Weekly BTC Market Analysis: Directional Choices Under Low Fluctuation

This week, the price of Bitcoin fluctuated within a narrow range, opening at 96481.47 USD and closing at 96119.88 USD, with a slight decrease of 0.37% for the week. The fluctuation further narrowed to 5%, and trading volume significantly shrank, with the price still operating within the range of 89000 to 110000 USD.

Despite important events such as the U.S. January CPI data, adjustments in tariff policies, and statements on the Federal Reserve's monetary policy occurring successively, their impact on the cryptocurrency market has not been significant. These factors seem to have already been digested by the market earlier.

It is worth noting that as the Russia-Ukraine conflict may move towards negotiations, market sentiment has shown signs of warming. The US dollar index has fallen sharply, US bond yields continue to decline, and US stock indices are approaching historical highs. These signs indicate that previous negative factors may be dissipating, but the market still needs to further confirm this trend.

Bitcoin is currently fluctuating in a narrow range around $97,000, having fallen below the second upward trend line. It is expected to face a critical moment of directional choice in the short term.

In terms of macroeconomics, the CPI data for January has exceeded expectations across the board, indicating that the economy remains strong and inflation has rebounded. This may lead to a further reduction in market expectations for interest rate cuts this year, with current sentiment leaning towards the possibility of only one rate cut around December.

The Federal Reserve Chairman stated in a congressional testimony 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 while. This position is largely consistent with previous statements, but given the current tacit understanding between the government and the Federal Reserve, the likelihood of interest rate cuts seems low in the case of a strong economy.

The potential reconciliation of the Russia-Ukraine conflict has become an important factor affecting the market this week. If the conflict comes to an end, it will bring significant positive impacts to the global economy and financial markets. As a result, the dollar index fell by 1.22% to 106.813, the yield on 10-year Treasury bonds dropped to 4.48%, and all three major U.S. stock indexes recorded gains.

In terms of market selling pressure, short-term and long-term holders sold a total of 137,178 BTC this week, a significant decrease compared to last week. The trading volume on exchanges has also shrunk, indicating that short-term panic selling has significantly weakened. Currently, the average profit level for short-term holders has dropped to 6%, with little motivation for either taking profits or cutting losses. Long-term holders paused their selling this week, increasing their holdings by 8,000.

In terms of capital flows, the stablecoin and Bitcoin spot ETF channels experienced a net outflow of $252 million throughout the week. Among them, stablecoins inflowed $362 million, while Bitcoin spot ETFs outflowed $584 million, and Ethereum spot ETFs outflowed $29 million. The outflow of funds from the ETF market is the main reason for Bitcoin's weaker performance compared to U.S. stocks.

According to relevant indicators, the current market is in an upward cycle, with an index value of 0.75.

Overall, the Bitcoin market is at a critical moment under low fluctuation, and the future trend will depend on the combined effects of multiple factors such as the global economic situation, geopolitical developments, and the flow of institutional funds.