 ▲ Bitcoin (BTC) / ChatGPT-generated image |
Bitcoin (BTC) plunged below the previous cycle’s peak and set a year-to-date low, pushing market fear to an extreme. However, new macro indicators such as the ISM Manufacturing Index are signaling the opening act of a liquidity surge, offering clues for a rebound.
Guy Turner and Nic Puckrin, co-hosts of the crypto-focused YouTube channel Coin Bureau, said in a video released on February 9 (local time) that Bitcoin suffered a hellish week as it slid into the low $60,000s. They explained that downside pressure has intensified as a Chicago Mercantile Exchange (CME) gap remains unfilled amid news of a U.S. government shutdown. In particular, the breakdown of the 100-week moving average on the weekly chart presents a grave risk of a decline toward the 200-week moving average in the $58,000 to $60,000 range.
In this cycle, the indicator showing the strongest correlation with Bitcoin is shifting from the traditional M2 money supply to the ISM Manufacturing Index. The ISM’s move above 50 to its highest level since 2022 indicates manufacturing has entered an expansion phase and has historically served as a leading indicator for rising global liquidity and rallies in risk assets. Analyst Benjamin Cowen remains skeptical, but Real Vision co-founder Raoul Pal expects the breakout to presage renewed liquidity provision.
Smart money is already rotating funds away from crypto volatility into the defense industry and commodities in search of new sources of return. As geopolitical tensions intensify, the arrival of a Defense Super Cycle has lifted defense-related equities, while commodities such as copper and uranium have emerged as attractive alternatives. Meanwhile, record gold accumulation by the People’s Bank of China (PBOC) and private investors hedging against a weaker yuan highlights a broader shift in traditional asset markets.
Ethereum (ETH), the leading altcoin, faces heightened downside risk after losing the key support level at $2,111. Market concerns have grown as Ethereum founder Vitalik Buterin expressed negative views on the Layer 2 roadmap and sold part of his personal holdings. In the options market, large negative gamma around $75,000 is creating structural selling pressure, forcing dealers to sell Bitcoin as prices fall and further weighing on the market.
The crypto market is approaching a critical juncture this week, with upcoming Consumer Price Index (CPI) and employment data set to shape the Federal Reserve’s monetary policy trajectory. Amid ongoing conflicts of interest between major banks and the industry over the U.S. crypto market structure bill (the Clarity Act), Strategy board chairman Michael Saylor reaffirmed his unwavering conviction by purchasing an additional $8 million worth of Bitcoin. While the market is enduring a painful correction, it continues an intense search for fresh momentum alongside shifting macroeconomic indicators.
*Disclaimer: This article is for investment reference only, and no responsibility is assumed for investment losses based on it. The content should be interpreted solely for informational purposes.*