US December CPI Index
The headline CPI jumped from 3.1% YoY in November 2023 to 3.4% in December 2023, and a month-on-month increase of 0.3%, compared to expectations of 3.2% and 0.2%, respectively. The year-on-year change in the core CPI was 3.9%, slightly higher than the expected 3.8%. Although inflation has been declining over the past 18 months, we may now see some signs of a rebound in inflation.
U.S. 2-year Treasury yield
Despite a slightly higher-than-expected consumer price index, Treasury yields continued to move lower this week as investors look forward to lower interest rates. Demand for Treasury auctions also appeared to recover from last quarter, suggesting renewed confidence in future interest rates.
Short-term Bitcoin holders are taking profits
Short-term Bitcoin holders are taking profits after the approval of a Bitcoin spot ETF - about $2.2 billion worth of Bitcoin has moved from short-term holders to exchanges, a record high. Those hoping to trade the "good news, sell event" trade appear to have succeeded.
However, Bitcoin’s long-term holders showed a different dynamic, with zero activity during this major milestone. More than 70% of holders still haven’t moved in over a year. Speculators will move the price in the short term, but as long as long-term holders continue to hold a significant portion of the total supply, the long-term outlook remains bullish.
Miners are actively selling
Our analysis shows that most miners are selling their holdings, as indicated by the declining miner balances over the past 30 days. One possible reason behind this could be the decline in miner revenue. As shown in CrvptoQuant, BTC’s Miner Position Index (MPI) shows that most miners are selling more compared to the one-year average.
Bitcoin Technical Analysis
Bitcoin price appears to be in a similar position to Nasdaq price. While we are very bullish on Bitcoin in 2024, what will happen in the short term is still up in the air. Watch for a break below the 50-day moving average around $41,500 to confirm a pullback lower and a break above $49,000 to confirm an upside move.
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Crypto Market Investment Outlook 2024
