Crypto Market Pulse - January 20, 2025

LAST WEEK RECAP:

• U.S. CPI rose 0.4% MoM in Dec v.s. 0.3% est. Annual rate was 2.9% v.s. 2.9% est.
• U.S. Core CPI rose 0.2% MoM in Dec v.s 0.3% est. Annual rate was 3.2% v.s. 3.3% est.
• U.S. PPI rose 0.2% MoM in Dec v.s 0.4% est. Annual rate was 3.3%.
• U.S. Core PPI rose 0.1% MoM in Dec v.s. 0.3% est. Annual rate was 3.3%.
• Trump plans to designate crypto as a national priority.
• Tether plans to move its headquarters to El Salvador.
• SEC officially files appeal in Ripple $XRP lawsuit, Ripple's Chief Legal Officer says the SEC's lawsuit is "likely to be abandoned by the next administration."
• Microstrategy bought another 2,530 BTC with an average of $95,972. So far MicroStrategy holds a total of 450,000 Bitcoins, with an average cost of $62,691.
• Coinbase resumes Bitcoin loan services for US users.
• Phantom wallet raises $150 million at $3 billion valuation.
• Trump officially launches the $TRUMP crypto meme coin on Solana.

LEGACY MARKETS – DXY

DXY has remained elevated compared to last week, showing no significant trend changes. It will continue to exert pressure on risk assets.

LEGACY MARKETS – VIX

VIX has not shown any significant changes compared to last week either. It has remained relatively stable, reflecting a continued sense of uncertainty in the market without any sharp shifts in sentiment after the CPI data

BTC WEEKLY VIEW

BTC has found strong support around the 90K level and rebounded strongly, which aligns with our expectations from last week. This rebound could potentially lead to another all-time high.

ETH WEEKLY VIEW

ETH, on the other hand, has been more subdued. It hasn't followed the upward momentum seen in BTC. It remains trading below the moving averages, which suggests that the overall trend hasn't shifted. Until it breaks above those key moving averages, the bearish bias may persist, and it could continue to struggle to regain momentum.

ETH/BTC

Last week, ETH continues to show weaker price action compared to BTC. But the volume picked up on Sunday after breaking the previous low. A stronger catalyst would likely be needed for ETH to break out of its current range.

TOTAL3 USD MARKET STRENGTH

TOTAL3 experienced a strong push toward the previous high but quickly reversed from the supply zone, with volume increasing. The rise in volume during the decline suggests increased selling pressure, which typically points to a potential consolidation or further downside. Overall, this price action is not a positive sign, as it shows the market is struggling to maintain upward momentum.

TOTAL3 BTC MARKET STRENGTH

TOTAL3/BTC is still consolidating at this price level, This range-bound price action suggests that there is a lack of strong directional movement, and market participants are waiting for a clear catalyst or break from current levels. Given the broader bearish pressure on Total 3, especially in the context of the weak performance of altcoins relative to BTC, it's likely that the pair will continue to struggle at these levels unless a significant shift occurs in market sentiment or volume. If the consolidation persists, a breakout or breakdown could come once more definitive momentum emerges.

SUMMARY

• The crypto market faced high volatility last week, influenced by macroeconomic factors, including surging U.S. Treasury yields and inflation concerns.
• Bitcoin tested December lows around $89-90K but rebounded strongly, regaining the critical $100K level as inflation fears eased after a lower-than-expected PPI and Core CPI.
• Market attention has shifted to Trump’s inauguration, with expectations of potential crypto-friendly policies, such as designating crypto as a "national priority."
• Altcoins remain under pressure, with liquidity concentrated in a few sectors, and the $TRUMP meme coin draining liquidity from other altcoins over the weekend.
• A potential Trump inauguration rally could provide an opportunity for investors to take profits, though inflation concerns, tariffs, and an uncertain Fed rate cut trajectory could continue to weigh on risk assets.
  

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