Jessy, Golden Finance

At around 22:00 on January 13, Beijing time, Bitcoin fell below 90,000. According to OKX exchange market data, the lowest point was $89,111. According to Coinglass data, as of 10 a.m. on January 14, the liquidation volume of the entire network in the past 24 hours was US$803 million, of which US$581 million was liquidated for long orders and US$221 million was liquidated for short orders. As of press time, Bitcoin has rebounded to exceed $97,000.

From January 7 to January 13, the market trend was mainly negative, with Bitcoin falling from US$102,000 to around US$89,000, a drop of about 12%. Even worse are the altcoins, especially some newly launched altcoins, while the likes of Swarms and Usual have fallen by 2/3 from their recent highs.

While the currency circle plummeted, the performance of U.S. stocks was also unsatisfactory. On the evening of January 13, Beijing time, the three major U.S. stock indexes collectively opened lower.

Macro data for the last month of 2024 have also been disclosed in recent days, and January is also the last month of Biden’s term. The United States is facing a transfer of power between the old and the new. Therefore, the financial market is generally stable at this time. It will be relatively turbulent.

When Trump takes office on January 20, will the crypto market stabilize and rise?

The Federal Reserve's interest rate cut may be less than expected, causing Bitcoin to fall for a week in a row

Recently, the core factors affecting the continuous decline of the encryption market are It is the release of relevant macroeconomic data in the United States in December 2024.

In terms of employment data, it was first announced on January 7 that there were 8.098 million JOLTs job vacancies in the United States in November, which was higher than the expected 7.7 million people. After this news was announced, Bitcoin began to After reaching $100,000 again, it started to fall.

In the following days, more relevant employment data was released, such as the ADP (ADP report counts private sector employment) employment numbers of 122,000 in December, lower than the expected 140,000 people, the previous value was 146,000, the lowest level since August 2024. Nonfarm payrolls rose by 256,000 in December 2024, well above expectations for a gain of 160,000 and up from 212,000 in November. The U.S. unemployment rate fell slightly to 4.1% in December from 4.2% in November, which was 0.1 percentage point lower than expected. On the other hand, non-farm labor wage growth was slightly lower than expected in December. Average hourly earnings for the month increased 0.3% month-on-month, in line with expectations, and increased 3.9% year-over-year, a slightly lower-than-expected increase.

Taken together, some of the above employment data show that the employment situation in the United States is relatively improving, which also indicates that the economy is improving, which makes the market expect the Federal Reserve to cut interest rates this year. expectationsReduced again.

The CPI data for December 2024 will be announced on the evening of January 15. The market currently predicts that the month-on-month CPI growth rate in December will remain at 0.3%, and the year-on-year growth rate will increase from the previous value of 2.7%. to 2.9%, the highest level in five months. Year-on-year growth in core CPI inflation, which excludes volatile factors such as energy and food, is expected to remain at 3.3%, with month-on-month growth slowing to 0.2%.

If the CPI continues to rebound slightly as expected, it will make the Federal Reserve more cautious in cutting interest rates.

The sharp decline and continuous negative decline in the crypto market on the 13th are based on a reaction to the current macroeconomic situation in the United States.

Moreover, U.S. bond yields are also rising. The benchmark 10-year U.S. Treasury bond yield closed at 4.772% last Friday, the highest level since November 2023. This has also caused many investors to sell high-risk assets and turn to the relatively safe bond market.

The U.S. dollar index continues to rise, reaching 110. The strength of the U.S. dollar is often seen as a signal of the relative strength of the U.S. economy, and may also imply certain uncertainties in the global economy. In this case, investors' risk appetite will generally decrease. At the same time, the strength of the U.S. dollar has made U.S. dollar assets more attractive. In pursuit of higher returns and asset security, investors will transfer funds from risky assets such as cryptocurrencies to U.S. dollar assets.

Therefore, the release of the above macro data has led to the market’s judgment that the Fed’s next interest rate cut will be less than expected. This is the root of market panic, and high risk aversion makes people sell Export crypto assets.

But on the other hand, in the face of the handover between the old and the new, it is normal for the financial market to experience large fluctuations.

January 2025 will be Biden’s last month in office. In such a context, how reliable is the economic data released by him?

After the rapid decline on the 13th, the market also rebounded quickly. As of press time, Bitcoin has rebounded to more than $97,000.

In the short term, the market will look at related encryption after Trump came to power, and in the long term, we will still look at the macroeconomics

At present, with Trump coming to power, the industry generally believes that his official inauguration will It will excite the encryption market, especially if he makes encryption-related remarks on the day of his inauguration, which will greatly stimulate the encryption market sentiment. Because Trump has promised to make the United States the global cryptocurrency capital and supports the establishment of a strategic Bitcoin reserve, among other things.

According to the "Washington Post" report, David Sacks and the Trump transition team are working closely with encryption industry leaders to develop legislative strategies. Trump is expected to sign an executive order on his first day in office, which may involve “De-banking” and abolishing controversial crypto accounting that requires banks to include digital asset holdings on their own balance sheets.

As Trump saidThe promised step-by-step implementation will undoubtedly boost market confidence and allow funds to flow into the encryption market.

There are also views that if some of the promises made by Trump during the previous campaign are unable to be fully implemented due to practical reasons, or even if cryptocurrency is not mentioned on the day of inauguration, this will be a blow. Investor confidence has led to a short-term decline in cryptocurrency prices.

But overall, Trump has always been crypto-friendly, and the virtual currency-related statements he released during his term are definitely relatively friendly, which is generally beneficial to the development of the crypto industry.

Another factor that will affect the cryptocurrency market is undoubtedly macroeconomic factors, which are also the most uncertain factors at present. After Trump took office, the related economic policies he launched may also make the global economy more uncertain.

When Trump was running, he advocated bringing manufacturing back to the United States, and in order to achieve this goal, a weaker dollar was needed. In this way, the price of commodities priced in US dollars will be relatively reduced, thereby enhancing the competitiveness of export commodities and increasing export volume. A weaker dollar will make cryptoassets more attractive as an alternative asset.

On the other hand, Trump is also likely to promote trade protectionism and impose tariffs on imported goods to protect American industries. This trade protection tendency may trigger trade frictions, which will make the world The economic and trade order faces great uncertainty, and the unstable global and economic situation will be negative for cryptocurrency.

On the other hand, according to the recently released macroeconomic data in the United States, many institutions have lowered their forecasts for further interest rate cuts in the United States. But what will be the actual rate cut in the United States in 2025? There is also great uncertainty.

The first is the fulfillment of Trump’s own promises during the campaign such as tax cuts and lower lending rates, as well as some trade protection measures and immigration adjustments, which will most likely require interest rate cuts to be realized. But on the other hand, with the introduction of Trump's plan, he is actually trying to find ways to promote the development of the U.S. economy, which has also brought about a further rise in inflation. In order to control inflation, the Federal Reserve may choose to keep interest rates unchanged. interest rates may change or even increase.

However, in order to control inflation, the Federal Reserve may keep interest rates unchanged or even raise them. This is a matter for later. Within a month or two, what is more certain is that after Trump takes office, he will vigorously stimulate the United States. Economic development requires loose money.

If Trump fulfills his promises to the crypto market when he takes office, I will be optimistic about the crypto market at least within a month after Trump takes office.