Weekly BTC Market Review: Fluctuations Continue, Market Awaits Breakthrough Direction

This week, the price of Bitcoin maintained a narrow range of fluctuations, opening at $96,481.47 and closing at $96,119.88, with a slight weekly decline of 0.37%. The price volatility further narrowed to 5%, and trading volume has significantly decreased. Currently, BTC is still operating within the range of $89,000 to $110,000.

Despite the release of important information this week such as the U.S. January CPI data and adjustments to tariff policies, the impact on the cryptocurrency market has been limited. Notably, as the prospects for resolution in the "Russia-Ukraine conflict" appear to improve, market sentiment seems to be turning optimistic. The U.S. dollar index has fallen sharply, U.S. bond yields continue to decline, and U.S. stock indices are once again approaching historic highs.

In terms of macroeconomics, the US CPI data for January exceeded expectations across the board. The CPI increased by 3% year-on-year and 0.5% month-on-month, both higher than market expectations. The core CPI rose by 3.3% year-on-year, also above expectations. This indicates that the economy remains strong, with inflation rebounding. Market expectations for interest rate cuts this year have further decreased, now leaning towards only one rate cut around December.

The Federal Reserve Chairman stated in the semi-annual monetary policy report to Congress that if the economy continues to grow and inflation does not quickly fall back to the 2% target, the current policy may be maintained for a period of time. Conversely, if the labor market unexpectedly weakens or inflation declines more than expected, there may be a moderate easing of monetary policy. This statement is generally consistent with previous remarks.

In terms of geopolitics, the "Russia-Ukraine conflict" seems to be making progress towards resolution. If the conflict can come to an end, it will bring significant benefits to the global economy and financial markets. As a result, the dollar index fell by 1.22% to 106.813, and the 10-year Treasury yield dropped to 4.48%. All three major U.S. stock indices rose during the week, with the Nasdaq up 2.58%, the S&P 500 up 1.47%, and the Dow Jones up 0.55%. Gold prices increased by 0.75%, reaching a new high of 2942.60 dollars per ounce during the session.

In the Bitcoin market, the selling pressure has significantly weakened this week. Short-term and long-term holders collectively sold 137,178 BTC, a substantial decrease compared to last week. The trading volume on exchanges has also noticeably shrunk, indicating that short-term panic selling has greatly reduced. Currently, the average profit level for short-term holders has dropped to 6%, with weak motivation for both profit-taking and stop-loss. Long-term holders paused selling this week, increasing their holdings by 8,000 BTC.

In terms of capital flow, stablecoins and BTC/ETH spot ETFs saw a total outflow of $252 million. Among them, stablecoins inflowed $362 million, BTC spot ETFs outflowed $584 million, and ETH spot ETFs outflowed $29 million. The outflow of funds from the ETF market is the main reason for BTC's underperformance compared to US stocks.

On the technical side, the BTC price has broken below the second upward trend line, fluctuating narrowly around $97,000. A directional choice is expected in the short term. According to a certain indicator, the BTC cycle indicator is at 0.75, and the market is still in an upward phase.