Surge in ETF Inflows: How Will Market Sentiment Impact Bitcoin Prices? Will it Correct Downwards or Continue to Rise?
Market Overview
This Week’s CPI Data in Focus
Overall CPI
Year-over-Year Increase: Expected to rise from October’s 2.6% to 2.7%.
Month-over-Month Increase: Expected to rise from October’s 0.2% to 0.3%.
Core CPI (excluding food and energy)
Year-over-Year Increase: Expected to remain at 3.3%.
Month-over-Month Increase: Expected to remain at 0.3%.
Analysis of Reasons for Expected Increase
Energy Price Volatility: Recent increases in international oil prices may push up energy-related product prices, impacting the overall CPI increase.
Food Price Changes: Influenced by climate change and supply chain challenges, food prices may see an upward trend, putting upward pressure on the CPI.
Service Price Adjustments: As economic activity resumes, increased demand for services may lead to higher service prices, influencing core CPI trends.
Potential Impact on Monetary Policy
If CPI data exceeds expectations, it may impact the Federal Reserve’s monetary policy in the following ways:
Adjustment of Rate Cut Expectations: Higher-than-expected inflation data may weaken market expectations of imminent Fed rate cuts, as rising inflation might prompt the Fed to maintain or tighten existing policies.
Asset Purchase Plans: Rising inflationary pressures may lead the Fed to reassess the scale and pace of its asset purchase plans to control inflation.
Weekly Financial News and Market Dynamics Review
Record ETF Inflows into Cryptocurrencies: Demand for U.S. exchange-traded funds (ETFs) directly investing in Bitcoin and Ethereum surged, driven by U.S. President-elect Donald Trump’s pledge to ease cryptocurrency industry regulations.
U.S. November Non-Farm Employment Data Exceeds Expectations: November non-farm employment increased by 227,000, surpassing market expectations of 214,000; the unemployment rate slightly rose to 4.2%.
Major U.S. Companies’ Stance on Cryptocurrencies: Microsoft’s shareholders’ meeting votes on whether to invest in Bitcoin. If the proposal passes, it could further boost the Bitcoin market.
U.S. Leaders’ Views on Cryptocurrencies: President-elect Trump supports easing cryptocurrency regulations, which is expected to create a more favorable policy environment for the industry.
Economic Data Analysis and Market Impact
Non-Farm Employment Data: The better-than-expected employment data for November shows labor market resilience, influencing the Fed’s monetary policy decisions by possibly slowing down or delaying rate cuts.
Cryptocurrency ETF Inflows: Driven by policy expectations, record-breaking inflows into cryptocurrency ETFs reflect growing investor confidence in the market.
Market Sentiment and Bitcoin Prices: ETF inflows and positive policy news uplift market sentiment, pushing Bitcoin prices higher. However, market volatility remains a concern.
This Week’s Cryptocurrency Market Overview
Popular Tokens and Trends
Bitcoin (BTC): Currently priced at approximately $98,379, down about 1.49% from the previous trading day.
Ethereum (ETH): Priced at approximately $3,860.83, down about 2.89%.
Litecoin (LTC): Priced at approximately $122.74, down about 7.35%.
Binance Coin (BNB): Priced at approximately $723.13, down about 2.08%.
Cardano (ADA): Priced at approximately $1.11, down about 7.5%.
Ripple (XRP): Priced at approximately $2.4, down about 5.88%.
Dogecoin (DOGE): Priced at approximately $0.431996, down about 5.61%.
Solana (SOL): Priced at approximately $227.16, down about 3.64%.
Polkadot (DOT): Priced at approximately $9.54, down about 8.36%.
Chainlink (LINK): Priced at approximately $24.78, down about 6.53%.
Next Week’s Economic Data and Outlook
U.S. CPI Data (December 12): Expected year-on-year increase of 3.2%. If it exceeds expectations, it could influence the Fed’s monetary policy direction.
ECB Rate Decision (December 14): The market expects rates to remain unchanged, but attention should be paid to the president’s latest economic assessment.
U.S. Retail Sales Data (December 14): Expected to grow by 0.4%. Strong data could reinforce market confidence in economic growth.
Bitcoin Market Analysis This Week (December 4-December 9)
BTC reached a historic high on December 5 but quickly corrected to remove liquidity. It remains within the same consolidation range, awaiting clarity from the December 12 CPI release. Consolidation trading strategies are recommended.
