased its position by 4817 ETH during Monday's market sell-off, worth $14.92 million; since December 5, 2024, this address has accumulated a total of 13,479 ETH, valued at $42.78 million, with a cost basis of $3622, currently facing 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 (including the part acquired during last night's sell-off), with a small loss of $530,000; the two addresses currently hold 11,252.98 ETH (approximately $35.39 million), with a cost basis of $3196.85