Matrixport Market Observation: Gold prices hit new highs, and risky funds will not be clear in the future

In the past week, BTC has experienced large fluctuations due to short contracts, with the maximum intraday amplitude reaching 11.69%. On February 3, BTC prices fell to $91,231, the lowest point since mid-January, and the volatile market caused spot short-hand losses to exceed $800 million. At 0 o 'clock the next day, BTC price rebounded to $98,842 and fluctuated around $97,000. Recently, ETH short positions hit a record high, with ETH spot hitting a low of $2,125.01 on February 4, and has rebounded to about $2,700, with a maximum volatility during the week of 10.22% (the above data is real-time data of Binance spot at 15:00).

The dollar strengthened due to the impact of tariff policies released on February 3 and the non-farm data released on February 10, and the dollar index rose to 108.31 on the 10th, and gold as an inflation hedging tool broke through $2,900, setting a new high. BTC and ETH have experienced major fluctuations in the short term, and market sentiment is more cautious. Although it has stabilized after experiencing severe fluctuations, the future trend will still be affected by the continued impact of macroeconomic data and market sentiment.

Market inventory

BTC activity drops to a new year low, but long-term holder demand increases

On February 7, CryptoQuant reported that BTC network activity fell to a new year low, but some indicators showed bullish potential. The BTC Network Activity Index has dropped 15% since its all-time high in November 2024 and is currently at 3,760, the lowest since February 2024. At the same time, the number of BTC transactions and the volume of memory pool transactions also decreased significantly.

But data shows that demand for long-term holders has risen in the near future. Long-term holders growth is often accompanied by a rebound in BTC prices. Therefore, despite weak BTC network activity in the short term, increased demand from long-term holders may have a positive impact on BTC prices.

ETH short positions hit record highs, markets face volatility risks

On February 10, ETH's trading price was $2636, with a market value of $317 billion and a daily trading volume of $19.5 billion. ETH short positions surged to 40% in the past week, setting an all-time high. According to Coinglass data, the 24-hour liquidation has reached $44.65 million, indicating intensified market volatility. In addition, the Ethereum Foundation recently shifted 50,000 ETH, further triggering investors' caution.

ETH's short positions have increased by 500% since November 2024. Especially on February 2, ETH prices plummeted 37% in just three days due to trade war concerns. Despite strong market trading volumes, ETH prices failed to recover and recent gains lag behind other altcoins.

Despite the increase in short positions, ETH still attracts capital inflows. In December 2024, ETH attracted more than $2 billion in new funds, and the inflow of ETH spot ETFs exceeded that of BTC spot ETFs, indicating that investors remain confident in ETH. Recently, ETH prices have been under strong selling pressure and short positions have not weakened. Investors are advised to pay attention to whether ETH will fall further or short squeezes amid the accumulation of short positions.

Trump announces "reciprocal tariffs", significantly raising steel and aluminum tariffs trigger market turmoil

On February 10, the White House announced a 25% tariff on all imported steel and aluminum, and canceled the tax-free quota and exemption policies for some trading partners. This measure caused the originally planned 25% tariffs on Canada and Mexico to be deferred, and market sentiment fluctuated for a while. Although BTC and U.S. stocks rebounded after the plunge, market sentiment remained cautious.

The three major U.S. stock indexes plunged more than 1% during the session, erasing the weekly gains. U.S. Treasury yields rebounded due to inflation expectations, with the 1-year Treasury yield rebounding to 4.23% and the 10-year rebound to 4.49%, putting pressure on the stock market. Gold, due to rising demand for safe-haven gold, achieved six consecutive increases in six weeks, with an increase of 2.18%.

Hong Kong Investment Immigration recognizes BTC and ETH for the first time as proof of assets

On February 7, 2025, the Hong Kong Investment and Promotion Agency approved a client to apply for investment immigration using ETH worth HK$30 million as asset proof. Previously, in October 2024, another client successfully applied for BTC and was approved, becoming the first case in Hong Kong to apply for investment immigration using cryptocurrency.

Hong Kong investment immigration requires applicants to prove that they hold HK$30 million and make the same amount of investment within six months. Whether conditions can be met by investing in cryptocurrency ETFs or directly cryptocurrency has not been determined. Crypto assets need to be stored in cold wallets or mainstream exchanges such as Binance.

Macro dynamics

Gold prices hit new highs, risk aversion sentiment and central bank purchases push up gold prices

On February 10, COMEX gold futures broke through $2900/oz and hit an all-time high, approaching the $3000 mark. The recent continued rise in gold prices is due to a surge in risk aversion demand, especially Trump's announcement of tariffs on imported steel and aluminum and the increasing uncertainty of global trade and inflation. As a traditional safe-haven asset, gold is supported by strong demand.

The central bank's gold purchase activities also provide support for gold prices. The global central bank purchases amount to 1,045 tons in 2024, especially the People's Bank of China has continuously increased its holdings of gold and announced that insurance funds will be allowed to invest in gold, which is expected to bring about an increase in market funds. In addition, geopolitical risks and global economic uncertainty have also made gold continue to be favored by investors.

As the global economic situation changes, analysts predict that gold prices may continue to rise. In the short term, gold will serve as a tool to combat inflation and trade risks, while in the long term, it will be subject to global anti-globalization trends and dollar credit. The support of risk may drive gold prices to continue to maintain strong growth in 2025.

Weak non-farm data and falling unemployment rate drive the dollar to stop falling and rebound

On February 7, the US Bureau of Labor Statistics released the non-farm employment data for January, with 143,000 new jobs, and the unemployment rate dropped to 4.0%, both far lower than market expectations. The annual growth rate of salary in January was 4.1%, higher than expected 3.8%, while the monthly salary increase unexpectedly reached 0.5%, far exceeding the expected 0.3%. The University of Michigan Consumer Confidence Index shows that consumer confidence has dropped to its lowest point in seven months due to inflation concerns, further exacerbating market uncertainty.

On February 10, the US dollar index fluctuated upward to 108.31, reflecting that market concerns about rising inflation and interest rate hike expectations have risen again. While new jobs performed weakly, strong wage data and a decline in unemployment provided markets with optimistic expectations of the Fed's path to hikes, pushing the dollar to rebound after falling Monday this week.

In the coming week, the United States will release January CPI data and hold a monetary policy hearing by Federal Reserve Chairman Powell, which is expected to be a key factor in affecting BTC's trend.

2025 The stock market faces hidden dangers of high valuation, and crypto market may become a new place for risky assets

Stocks performed strongly in 2025, with the S&P 500 expected to rise 11%, but high valuations and excessive market concentration pose hidden dangers. Although corporate earnings growth and interest rate cuts have boosted market sentiment, current stock market valuations are close to historical highs, especially U.S. stocks and technology stocks. The concentration of the US stock market is unusually high, with the top ten stocks accounting for more than 20% of the global market value, which means that the performance of a single stock may have a significant impact on the overall market.

Risk funds from traditional financial markets are likely to flow into the crypto industry, especially BTC, as a "digital gold" to hedge stock market volatility and inflation. Although the crypto market has been insufficient liquidity due to blood-sucking phenomena in projects such as $TRUMP and $MELANIA in the past, this situation is expected to improve with capital inflows. The increased activity of the crypto market and the increased liquidity will attract more investors to seek opportunities.

Disclaimer: The above content does not constitute investment advice, sale offer or purchase offer invitation to residents of the Hong Kong Special Administrative Region, the United States, Singapore, and other countries or regions where such offer or invitations may be prohibited by law. Digital asset trading can have great risks and instability. Investment decisions should be made after careful consideration of personal circumstances and consulting a financial professional. Matrixport is not responsible for any investment decisions based on the information provided on this content.

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