Market Watch Weekly Report: Cryptocurrency market volatility continues, focusing on BTC and funding dynamics – PANews

Crypto market predictions and guidance for next week:

The crypto market may continue to fluctuate and pull back next week. Focus on BTC core asset allocation, avoid chasing highs, and carefully plan long-term bargain hunting opportunities.

Market Forecast:

1. Macro environment:
   • A strong job market boosted sentiment towards risk assets, but concerns about slowing economic growth (such as the ADP data) could cause short-term volatility.
   • If there is no sign of easing in monetary policy , the high interest rate environment will continue to suppress liquidity in the crypto market.
   • The overall macro environment is neutral to bearish , and we need to pay close attention to policy trends and inflation data.
2. Funds Flow:
   • The issuance of stablecoins has rebounded (average daily amount of +263 million USD), and market liquidity has improved, but funds are mostly on the sidelines.
   • ETF inflows hit a recent high (+USD 462 million), and institutional interest rebounded, but the inflows had limited impact on BTC.
3. Market Sentiment and Structure:
   • BTC’s market share remains stable, and funds from non-mainstream assets (such as altcoins and Meme coins) continue to flow out.
   • Market sentiment has returned from greed to neutral, with significant selling pressure but some funds beginning to try to bottom-fish in the short term.

Key risks:

1. BTC faces great resistance in the psychological range of $90,000-$100,000, and a false breakout may trigger a larger pullback.
2. Altcoins are under pressure, and continued capital outflows may further drag down the overall market performance.
3. Macroeconomic uncertainties (such as fluctuations in the Federal Reserve’s policies and economic data) remain the biggest variables.

Key opportunities:

1. A pullback in BTC prices to the $85,000-$90,000 range may attract long-term funds and provide high-quality layout opportunities.
2. If the inflow of funds into ETFs and stablecoins continues to increase, it may provide temporary support for BTC.
3. After the substantial adjustment of altcoins, some high-potential projects may have rebound opportunities, but the timing still needs to be chosen.

1. Macro

1.1 Macro indicator trigger signal table-BTC market trend guidance

1.2 Summary and Outlook of Future US Economic Policies

Final conclusion:

1. The US economy is undergoing a transition from an overheating phase to a stagflation phase . Although the stimulus effect of fiscal and monetary policies still exists, the effect is gradually weakening, especially the high inflation and high interest rate environment limit the policy space.
2. Although gold may perform better than US stocks, the overall earnings expectations are lower than the previous two years. The pressure on US economic growth has increased, while the room for macro policy adjustments is limited.
3. In this environment, the performance of the cryptocurrency market will be affected by many factors. The market’s attitude towards risk will be mainly determined by macroeconomic policies, employment data, and the effectiveness of inflation control .
4. Investors need to remain flexible in a highly volatile market environment and pay close attention to data releases and policy details in order to make timely market decisions.

Macroeconomic data to watch next week

Based on the current macroeconomic dynamics, the following factors are worth paying attention to and may have a significant impact on the cryptocurrency market:

2. Industry Analysis

Interpretation of the impact of this week’s on-chain data on BTC

Combined with this week’s on-chain data, the following analyzes the impact of these data on the BTC market from the aspects of capital flow , price indicators , and trading volume , and evaluates the key risks and opportunities in future trends.

2.1 Fund Flow

2.1.1 Stablecoin Fund Flow

• Data:
  • This week (1/3-1/9), the total amount of stablecoins rebounded to 182.922 billion US dollars, an increase of 1.841 billion US dollars from last week, and the average daily issuance was 263 million US dollars.
  • Starting from mid-December, stablecoin funds first experienced a small outflow and pullback (a total decrease of US$1.809 billion in the two weeks from December 20 to January 2), and then a large inflow occurred this week.
• Interpretation:
  • The issuance of additional stablecoins is an important indicator for measuring market liquidity. The recent return of stablecoins indicates that market liquidity is gradually improving , which may indicate that more funds are flowing back into the crypto asset market.
  • The issuance of additional stablecoins this week provided some support for the BTC price, but BTC did not see a sharp rise, indicating that the return of stablecoins is currently mainly on the sidelines and has not yet been fully transformed into purchasing behavior.

2.1.2 ETF Fund Flow

• Data:
  • This week, ETF net inflows were US$313 million, an increase of US$58 million from last week.
  • The inflows translated into 2,980.21 BTC, or 0.015% of the circulating supply of Bitcoin. This was the strongest week for ETF funds in the past three weeks.
• Interpretation:
  • The inflow of ETF funds shows that institutional investors’ confidence in BTC has recovered, especially the ETF dynamics in the US market directly affect the trend of BTC.
  • However, compared with the overall Bitcoin market capitalization (over 500 billion US dollars), the proportion of ETF fund inflows is still relatively small, and the market is difficult to be driven entirely by ETF funds. We need to pay attention to whether the ETF fund inflows can continue to expand in the future.

2.1.3 Premium or discount in over-the-counter transactions

• Data:
  • The OTC premiums of USDT and USDC have shown a fluctuating trend recently, with USDT’s OTC premium stabilizing at around 99.97% and USDC’s at 100.59%.
  • The OTC premium has not risen significantly, indicating that market demand has not heated up rapidly.
• Interpretation:
  • The low OTC premium of stablecoins shows that the enthusiasm of capital entering the market is weak, and the overall market sentiment is still cautious, mainly focusing on stock game.

2.2 Related price indicators

2.2.1 Cryptocurrency Market Value

• Total market value performance:
  • This week, the total market value of cryptocurrencies rose first and then fell. The highest market value during the week reached 3.76 trillion. As of the 10th, the market value reached the lowest point during the week at 3.37 trillion, a drop of 10.37%.
  • BTC’s market capitalization remains at around 58%, indicating that BTC is still the core asset that dominates market capital flows. The daily line has reached the end of the triangle convergence and is expected to choose a new direction soon.
• Interpretation:
  • The decline in the total market value of the crypto market indicates that funds are flowing out of the overall market, but the stability of BTC’s share shows that mainstream assets are still a safe-haven option for funds.
  • Non-BTC assets such as altcoins and meme tokens have performed more weakly and may see larger outflows.

2.2.2 BTC overall transaction volume

• Data:
  • This week, the price of BTC fell from $98,340 on January 6 to $92,499 on January 10, a cumulative drop of 5.95%, indicating significant selling pressure in the market.
  • Trading volume increased significantly on January 7, reaching 91.796 billion U.S. dollars, which coincided with the BTC price breaking through $100,000 ($102,223) on the same day.
  • In the following two days (January 8 and January 9), the trading volume further soared to 111.44 billion and 117.038 billion US dollars, but the price quickly fell to 95,050 US dollars, indicating significant signs of capital outflow.
• Interpretation:
  • The large-volume rise on January 7 showed that the market tried to break through the key psychological level of $100,000, but failed to form an effective breakthrough, which immediately triggered a large amount of profit-taking selling, leading to a subsequent price correction.
  • The large-volume decline indicates that the short-selling forces are dominant. The current market has different views on the high valuation of BTC, which may be related to macro uncertainties (such as the Federal Reserve’s policies and the rebound of the US dollar index).

in conclusion

This week, the BTC market showed an increase in capital flow but a cautious sentiment. The future trend may continue to fluctuate between $90,000 and $100,000. Investors need to be alert to the risk of false breakthroughs, seize the opportunity of callback layout, and optimize the configuration with mainstream assets as the core.

Aeolus Wheel

Summary and outlook for this week

1. Summary

• Altcoins generally fell : The altcoin market fell sharply this week, and market sentiment returned to a neutral range.
• Large amount of funds outflow : Net outflow increased dramatically this week, up about 7,800% from last week, showing a bottom-fishing trend in the short term.
• Three major market share indicators: BTC’s market share still shows signs of rising, while OTHERS.D and USDT.D have no obvious progress and are not much different from previous weeks.

2. Recommendations

• Strategic advice : If you have any positions, keep them unchanged and observe the trend of BTC and the impact of Trump on the subsequent market.

Combining this week’s macroeconomic indicators and market data analysis, the altcoin market is experiencing continuous adjustments and capital outflow pressure. The following is an analysis of this week’s altcoin market performance from multiple dimensions, including altcoin season indicators, capital flows, BTC market share, OTHERS market share, and USDT market share , and looks forward to possible future development paths.

Cottage Season Indicators

This Friday, the altcoin index was 51, which did not change much compared to last week, but it experienced dramatic fluctuations during the week along with BTC, falling from 59 to 41 at one point, and is now back to the middle range.

It can be observed from Cryptobubbles that almost all altcoins have fallen by 5~30% during the week. Some altcoins have even recovered their gains in 2024. Market sentiment has returned from greed to a neutral stage.

Bull market escape indicator list

This week we joined Coinglass to observe the current BTC operation stage based on the bull market long-term indicator collection compiled by blogger sol@DtDt666, which is incomprehensible to bloggers. This collection includes 30 commonly used top-escape indicators on the market. If multiple important indicators show that they have entered the top-escape range in subsequent operations, it means that the market may have been overheated, and it is recommended to escape the top.

Currently, none of the 30 indicators has entered the escape range. The comprehensive recommendation of the collection is to continue holding the spot. We will continue to track this collection and update the indicator data in real time.

Inflow of copycats

This week, the market showed a large amount of net outflow trend with the BTC pullback, with a net outflow of 3.507 billion US dollars in all currencies, and the capital outflow increased by 7895% compared with last week (last week’s outflow data was 43.86 million), which was greatly affected by the BTC pullback. On the positive side, the net inflow of all currencies on the 6-hour level was 127 million, and most sectors showed net inflows, indicating that some funds in the market believed that the bottom had been reached in the short term and had begun to buy the bottom. We expect that the market will still fluctuate violently before and after Trump takes office, so the safest way is to hold the spot and wait for the direction to be clear before trading on the right side.

BTC market share (ratio, growth rate)

BTC market share has confirmed a new level of support in the short term. This week’s trend fell below the long-term support line on the left and then rebounded back to the resistance range. It may continue to rise in the short term. The strong resistance level above is still at the upper edge of the resistance range. The long-term trend can only be further observed after the Trump market finally determines its direction.

OTHERS.D

The market share of all tokens outside the top ten continued to test the Fibonacci 0.236 level this week, with no major changes.

USDT Market Share

Finally, as for USDT.D, like OTHERS.D, there has been no significant progress in the past few weeks. This week, USDT.D rebounded from the lower support range and touched the long-term support line again. If BTC continues to fluctuate, these two indicators should not determine the direction for the time being.

Special thanks

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Written by: Sylvia / Jim / Mat / Cage / WolfDAO

Edited by: Punko / Nora

Thanks to the above partners for their outstanding contributions to this weekly report. This weekly report is published by WolfDAO for learning, communication, research or appreciation only.

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