Crypto Market Pulse - February 3, 2025

LAST WEEK RECAP:

• DeepSeek sparks AI stock selloff and Nvidia posts record market-cap loss.
• Federal Reserve pauses interest rate hikes, remains at 4.25% - 4.50%.
• U.S. PCE increased 0.3% MoM and 2.6% YoY in Dec, same as estimates.
• U.S. core PCE increased 0.2% MoM and 2.8% YoY in Dec, same as estimates.
• European Central Bank (ECB) cut its deposit rate from 3% to 2.75% as expected.
• U.S. GDP grew at a 2.3% pace in the 4th quarter, less than 2.5% expected.
• Tesla reveals none of their Bitcoin was sold in Q4 2024.
• President Trump officially announces 25% tariffs on Canada and Mexico, and 10% tariffs on China.
• Microstrategy bought another 10,107 BTC with an average of $105,596. So far MicroStrategy holds a total of 471,107 Bitcoins, with an average cost of $64,511.
• Uniswap Labs has officially released Uniswap v4.

LEGACY MARKETS – DXY

Amid the influence of macroeconomic news, the DXY has rebounded swiftly from the bottom of the previous supply zone, approaching its previous high. Risk assets are once again under pressure, and after this pullback, it is highly likely to break through the previous high.

BTC WEEKLY VIEW

This week's BTC movement has largely aligned with our expectations from last week. The previous high turned out to be a false breakout to the upside, followed by another retest of the supply zone. The trading volume during this retracement was notably low, which is why BTC's price continues to oscillate within this range. If the demand zone around 90k fails to hold, we might see a downward correction.

ETH WEEKLY VIEW

ETH's performance has also matched our expectations from last week. After being consistently suppressed by the trendline, it experienced a significant pullback and has now returned to the previously recognized support level. In the short term, it is likely that we will continue to see adjustments within this range.

ETH/BTC

The trend of ETH/BTC can be seen through the depth of its correction—ETH remains very weak, but it is also completes its corrections in one move. We really hope to see it form a bottom at this low level.

TOTAL3 USD MARKET STRENGTH

After last week's reversal, a wave of downside follow-through occurred. There is still plenty of support below, and we expect a period of sideways consolidation in the short term.

TOTAL3 BTC MARKET STRENGTH

We hope this sharp drop is a false breakdown to the downside and can bring a strong rebound in the short term. However, a bottom still needs to be formed to reverse the trend.

SUMMARY

• BTC dropped below $100K on Monday due to a broader risk-off sentiment sparked by developments in the AI sector. Concerns over AI stock valuations, particularly after DeepSeek's breakthrough, triggered a selloff in Nvidia and spilled over into crypto markets.
• ETH/BTC remains weak, reflecting overall hesitation in risk assets. While ETH has completed a sharp correction, it still needs to establish a solid bottom before any trend reversal can occur.
• Altcoins followed the broader downturn, with liquidity tightening amid risk-off sentiment. However, if macro conditions stabilize and pro-crypto policies emerge, altcoins could benefit from renewed speculative interest.
• The FOMC left rates unchanged, with the first projected rate cut pushed to June, adding uncertainty to financial markets. Persistent inflation risks and Trump’s proposed tariffs further cloud the macro outlook, affecting risk assets, including crypto.
  

DISCLAIMER:

The information in this report is for information purposes only and is not to be construed as investment or financial advice. All information contained herein is not a solicitation or recommendation to buy or sell digital assets or other financial products.

This post was prepared by Kairon Labs Trader Patrick Li and Travis Su.

Edited by: Marianne Dasal