As the US market opening loomed, Bitcoin was trading above $92,500. Traditionally, declines in Bitcoin prices have often followed within 1-2 hours after the US markets begin their sessions. Whether this pattern repeats is a question to be observed. With key economic factors at play this week and the next, understanding their implications becomes crucial.
US Markets Dynamics
Following the ousting of Venezuela’s President Nicolas Maduro, geopolitical risks have surged, causing gold and the US dollar to rise. The stock market maintains a steady risk appetite, with spot gold holding at $4,410, marking a 2% increase. Silver’s new year gain stands at 3%, and the dollar index sees its largest rise in two weeks, potentially indicating a rally due to its prolonged weakness.
Technology stocks are performing well, with Nasdaq 100 futures up by 0.7%. Semiconductor producers like Micron and Intel have climbed 3% ahead of market opening, with S&P 500 futures also rising by 0.3%. This positive atmosphere bodes well for cryptocurrencies. President Trump recently stated the US has collected over $600 billion in tariffs and intends to continue this course ahead of a Supreme Court decision. The White House anticipates a ruling by the end of January.
Brent crude oil prices are fluctuating as investors assess developments in Caracas, while Chevron’s value increased by 7% following Trump’s announcement of US-led plans to rejuvenate Venezuela’s energy sector.
Expectations for Cryptocurrencies
At 11:30 PM today, President Trump will attend a policy meeting. No major data releases are expected throughout the day, yet this week remains pivotal. Data released last month, impacted by government shutdown, favored cryptocurrencies but did not spark significant price increases. This week marks the release of comprehensive employment reports following the shutdown, crucial ahead of January’s interest rate decision.
Next week will focus on inflation reports. Should employment data disappoint this week and inflation decrease next week, cryptocurrencies might experience a surge due to exhausted long-standing sell-offs.
The MSCI decision, impacting all cryptocurrency reserve companies, is anticipated by January 15. Despite uncertainties being largely priced in December, further market negativity is expected if companies must liquidate crypto holdings following a delisting decision. The Supreme Court’s ruling on tariffs is due this month, with potential revocation rendering previous market negotiations, declines, and surges pointless. Although the White House claims a contingency plan is in place, market uncertainty led to significant drops in December. High volatility is expected in January.
Notably, Trump and Elon Musk reconciled during a dinner meeting, suggesting less likelihood of conflicts continuing ahead of midterm elections.
Bitcoin has recovered from a bearish flag breakdown, yet those targeting $56,000 require closures above $93,500 to avoid disappointment.
