EMC Labs BTC Weekly Observation (02.10~02.16): "Russia-Ukraine Peace Talks" have made progress, low volatility BTC will decide the direction

BTC opened at $96,481.47 and closed at $96,119.88 this week, down 0.37%, with low volatility (5%) and significantly reduced trading volume, remaining within the "Trump bottom" range (89,000-110,000 USD).
Key macro events (US CPI release, reciprocal tariffs, Powell's testimony) had muted market impact due to preemptive reactions.
Progress in Russia-Ukraine peace talks boosted optimism: USD index fell 1.22%, Treasury yields dropped, and US stocks neared record highs.
January CPI exceeded expectations (3% YoY, 0.5% MoM), reducing 2024 rate-cut expectations to possibly one cut in December.
Selling pressure declined sharply (1,371.78M coins sold), with long-term holders increasing holdings by 8,000 coins.
Stablecoins saw $362M inflows, but BTC/ETH Spot ETFs had outflows ($584M and $29M respectively), weakening BTC performance vs. US stocks.
EMC BTC Cycle Metrics indicator (0.75) signals the market remains in an upward phase.

The information, opinions and judgments on markets, projects, currencies, etc. mentioned in this report are for reference only and do not constitute any investment advice.

Written by 0xWeilan

This week, BTC opened at $96,481.47 and closed at $96,119.88, down 0.37% for the week, with the fluctuation narrowed to 5% and the trading volume shrunk significantly. The BTC price remains within the "Trump bottom" (89,000-110,000 USD box).

Due to advance reactions, several major events on this week’s schedule, such as the release of the US CPI in January, the imposition of reciprocal tariffs by the US, and Powell’s semi-annual monetary policy report to Congress, did not have a drastic impact on the US stock market and the BTC encryption market.

As the United States pushes the "Russia-Ukraine War" toward peace talks, market sentiment seems to be leaning toward optimism. The U.S. dollar index has fallen sharply, U.S. bond yields have continued to decline, and the U.S. stock index has once again approached a record high. The impact of the negative shock in Trump's deal seems to be dissipating, but the market needs further confirmation.

BTC is still running within the "Trump bottom" (89,000-110,000 US dollars). The price fell below the second rising trend line and fluctuated narrowly around 97,000. It is expected to make a direction choice soon.

Macro-financial and economic data

The CPI for January released by the United States this week exceeded expectations across the board, with a year-on-year increase of 3% and a month-on-month increase of 0.5%, higher than the market expectations of 2.9% and 0.3%. The core CPI rose 3.3% year-on-year, higher than the expected 3.1%.

The data showed that the economy was still strong and inflation had rebounded to some extent. This data further lowered the expectation of interest rate cuts this year, and the market is currently inclined to only cut interest rates once, around December.

Powell mentioned in his semi-annual monetary policy testimony to Congress that if the economy continues to grow and inflation fails to quickly fall back to the 2% target level, the Fed may maintain its current policy for a while. On the contrary, if the labor market is unexpectedly weak or inflation falls more than expected, the Fed may continue to moderately ease monetary policy.

Similar statements have been made many times and are nothing new. However, considering that the Trump administration has reached a tacit understanding with the Federal Reserve, this statement can be regarded as tacitly accepted by the US government, so it is almost impossible to cut interest rates when the economy is booming.

In addition, after the dramatic changes in the "Canada-Mexico tariffs", the impact of Trump's tariff policy on the market has become smaller and smaller. This week, Trump announced that he would implement "reciprocal tariffs" on all countries, but did not specify the start time, so it did not have a real impact on the market.

What may have a greater impact on the market is that the "Russia-Ukraine conflict" seems to be about to make significant progress. Trump is pushing for dialogue and negotiations between the two sides, and news reports also reveal the conditions of both sides. At the Munich Security Conference, Trump emphasized that the conflict must end.

As an important event affecting the world economy, the "Russia-Ukraine conflict" will undoubtedly bring a large positive variable to the global economy and financial markets if it can be ended. Affected by this, the US dollar index fell 1.22% to 106.813, the 10-year Treasury yield fell to 4.48%, and the three major US stock indexes all recorded weekly gains, with Nasdaq +2.58%, S&P 500 +1.47%, and Dow Jones +0.55%. London gold rose 0.75, hitting a new high of $2,942.60 per ounce during the session.

The suppression of market bullish confidence caused by Trump's tariffs and the Federal Reserve's downward adjustment of interest rate expectations seems to be dissipating. Of course, a clearer direction needs to wait for further confirmation from the market.

Selling pressure and selling

In terms of selling pressure, long and short hands sold a total of 1371.78 million coins, a significant decrease from last week. The trading volume of the exchange also shrank significantly during the same period, indicating that short-term panic selling has significantly declined. At present, the average profit level of short hands has dropped to 6%, so there is no need to stop profit or stop loss.

Long-term holders stopped selling this week and their holdings increased by 8,000 coins.

Stablecoins and BTC Spot ETF

Stablecoins and BTC Spot ETF and ETH Spot ETF channels saw a total outflow of US$252 million throughout the week, of which stablecoins saw an inflow of US$362 million, while BTC Spot ETF and ETH Spot ETF saw outflows of US$584 million and US$29 million respectively.

The outflow of funds from the ETF market was the main reason why BTC performed weaker than the U.S. stock market last week.