Bitcoin followed the rebound in U.S. stocks, showing short-term optimism and increased trading volume. However, it clearly reversed after encountering resistance at the 4-hour level; it’s still too early to confirm a full-fledged strong phase at the hourly level, so caution is advised! First, wait for a clear breakout and sustained hold above the key resistance near $70,500—otherwise, avoid excessive optimism. If the decline hasn’t been accompanied by increased volume, the rebound is likely to lose momentum quickly, so proceed with caution on this short-term rally! https://t.co/RNjc2DJpAP

Financial markets are now pricing in weekend geopolitical tensions, with gold and crude oil prices rising sharply, the U.S. dollar index climbing, and increased demand for safe-haven assets. The surge in crude oil prices has fueled concerns about future inflation, pushing long-term bond yields significantly higher and increasing demand for duration-linked assets as investors worry about inflation, global economic prospects, and government fiscal risks. The U.S. stock market’s risk index (SPHB/SPHQ) has declined, reflecting reduced risk appetite, with tech stocks collectively falling in pre-market trading. Geopolitical tensions have triggered selling in risk assets, causing a short-term flight of liquidity toward safe-haven assets. The pre-market decline in U.S. stocks has not further dragged down #Bitcoin, as Bitcoin had already priced in the geopolitical tensions over the weekend. Today’s volatility will depend on U.S. stock market activity after its opening. If U.S. equities continue to fall sharply, BTC may follow suit.

The greatest risk to risk assets right now is not today, but after 6 a.m. Monday, when global financial markets open and gold and crude oil will reprice in response to current geopolitical sentiment. To date, international institutional investors have priced crude oil at $80 per barrel, and gold prices are also expected to rise. In this phase of relatively tight liquidity, capital flows toward whichever asset offers the more compelling narrative. For #Bitcoin, the biggest threat is that liquidity shifts entirely toward safe-haven assets or crude oil. All short-term risk assets must navigate a period of liquidity scarcity. For crypto investors, it’s best to wait until Monday’s asset repricing before making decisions—whether the downtrend stabilizes or a second test succeeds will require time to verify.

Bitcoin has formed a bottoming pin bar on the hourly chart, accompanied by a strong rebound—does this signal a halt in the decline? Has the second test of the bottom been completed? Currently, bottoming pin bars have appeared on both the 1-hour and 4-hour charts. On the 1-hour chart, the second and third candles show strong rebound momentum, while the second candle on the 4-hour chart also exhibits a solid rebound. Now, we need to observe whether the third candle on the 4-hour chart continues this strong rebound. If the third candle on the 4-hour chart also shows a robust upward trend, then short-term, the hourly chart may indeed be signaling a bottom. However, confirmation on the daily chart will require observation over the coming days. On the daily chart, only a pin bar has formed so far; we must monitor whether the second and third candles sustain a continuous rebound. For this rebound to be valid, the low of the second and third candles must not fall below $65,000. Additionally, note that trading volume has not surged significantly. This suggests that short-term selling pressure may not yet be fully exhausted, and there has been no substantial activation of new buying interest—meaning the rebound could easily lose momentum. Although the hourly chart shows a pin bar with increased volume, the rebound is now occurring on decreasing volume. As price rises but volume contracts, this indicates rapidly weakening momentum. Therefore, we cannot yet be 100% certain that the decline has stopped, nor can we confirm that the second test of the bottom is complete. The biggest noise at this stage is the rebound in U.S. equities driving Bitcoin’s price. We must wait until U.S. markets close to observe Bitcoin’s subsequent behavior. Only if Bitcoin maintains upward momentum during tomorrow’s Asian session can we more confidently confirm signals of a bottom and completion of the second test. Key short-term resistance levels to watch: around $66,300; one of this week’s critical resistance zones is near $67,800.

February 16 – February 20 Macro Highlights: Inflation and GDP—Can They Continue to Fuel Rate Cut Expectations? The second round of U.S.-Iran negotiations is a potential risk point! China’s market holiday may further reduce liquidity during Asian trading hours! This past Monday coincided with Chinese New Year’s Eve and U.S. Presidents’ Day, resulting in thin trading volumes and low liquidity across Asia and the U.S. Key macro events this week are concentrated from Tuesday onward and on Friday. 1. On Tuesday, the U.S. and Iran meet in Switzerland for their second round of negotiations. Ahead of the talks, both sides are preparing their negotiating leverage through military exercises, carrier deployments, and strategic international messaging. The critical focus is on the outcome of Tuesday’s talks: if progress is made, it would be market-positive. However, a comprehensive resolution in one session appears unlikely. Be alert to the possibility that, should negotiations collapse, the U.S. might signal Israel to launch direct strikes on Iran, while its three aircraft carriers could coordinate military action. Additionally, watch for whether Iran’s navy will fully blockade the Strait of Hormuz. In the worst-case scenario of military conflict, global energy prices could spike sharply. With risk and safe-haven markets already operating under low liquidity, these developments demand heightened caution. 2. On Friday, the December PCE price index and the initial Q4 GDP data will be released simultaneously—both must be analyzed together. Current expectations: December PCE is forecast to rise slightly above the prior reading, while Q4 GDP is expected to show a clear decline versus prior levels. Taken together, this data suggests slowing U.S. economic growth alongside persistent inflation that has not yet fully eased. While this supports a modest upward revision in rate cut expectations, it is unlikely to trigger a strong or rapid shift toward aggressive rate cut pricing. Personally, I expect at most a further increase in the probability of a June rate cut. Currently, the probability of a June rate cut stands at 50.8%, placing it in a period of uncertainty. A breach above 60% signals growing optimism; above 70% indicates stronger market confidence; above 80% implies markets are beginning to price in a June cut; and above 90% means rate cut expectations are effectively locked in. Therefore, if Friday’s data lifts the June rate cut probability to 60% or even 70%, it would deliver a significant boost to risk assets. Additionally, if Trump seeks stronger economic data more conducive to rate cuts, Q4 GDP would ideally remain near 4%, while PCE should fall below 2.8%—though this assumes fully manipulated data, which is highly unlikely. 3. All trading days this week fall within China’s Spring Festival holiday period. The Chinese stock market remains closed, while Hong Kong markets reopen on Friday—meaning half of Asia’s financial markets are effectively shut. China’s market closure will further reduce liquidity during Asian trading hours. For cryptocurrency markets, this may suppress trading volume for #Bitcoin during Asian session hours. Weekly Summary: During China’s Spring Festival holiday, Asian session momentum for crypto markets remains weak. Whether U.S. session activity can provide stronger upward momentum for BTC remains uncertain—hope rests primarily on Friday’s data and whether it can further increase rate cut probabilities. For Asian equity markets, the week-long holiday may lead to delayed negative sentiment, with potential positive effects concentrated next week—monitor accordingly. For key U.S. market events this week, follow @MSX_CN’s weekly report below.

Retail data unexpectedly dropped, consumption stagnated, the probability of a rate cut increased, and risk appetite for US equities rose, but risk assets remain cautious, why? Tonight's retail data was somewhat surprising, showing 0% for December retail, significantly below expectations and the previous value, indicating that consumption in December stagnated. Although the current mainstream interpretation does not indicate risk, the risk factors have not been completely eliminated! This retail data boosted the probability of a rate cut, pushing the March rate cut probability from 17.7% to 21.6%, and the April rate cut probability from 32.4% to 36.9%, while the June rate cut probability dropped from 51.6% to 49%. In other words, although tonight's retail data pushed for a rate cut, it did not push the short-term rate cut probability above 50%, instead lowering the probability of a June rate cut. Therefore, this retail data is not yet safe. Currently, if Friday's CPI rises above expectations, the expectation of stagflation will increase, further boosting the expectation of a rate cut, but this would be a blow to the economy. If Wednesday's employment data drops below expectations, the macroeconomic data for this week would indicate low consumption, high inflation, and low employment, a stagflationary economy, which could directly lead to market expectations of an economic recession. The true safety of the employment data expectations still depends on how the employment and inflation data turn out. What impact does the consumption data have on financial markets? Gold maintains a stable upward trend, with multiple uncertainties such as the US economy, deficit, policy direction, and geopolitics being the main factors keeping gold on a steady upward trajectory. The US dollar slightly weakened, as the data signaled economic weakness, which is bearish for the dollar. US Treasury 10-year and 30-year long-term interest rates rose, with the 30-year rate rising more than the 10-year rate. This indicates that the market is concerned about future inflation, especially fearing a future stagflationary environment amid declining consumption capacity. At the same time, the 30-year long-term bonds outperforming the 10-year bonds in the short term suggests an increased demand for duration risk. The economic expectations brought by the data have not directly damaged market confidence, so US equity indices rose, and the SPHB/SPHQ ratio increased, indicating an increase in risk appetite for US equities. However, the gains in tech stocks and #Bitcoin were not significant, suggesting that the current macroeconomic narrative and optimistic risk appetite cannot directly attract market capital, especially in the current phase of poor liquidity. To attract capital to buy in, a more optimistic and powerful narrative is needed. Overall summary: At this stage, employment and CPI data have not yet been released, and financial markets continue to wait for the data to clarify expectations. On the other hand, in a phase of poor macroeconomic narrative and liquidity, capital is also waiting for clearer signals. Although risk appetite has increased in the short term, the market has not made effective decisions yet. We still need to continue watching the employment data and Friday's CPI data. For the future, either the probability of rate cuts in March and April will be pushed above 50%, or the economic data will show stable and optimistic economic growth, which is positive for US blue-chip stocks. BTC has no better appeal, and gold will continue to fluctuate.

Over the weekend, #Bitcoin sharply dropped, creating a gap in BTC's futures price, currently between 78,700 and 81,800. Good news: Once BTC stabilizes, the demand to fill this gap could potentially push the price back up to around 81,800. Bad news: Whether the gap gets filled still depends on the price stabilizing first. Moreover, filling the gap only indicates a potential rebound level, not the sustainability or strength of the rebound. Going forward, we still need to observe whether the price can effectively stabilize and initiate a rebound, as well as how the price behaves after the rebound—whether it consolidates and remains stable.

The case is solved: a large-scale migration from payment-focused stablecoins to yield-bearing stablecoins has caused significant market value changes in USDC! I decided to do it myself instead of relying on others, and after checking the data, it turned out exactly as I suspected. USDC has experienced massive net outflows for two consecutive days, while the total market value of stablecoins remained unchanged. This doesn't mean real outflows, but rather a shift in capital, as investors are seeking stability without yield. I checked the data from the same data platform for the recent days, and the most significant changes were in USDC and USD1: - January 22 to January 23: USDC had a net outflow of $714 million, while USDe's market value increased by $122 million. This was a day of significant net outflow for USDC. - January 23 to January 24: USDC had a net outflow of $832 million, while USD1 increased by $1.063 billion. Over the three-day period, the main payment-focused stablecoins saw the following changes: - USDT (a major stablecoin) had a net outflow of $177 million. - USDC had a net outflow of $1.546 billion. - Yield-bearing stablecoins saw the following increases: - USDe: $111 million. - USD1: $963 million. - PayPal USD: $70 million. Although this capital movement is better than a pure outflow, it's not much better. The shift from payment-focused to yield-bearing stablecoins suggests that institutions or large investors have no short-term trading or buying intentions, so they are opting for yield-bearing stablecoins to earn interest. Moreover, the fact that USDC is experiencing real net outflows means there are fewer traders, or that current USDC users are not optimistic about the market outlook, with reduced investment intentions. This is not a positive sign for the future of BTC. Of course, capital flow data is lagging and should only be used as a reference. It cannot be used as a forward-looking indicator to judge whether the market will improve next week. However, as the market improves and capital returns, it can be seen as a sign of market confidence.

The current trend of #Bitcoin is largely in line with my expectations. The rebound last night was weak, which has increased the risk of further declines, and the 4-hour MA120 has already been broken. The next key support level to watch is around the 4-hour MA200 (90,500). Combined with the pre-market movement in U.S. equities, I expect Bitcoin to follow lower when U.S. markets open tonight before stabilizing and potentially rebounding. Currently, the macro environment is mainly driven by Trump's weekend announcement of increased tariffs on NATO allies. Since U.S. markets were closed yesterday, the Asian and European sessions priced in the initial impact. Now that it's the U.S. session, after the market re-prices the macro risks at the open, prices should stabilize. Given the #BTC trend, I suggest setting a stop-loss near 90,500 and waiting to see how the U.S. market opens tonight. Personally, I expect a short-term expansion in the decline at the open, followed by a consolidation and rebound. The ongoing tariff issue has already been priced in for some time and is no longer causing significant panic or selling pressure. The recent pullback has been sufficient. If the 90,500 level holds, I believe BTC can continue to rebound. The 4-hour chart is now nearing the completion of a deep correction. I view this development very positively, as price stabilization at this point could signal the start of a new rebound. Looking ahead, the next resistance target could be around 98,000.