Bitcoin Hits $100K Again, But Is Trouble Brewing?

DAILY MARKET OVERVIEW

Bitcoin Rallies on Fed Hopes

👋 Hey Crypto Enthusiasts! Bitcoin has pushed towards 100K yet again, fueled by cooling U.S. jobs data. But just as momentum picked up, uncertainty around Trump’s tariff policies put a damper on the rally. Here’s what you need to know.

U.S. Jobs Data Sends Bitcoin Past $100K

Bitcoin ended a three-day decline and surged past 100,000 for the first time since February 4. Weaker-than-expected U.S. job growth data increased speculation about future Federal Reserve rate cuts.

Key Job Market Data (January Report)

• Total Jobs Added: 143,000 (vs. 170,000 expected)

• Unemployment Rate: Dropped to 4% (better than the 4.1% forecast)

• Wage Growth: Increased by 0.5% (vs. 0.3% expected)

Slower job growth is usually seen as a sign that the economy is cooling, which can push the Federal Reserve to cut interest rates. Lower rates tend to benefit-risk assets like Bitcoin, as they make borrowing cheaper and encourage investment.

What Analysts Are Saying

• Zach Pandl, Grayscale’s Head of Research, said that as long as stock markets stay stable, Bitcoin could reach new highs later this quarter.

• Crypto analyst Mister Crypto called the jobs report "bullish for crypto."

• Although the chances of a March rate cut dropped from 15% to 8%, traders still expect two rate cuts later in 2025, which could support Bitcoin’s long-term momentum.

Trump’s Tariff Plans Cloud Market Sentiment

Just as Bitcoin surged, uncertainty around new trade tariffs from Trump created concerns in financial markets.

According to reports, Trump told Republican lawmakers he plans to announce reciprocal tariffs as early as Friday. This means the U.S. would tax imports at the same rate that other countries tax U.S. exports. For example, if China taxes American cars 25%, the U.S. would impose the same 25% tax on Chinese car imports.

Why It Matters for Bitcoin

• Uncertainty in financial markets – If trade tensions rise, stocks and traditional markets could suffer. Bitcoin sometimes benefits as an alternative asset during uncertainty, but extreme market stress can hurt all risk assets.

• Inflation concerns – Higher tariffs could increase the cost of goods, leading to inflation. This might cause the Federal Reserve to keep rates higher for longer, which could slow Bitcoin’s growth.

• Impact on investor sentiment – A trade war could weaken confidence in global markets, which may lead to volatility in Bitcoin and other assets.

Final Thoughts

Bitcoin's surge to $100K was fueled by weak job data and growing expectations of future Fed rate cuts. However, uncertainty surrounding Trump’s proposed tariffs could introduce new risks to financial markets.

As we approach Friday’s tariff announcement, key factors to watch include:

• The Federal Reserve’s reaction – Will policymakers adjust their stance in response to economic data?

• Stock market response – If equities decline, will Bitcoin hold its ground or follow suit?

• Tariff details – A potential trade war could drive Bitcoin into safe-haven territory, but it could also strain liquidity and trigger short-term volatility.

Stay informed and keep an eye on how these developments shape Bitcoin’s trajectory in 2025.

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Stablecoins Are Surging: Why This Matters During the Market Correction

Despite the ongoing crypto market correction, stablecoins are expanding rapidly, signaling strong liquidity and investor confidence.

Coinbase announced today that USDC’s supply has more than doubled over the past year. USDT has also seen significant growth, reinforcing the critical role of stablecoins in the crypto ecosystem.

This growth is arguably just as important as Bitcoin’s price movement.

Why Stablecoin Growth Matters

🔹 Higher Liquidity
More stablecoins mean more liquidity in the crypto market

🔹 Capital Stays in Crypto
Instead of cashing out to fiat, investors keep funds in stablecoins, making them instantly deployable for other assets.

🔹 Stronger Market Stability
A rising stablecoin market cap shows that investors aren’t exiting crypto, even during downturns.

🔹 Growing Institutional Adoption
Stablecoins connect traditional finance with blockchain.

Stablecoin expansion in a bearish market is a strong sign of resilience. It indicates that liquidity is growing, investors remain engaged, and crypto is evolving into a more mature financial system.

NEWS OVERVIEW

The Latest Crypto Headlines 📰 

BlackRock Increases Stake in Strategy Amid Bitcoin Growth
BlackRock raises its stake in Strategy to 5%, holding 11.26M shares as institutional confidence in bitcoin exposure grows.

Japan’s Regulator Requests Crypto Exchange App Blocks
Japan’s FSA asks Apple and Google to block Bybit, MEXC, KuCoin, and others from their app stores, citing regulatory violations.

Sony’s Soneium Launches Music NFT Collection
Sony’s blockchain platform Soneium partners with Coop Records to release music NFTs, promoting fair royalties for artists.

SEC Advances Grayscale’s Solana ETF Proposal
The SEC acknowledges Grayscale’s Solana ETF filing, marking a regulatory shift that could lead to approval under the Trump administration.

YOUTUBE INFLUENCER SUMMARY

Summary From The Top Influencers 📷️ 

Lark Davis - Crypto Holders This Is Extremely Worrying (07.02.2025 Summary)

Lark Davis explores critical concerns in today’s crypto market, focusing on Bitcoin’s technical signals, altcoins’ challenges, and the macroeconomic landscape. Here's a breakdown of what’s happening and how to approach these uncertain times.

Bitcoin Outlook

• Bitcoin’s momentum is slowing, with technical indicators suggesting possible short-term declines.

• If prices fall below $89,000, further downside could occur, but Bitcoin’s long-term fundamentals remain strong.

• Investors should focus on Bitcoin’s resilience and avoid reacting impulsively to short-term fluctuations.

Altcoins Are Struggling

• Many altcoins are down significantly, and some have dropped to critical price levels.

• Coins with stronger fundamentals, like Ethereum and Solana, might weather the storm better than speculative assets.

• Casual investors should consider whether their altcoin holdings align with their long-term goals.

Macro Trends and Market Impact

• The Federal Reserve’s potential easing of monetary policy in Q2 could boost liquidity and support market growth.

• Institutional interest in crypto remains strong, with pending ETFs for Bitcoin and some altcoins, signaling potential demand.

• While Lark predicts Bitcoin could reach $150k by April, he emphasizes the importance of staying adaptable to changing conditions.

Final Thoughts

• Avoid risky trading strategies like high leverage; focus on long-term growth.

• Bitcoin is likely the safest choice during periods of uncertainty, but altcoins can present opportunities if chosen carefully.

• Be patient and stick to your investment plan, avoiding emotional decisions during market downturns.

• Lark’s advice: Stay informed, focus on the big picture, and protect your portfolio by managing risk effectively.
  

Benjamin Cowen - Why Has Alt Season Not Happened Yet? (07.02.2025 Summary)

Benjamin Cowen explains why the long-anticipated altcoin season has yet to occur in this market cycle. Through a mix of data-driven analysis and historical comparisons, he argues that macroeconomic conditions, particularly quantitative tightening (QT), have played a major role in suppressing altcoin performance against Bitcoin. Here’s what you need to know.

Why Alt Season Hasn’t Happened

• What is Alt Season? A period when Bitcoin dominance drops, and altcoins outperform significantly, both in USD and Bitcoin terms. Past examples include 2017 and 2021.

• Current Reality: Bitcoin dominance has steadily risen over the past three years, with altcoins consistently losing value against Bitcoin.

• Key Insight: The continued implementation of QT by the Federal Reserve has kept liquidity low, preventing the conditions needed for an altcoin rally.

Challenges Altcoins Face

1. Increased Supply, Same Liquidity:

   • Despite the launch of thousands of new altcoins, the overall liquidity in the crypto market hasn’t increased proportionally. This has spread investments thinner, diluting altcoin performance.

2. Weak Alt-Bitcoin Pairs:

   • Most altcoins, including Ethereum, have been steadily losing value when paired against Bitcoin. For example, 1 Bitcoin now buys significantly more ETH than it did in 2021.

3. Economic Pressure:

   • The current macro environment, marked by restrictive monetary policies and high inflation, has made speculative assets like altcoins less appealing to investors.

Key Metrics to Watch

• Social Risk Indicator:

  • Social risk measures retail interest in crypto through metrics like YouTube views and Twitter engagement. Historically, alt seasons have coincided with rising retail interest. In this cycle, social risk has remained low, signaling a lack of broad retail participation.

• Alt-Bitcoin Pair Lows:

  • According to Cowen, altcoins may need to hit deeper lows against Bitcoin before a meaningful recovery can occur, as seen in past cycles.

• Bitcoin Dominance (Excluding Stablecoins):

  • When retail participation increases and Bitcoin dominance starts to drop, it could signal the beginning of an altcoin rally.

What Needs to Happen for Alt Season

• End of Quantitative Tightening:

  • Past alt seasons have followed the Federal Reserve’s shift from QT to quantitative easing (QE). Without a Fed pivot, altcoin performance is unlikely to improve significantly.

• Bitcoin’s Role:

  • Bitcoin needs to sustain a strong rally to draw retail investors back into the market. This increased retail activity could then spill over into altcoins.

• Market Cycles:

  • Altcoin dominance tends to increase when the total altcoin market cap reaches parity with Bitcoin’s market cap, which hasn’t happened this cycle.

Final Thoughts

• Benjamin’s Advice: Focus on preserving your portfolio’s Bitcoin (Satoshi) value rather than chasing speculative altcoin rallies. Altcoins are best viewed as oscillators that perform well in specific phases of the market cycle but often bleed value against Bitcoin during downturns.

• Be Realistic: While an alt season would be ideal for many investors, Cowen emphasizes separating "what we want to happen" from "what is likely to happen."

• Patience is Key: The current cycle may feel longer and more challenging, but history suggests altcoins could rebound strongly when macroeconomic conditions shift.

• Closing Note: Stay cautious, focus on Bitcoin, and keep an eye on macroeconomic developments for signs of a Fed pivot. Alt season may eventually come, but it will likely require more time and a significant shift in market conditions.

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