Week-over-week performance:
- BTCUSD: 101,889 / +9.91%
- ETHUSD: 3,670 / +9.93%
- US10Y: 4.61% / +10 bps
- DXY: 108.14 / +0.13%
- GOLD (USD/OZ): 2,645 / +1.25%
- SPX: 5,975 / +0.91%
- NDX: 21,559 / +1.49%
- DVOL: 58.80 / -2.7%
- VIX: 16.03 / -7.7%
Looking ahead – Economic calendar:
- Tuesday, 07 January 2025: CH CPI, EU CPI, US JOLTs, $SONIC goes live
- Wednesday, 08 January 2025: US ADP NonFarm Employment Change, FOMC minutes, CES 2025 (1/4)
- Thursday, 09 January 2025: US Holiday, US Jobless claims, CES 2025 (2/4)
- Friday,10 January 2025: US NFP, US Unemployment, CES (3/4)
- Saturday, 11 January 2025: CES (4/4)
On the macro side:
We are now one week into the new year, and risk assets have started off on a strong footing, with tech equities leading the way and the VIX settling into a neutral range.
The Fed’s hawkish rate cut in December initially sent markets into risk-off mode, but we have since been in a recovery phase, awaiting a clear trend confirmation.
This week, the focus will shift to the FOMC minutes, alongside key economic indicators such as JOLTs and the NFP report. Barring any unexpected developments, I anticipate volatility to remain subdued and the current positive trend to persist.
On the FX side:
The dollar kicked off the year at a multi-year high, with the DXY reaching levels last seen in late 2022.
This strength has been accompanied by a rise in US Treasury yields, driven by a steepening of the curve.
Fed funds futures are pricing in an end-of-year target rate just 25 bps below current levels, leaving significant room for adjustment, especially given the potential influence of the new administration.
At present, markets are pricing in only one rate cut by June, but I remain sceptical about outlook.
On the crypto side:
Crypto has started the year on a strong note, with BTC reclaiming the USD 100,000 mark—a threshold that faced significant selling pressure in December.
Funding rates are healthy, providing the market with ample room for a sustained buildup. The same applies to the volatility space, where crypto volume is trading around median levels, accompanied by neutral call skew positioning. Traders have yet to reposition.
In the altcoin market, the key question for 2025 remains: What will define the trend? While 2024 was dominated by AI, MEMEs, and ETFs, the narrative could shift dramatically.
If Trump delivers, it is easy to imagine BTC and altcoins once again outperforming traditional risk assets. One major theme I expect to see is revenue sharing through DeFi protocols. While some new crypto ETFs may be launched, I do not see strong demand for them just yet. However, they could act as a catalyst for sharp moves in specific names such as LTC, SOL, DOGE, BCH, and XRP.
This could also be the year we witness substantial changes in the top 10 crypto rankings.
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