Welcome to the weekly UpCrypto Trading Newsletter.
Brief Overview
What does Week 4 bring?
Key economic data: Inauguration Day of Donald J. Trump and labor market indicators are in focus.Weekly Market Wrap:
Recently, markets reacted to favorable inflation data and slightly easing bond yields.Earnings Highlights:
This week, companies such as Netflix, 3M, Procter & Gamble, Bank of America, Morgan Stanley, and Delta Air Lines will release their earnings.
What does Week 4 bring?
Monday, January 20:
Inauguration Day Donald J. Trump
Trump’s inauguration could be pivotal, particularly if he announces crypto-friendly or pro-growth measures.
Tuesday, January 21:
No major data releases
Markets will watch for any political statements following the inauguration.Earnings Reports đź“ť
Earnings from Charles Schwab Corp. (SCHW), Netflix Inc. (NFLX), Interactive Brokers Group Inc. (IBKR), Capital One Financial Corp. (COF), United Airlines Holdings Inc. (UAL).
Wednesday, January 22:
MBA 30-Year Mortgage Applications Index
A key indicator for real estate financing and consumer demand.Earnings Reports đź“ť
Earnings from Procter & Gamble Co. (PG), Johnson & Johnson (JNJ).
Thursday, January 23:
Initial Jobless Claims
A decrease to 215,000 is expected (previously 217,000). A key signal of labor market stability.Earnings Reports đź“ť
Earnings from GE Aerospace (GE), American Airlines Group (AAL), Alaska Air Group Inc. (ALK).
Friday, January 24:
Existing Home Sales
4.16 million sales expected; a relevant gauge for the housing sector.University of Michigan Consumer Sentiment – Final
A forecast of 73.2, offering insight into consumer behavior.Earnings Reports đź“ť
Earnings from American Express Co. (AXP), Verizon Communications Inc. (VZ), Nextera Energy Inc. (NEE), HCA Healthcare Inc. (HCA).
Weekly Market Wrap Before the Outlook
Inflation Data Sparks Speculation on Earlier Rate Cuts
Recent Core CPI and PPI figures came in below expectations, prompting the market to pull forward rate cut expectations from September to June—contradicting Powell’s hawkish statements in December. Whether these forecasts become reality is secondary; the critical point is that the market firmly believes in additional rate cuts.
Inflation Data at a Glance:
CPI: +2.9% YoY (in line with forecasts), Core CPI +3.2% (slightly lower than expected).
PPI: +3.3% YoY, Core PPI +3.5%. Both slightly below estimates but higher than in November.
The dollar’s weakness could briefly foster a risk-on scenario, though it remains fragile. While these inflation data points provide short-term relief, it’s important to remember the Fed remains on a cautious trajectory.
Crypto and Market Outlook for Week 4
Inauguration Day and CPI as Key Drivers
Trump’s inauguration on Monday could influence markets in the short to medium term. If he announces pro-crypto or expansive measures, it could support markets and propel the crypto rally. If his statements remain vague, volatility may rise.
Overall Market Strategy
The recent cooler inflation data has offered a short-lived boost. A gradual approach to building positions (DCA) remains advisable, as the Fed continues to sound hawkish and yields could rebound at any time.
Market Overview: BTC & SPX
SPX: On Friday, the index opened with a significant gap above the trendline we recently discussed, but fell just short of the 6,000 mark. A daily close substantially above this level would signal a risk-on environment and suggest a potential trend reversal. Since the SPX ended just under 6,000, it remains to be seen whether a sustainable breakout will occur next week.
Bitcoin: BTC broke out of a diagonal trendline dating back to December, aided in part by strong ETF inflows. Positive inflation data apparently triggered a rapid shift from negative to strongly positive ETF demand, and BTC managed to break out from this resistance line.
Current Price Action
BTC already tested the 105K mark and is currently oscillating between 102K and 105K.
Outlook: New ATH Before Trump’s Inauguration?
If Bitcoin builds further momentum and holds above 102K, a run toward the previous ATH is conceivable—possibly even before Donald J. Trump’s inauguration. Traders should note that a decisive daily close above 102.8K is considered a stable signal for upward momentum.
Conclusion
Trump’s Inauguration: Could temporarily boost investors’ risk appetite, especially if pro-crypto statements are made.
Fed Remains Hawkish: Cooler inflation data provides short-term relief, but DCA remains prudent.
SPX Stalls at 6,000: A daily close above this threshold would be a risk-on signal.
Bitcoin: Hovering between 102K and 105K; a sustainable breakout could open the path toward a new ATH.
Overall, investors should remain vigilant, follow long-term strategies, and be prepared for short-term volatility. We’ll keep you posted with ongoing updates and analysis.
Here's to a successful week, and stay tuned for more weekly outlooks on the crypto and financial markets.
Best regards,
your UpCrypto Team!
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