Bitcoin started the new week with a record-breaking performance, reaching $110,000 before retracing back to $102,000. This pullback, while notable, is seen as a typical display of volatility, yet the long-term upward trend remains intact. Particularly, the simultaneous rise of Nasdaq and S&P 500 alongside Bitcoin indicates that the current trend is solid and continues to be supported by broader market movements.
#BTCBreaksATH Trump’s Meme Coin and Crypto’s Positive Divergence
A significant event in the crypto space this week is the release of a meme coin by Donald Trump, which has further boosted Bitcoin and other cryptocurrencies. Trump’s attention towards the crypto space is fueling growing interest, particularly in meme coins. This development is driving a positive divergence for the crypto market, with Bitcoin and other cryptos gaining traction in contrast to traditional financial markets. Trump’s move has increased investor confidence in the crypto space, leading to greater market activity.
#TrumpMarketWatch Whale Activity Surge and Positive Impact
The recent pullback of Bitcoin below $90,000 helped clear out accumulated liquidations, which in turn sparked a surge in whale activity. As I mentioned previously, whale activity surged to 17, and this quickly led to a 10% increase in Bitcoin’s value. As of now, whale activity has risen to 21, indicating that major investors are increasing their positions in Bitcoin, signaling a more bullish outlook for the asset.
$BTC Spot ETF Inflows and Continued Growth
In the past week, spot ETFs saw over $2 billion in inflows. This substantial investment is a strong indicator of growing institutional interest in Bitcoin and the broader crypto market. Ongoing ETF inflows signal that confidence in the crypto space remains strong, and with Trump’s focus shifting to crypto, it is likely that these inflows will continue in the coming week.
Funding Rates and Liquidation Situation
Funding rates are generally at normal levels, which suggests that the market is functioning in a healthy manner without significant liquidation events. Short liquidations are being cleared out, while long positions remain relatively low. This indicates that most crypto traders are adopting a cautious approach, protecting themselves from potential market fluctuations.
Technical Indicators and Avoiding FOMO
Technical indicators remain positive overall. Bitcoin’s strong defense of the $100,000 level indicates that the market is poised to continue its upward trajectory in the long term. However, it is crucial for investors to avoid FOMO (Fear of Missing Out) and refrain from opening high-leverage and risky positions. While the market may experience occasional dips, the underlying trend remains bullish, and investing based on a solid strategy will yield better long-term results.
The Fed Meeting and Market Expectations
The upcoming Federal Reserve (Fed) meeting on January 29 is expected to influence market movements. The Fed’s decisions on interest rates and economic reports will play a significant role in determining the future direction of the market. Given the current data, however, the outlook remains positive, and it is anticipated that the market will quickly recover from any short-term dips and continue to reach new highs.
Conclusion: Cautious Investment and Avoiding High-Leverage Trades
Investors need to exercise caution during this period. To avoid being caught in sudden market dips, it is essential to stay away from high-leverage trades. By considering the current positive data and whale activity, investors can adopt safer and more strategic positions in the market.
Despite its high volatility, the crypto market presents opportunities for significant gains when approached with the right strategy. With the upcoming Fed meeting and Trump’s crypto-focused developments, investors have a good chance of capitalizing on these trends in the first quarter of 2025.
Wishing everyone a profitable week ahead.