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Following Bitcoin's bullish price action over the past week and its reclaiming of bullish momentum and structure, we’ve now seen a 5% pullback, bringing Bitcoin back below $100k. Yesterday, I mentioned that the prolonged Bitcoin correction was finished. While last night's price action raises some doubts, Bitcoin still maintains its bullish structure from a technical perspective. However, recent U.S. economic data is beginning to put this structure under pressure.
Overnight market dynamics reflected a strong shift in investor sentiment as U.S. economic data surprised to the upside, driving risk-off behavior. The Job Openings and Labor Turnover Survey (JOLTS) showed job openings in November rising to 8.1 million, surpassing expectations and signaling a resilient labor market. Meanwhile, the ISM Services Index indicated robust growth in December, with the non-manufacturing PMI climbing to 54.1 from 52.1 in November. This data suggests the U.S. economy remains stronger than anticipated, raising the possibility that the Federal Reserve could slow the pace of rate cuts in 2025.
This backdrop drove a rally in U.S. bonds, with the 10-year Treasury yield climbing to 4.69%, its highest since April 2024. The U.S. dollar also strengthened, reaching a six-month high against major currencies, as investors sought safe-haven assets. The rising yields and stronger dollar reduced the appeal of riskier investments like equities and Bitcoin.
The upcoming FOMC minutes, set to release tomorrow, will shed more light on the Fed’s policy outlook, particularly in light of this strong economic data. At the last FOMC press conference, Jerome Powell struck a more hawkish tone than expected, suggesting fewer rate cuts in 2025. If the minutes echo Powell’s stance and reinforce the strength of the U.S. economy, risk assets like Bitcoin could face additional headwinds. However, any indication of dovish flexibility could provide relief to markets hoping for monetary easing later this year.
Stormrake Spotlight: Hyperliquid (HYPE) ($23.50)
Stormrake Spotlight: Hyperliquid (HYPE) ($23.50)
HYPE followed the broader market in its overnight pullback, dropping 7% and approaching a key support level at $22. This level has historically offered solid support, making it an attractive area to consider dollar-cost averaging (DCA) into your HYPE position.
BTC/USD Key Levels and Price Action:
BTC/USD Key Levels and Price Action:
Bitcoin has erased all its gains from the past week, losing its bullish momentum and falling below the critical $100k level. Currently trading at $97k, BTC is attempting to hold onto the 200 SMA and the middle CPR level. Should Bitcoin stabilise at this level, we could see a potential low being set. If it fails, a retest of the $95.7k key level is likely.
BTC Total ETF Flows for 7 Jan: $ - 457.4 million
(ETF flow data is sourced from https://farside.co.uk/btc/ and reflects figures at the time of writing.)
ETH/USD Key Levels and Price Action:
ETH/USD Key Levels and Price Action:
Ethereum has followed Bitcoin and the broader market, falling 8.3% overnight. It has broken below all major moving averages and lost the $3,557 support level, which previously anchored its bullish momentum. ETH now trades at $3,370, a key level that has acted as a magnet over the past two weeks. However, this level has now flipped into resistance, making it crucial to watch for further downside risk.
ETH Total ETF Flows for 7 Jan: $ -19.2 million
(ETF flow data is sourced from https://farside.co.uk/eth/ and reflects figures at the time of writing.)
*All prices are denominated in USD unless stated otherwise*
Written by Alexandar Artis
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