Weekly Report CFT Thursday, January 30th, 2025
BTC and ETH have had a mixed start to 2025, with BTC up +13% in January and on track to close the month above $105,500, while ETH lags with a month-to-date decline of -7.66%. BTC has been gaining momentum amid expectations of a more favorable regulatory environment under the new U.S. administration. This week, BTC is up +0.7%, trading near $105,700, while ETH is down -1.2%, nearing around $3,250.
U.S. equities started the week with a sharp drop, led by heavy losses in tech stocks after the release of DeepSeek’s lower-cost AI model, which requires significantly less development capital than OpenAI’s $10 billion investment in its most advanced models, R1 and O1. NVIDIA plunged 17% on Monday. However, markets rebounded on Tuesday, buoyed by strong Big Tech earnings and the Fed's decision to keep rates steady, signaling a more measured stance on inflation. By Thursday, the S&P and Nasdaq closed near 6,081 and 19,691, respectively, as investors digested a weaker-than-expected Q4 GDP print (+2.3% vs. +2.6% forecast), with the VIX hovering around 15.8.
U.S. Treasury yields tumbled to their lowest levels this year as investors rushed to safe-haven bonds amid a sharp tech selloff. The 2-year and 10-year yields fell to 4.17% and 4.49%, respectively, reflecting heightened risk aversion. A weaker-than-expected Q4 GDP print (2.3% vs. 2.5% forecast) added to concerns over slowing economic momentum. Investors remain cautious following the Fed’s policy decision and its cautious stance on inflation, while uncertainty lingers ahead of Trump’s looming tariff deadline. Markets now price in a 47% chance of a 25bps rate cut by June 2025.
DXY remains under scrutiny after US GDP missed expectations, with FX markets focused on upcoming US trade policy updates ahead of the Feb. 1 tariff deadline. The index struggles to reclaim the 108.00 level, with resistance at 109.30 and 110.20. Support holds at 107 though further downside could be tested. Traders also eye the potential Fed influence of Trump, which adds uncertainty to the outlook.
Oil prices remain under pressure, with WTI trading near $73, below its 200-day MA at $75. Bearish sentiment persists amid oversupply concerns from a potential US-OPEC+ supply war, weaker demand following recent US winter storms, and rising crude stockpiles (+3.46M barrels for the week). Traders are closely watching OPEC+’s February 3 policy meeting and looming US tariffs on Canada and Mexico.
Stocks and cryptocurrencies showed a strong recovery this past few days as things quieted down with markets now looking forward to the remainder of this week with the release of the December PCE price index as well as earnings from ExxonMobil, and Chevron among others.
Client Update: Recent Trades & Market Outlook
Recent Actions
Over the course of January, we took profits on all our trades, realizing a total portfolio gain of +5% for the month so far. This week, we opened long positions on select altcoins, including ARB, OP, TON, and AVAX, when BTC retraced to $97,700 on perpetual futures. Additionally, we recently opened a short position on SUI, bringing our overall market exposure to approximately 10%.
Market Strategy
We are closely monitoring the $105,000 pivot level, as a daily close above that trendline could trigger a push toward $108,000. On the downside, we are now considering $90,000, $80,000, and $75,000 as key levels where BTC could find major support, presenting opportunities to build larger long positions. For now, our strategy remains focused on swing trades with limited exposure, while preparing for more aggressive allocations if BTC approaches these levels in the coming weeks or months.
Market Outlook
BTC may face a more prolonged correction than initially anticipated, as we expect a mid-term bear cycle through 2025 rather than a short-term pullback. Broader market conditions- particularly a potential extended correction in equities and a persistently high interest rate environment-could continue to weigh on BTC and other risk assets. Additionally, recent challenges brought by DeepSeek may disrupt institutional allocation strategies across tech, energy, and cryptocurrency sectors. Given these factors, we remain cautious in the near term while positioning for strategic re-entries at key support levels.
BTC
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ETH
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Other markets
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DXY
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US Treasuries
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