Bitcoin returns to $100,000 mark, market sentiment reverses again?

Author: 1912212.eth, Foresight News

Bitcoin has been falling continuously since November 7, even falling below the US$90,000 mark at one point. The market is wailing. A series of macro negative factors have made the market accept the psychological expectation that it will fall to around US$85,000. Interestingly, Bitcoin finally stood firm above US$89,000 and then rebounded. It has been rising since the release of yesterday's CPI data. In the early morning of January 16, BTC once again broke through the US$100,000 mark.

Ethereum recovered all the way after falling below $3,000, and rose above $3,400 this morning. SOL also broke above $200 this morning after falling below $170. The altcoin market is recovering. During the 24-hour increase, some altcoins rose by 5%-8%. The AI ​​sector rebounded rapidly, LMT hit a record high, and AIXBT even exceeded $0.9, setting a record high.

In terms of contract data, Coinglass data shows that the total liquidation of the entire network in 24 hours was US$349 million, and the liquidation of short orders was US$221 million. The largest single liquidation amount occurred on Binance, which was an ETH/BTC contract worth US$12.6 million.

Recently, MicroStrategy founder Michael Saylor posted for the tenth consecutive week, "Is there a green dot missing on the MicroStrategy portfolio tracking chart?" suggesting that he will continue to increase his holdings of Bitcoin. Michael Saylor said at the Benchmark investor conference in Orlando recently that the company’s possible issuance of permanent preferred shares would be “the latest means of providing investors with leveraged investments in Bitcoin.” He noted that the company aims to provide investors with "1.5 times the returns and volatility of Bitcoin." Michael Saylor's firm buying and selling actions and determination have undoubtedly alleviated some of the selling pressure in the market.

The market suddenly swept away the pessimism and recovered. What is the real reason?

U.S. core CPI data unexpectedly fell, probability of interest rate cut in

March increased slightly

Yesterday evening, the U.S. non-seasonally adjusted CPI annual rate rose to 2.9% in December, rebounding for the third consecutive month to a new high since July 2024, in line with market expectations. The previous value was 2.7%. In addition, the non-seasonally adjusted core CPI in the United States recorded an annual rate of 3.2% in December, the lowest since August 2024, and market expectations were unchanged at 3.3%.

After the release of CPI data, the three major U.S. stock index futures rose sharply in the short term. Nasdaq futures are currently up 1.52%, S&P 500 futures are up 1.31%, and Dow futures are up 1.26%. The U.S. two-year Treasury yield fell further, falling 6.5 basis points to 4.299% on the day.

Before the CPI data was released, the probability of the Fed keeping interest rates unchanged in January was 97.3%, and the probability of cutting interest rates by 25 basis points was 2.7%. The probability of keeping current interest rates unchanged by March is 79.8%. After the data was released, the probability of the Federal Reserve cutting interest rates by 25 basis points in March rose slightly to 28.2%, from 23.2% the previous day. The probability of no interest rate cut in March is still as high as 71%.

Nick Timiraos, a senior Fed reporter known as the "New Fed News Service", believes that solid employment data, coupled with mixed signs of improving inflation, have led Fed officials to say that they will not see more evidence that the current interest rate level can effectively curb inflation. , they are still prepared to stand still in January.

Tina Adatia of Goldman Sachs Asset Management said that while the latest CPI data may not be enough to make a January rate cut possible again, it strengthens the view that the Fed's rate cutting cycle is not over yet.

Ellen Zentner of Morgan Stanley Wealth Management also believes that Wednesday's CPI data will not change expectations for a pause in interest rate hikes at the end of this month, but it should dampen some discussions about the Fed's possible interest rate hikes.

After the CPI data that worried the market came to an end, capital inflows into the crypto market continued again. According to data from Trader T and Farside Investors, the U.S. Bitcoin spot ETF saw a net inflow of US$754.79 million yesterday, reversing the unfavorable situation of five consecutive days of net outflows. Ethereum spot ETF saw a net inflow of US$59.12 million, once again injecting optimism into Ethereum.

Trump is about to take office, and the SEC is about to reform its

policies

Trump is only four days away from officially taking office. The market is looking forward to his new actions after taking office. As early as January 9, Reuters reported, citing people familiar with the matter, that the industry expected at least one order to be issued on January 20.

Trader Ansem has previously said that market uncertainty and fear may subside somewhat after Trump's inauguration, depending on Trump's remarks.

On January 16, Reuters also reported that Trump’s SEC team has reviewed some encryption enforcement cases pending in court and is expected to comprehensively reform encryption policies and may freeze some lawsuits that do not involve fraud allegations. Top Republican officials at the SEC are preparing to begin revamping the agency’s cryptocurrency policy as early as next week after Trump takes office, three people familiar with the matter said.

Among the measures being considered by commissioners Hester Peirce and Mark Uyeda are starting a process that could eventually lead to guidance or rules that would clarify under what circumstances the agency Treat cryptocurrencies as securities and review some of the cryptocurrency enforcement cases currently before the courts.

Affected by this news, some projects that had disputes with the SEC, such as XRP, rose by more than 17% that day.

Trump's coming to power and the SEC's regulatory reforms have contributed to the reversal of market pessimism.

summary

The subsequent trend of market conditions has attracted much market attention. Chris, a partner of Placeholder, recently tweeted that under the supportive U.S. policy environment, the returns of the crypto market in the next few years may no longer show parabolic surges, but more stable growth. Mainstream Coin retracements may become less extreme. Large drawdowns of 85%-95% typically occur when too much unrealized profits have accumulated in the market structure, coupled with market fear that these assets may never rise again. Today, the world is gradually realizing that Bitcoin and high-quality crypto assets are here to stay for the long term, so the "death pricing" experienced by mainstream coins may be a thing of the past (this does not include certain meme coins).

In addition, Chris believes that the launch of ETFs for both BTC and ETH (perhaps SOL will join soon) will bring more stable buying pressure to these assets. If you want to get an idea of ​​the magnitude of the retracement BTC may face, you can look at the 200-week simple moving average (200W SMA), which is our most reliable technical support during every bear market. Currently, this moving average is around $40,000, which means a bear market could see a 60% retracement. Chris still believes that 2025 will be a good year with volatility but full of opportunities.

The crypto market is obviously affected by macroeconomic and policy factors, and there are often large fluctuations at important market event nodes. Investors are advised to pay attention to risk control.