BTC weekly rise exceeds 10%, nearly 7 billion USD get on board

This week, Bitcoin opened at $85177.33 and closed at $93780.57, rising 10.10% over the week, with a fluctuation of 12.73%. It has achieved three consecutive weeks of rebounds, and the trading volume has increased. On Monday, it surged, breaking through the 120-day moving average, and has been operating above the moving average for the entire week, indicating a strong willingness to go long.

The U.S. government has sent positive signals regarding the progress of trade negotiations, but on the other hand, its stance remains ambiguous, indicating that the outcome of the negotiations is still uncertain. The U.S. president stated that he would not remove the Federal Reserve chairman, alleviating market concerns about the independence of the Federal Reserve, leading to a stabilization and rebound in the stock, bond, and foreign exchange markets.

Federal Reserve officials have released positive signals. Some officials stated that the Fed is capable of taking swift action once circumstances change. Other officials pointed out that if the job market deteriorates severely, it may prompt the Fed to accelerate and increase interest rate cuts.

Recent performance of the global market, especially the US financial market, fully reflects the irrationality of trade disputes and the huge impact on the world economy. The compromise attitude taken by the US government and the Federal Reserve towards market fluctuations confirms that politics, economy, and market will operate along a rational path in the medium to long term.

However, the market rebound is mainly due to a temporary alleviation of concerns about a trade dispute potentially triggering an economic recession. The subsequent trend will depend on whether trade negotiations can be reached in a timely manner and whether the U.S. economy truly falls into recession. Based on this judgment, the disclosure of U.S. stock first-quarter earnings reports is particularly important.

Policies, Macroeconomic Finance, and Economic Data

The U.S. government stated that trade negotiations are making good progress, especially the negotiations with China are also actively ongoing. However, the Chinese government stated that both sides have not engaged in negotiations.

Negotiations between Japan and South Korea with the United States may quickly reach favorable terms for the U.S., setting an example for other countries. In contrast, there are no signs that U.S.-China negotiations have entered a substantive consultation phase. Therefore, the second phase of trade negotiations has just begun, and there is still a long way to go before significant progress can be made. This limits the time and space for a market rebound, making it difficult to be optimistic in the short term.

The speech by the Federal Reserve Chairman focused on the inflation and economic uncertainty brought about by tariff policies, setting the tone for the upcoming May monetary policy meeting, and reaffirming the Fed's independence. He insisted on a data-driven policy, maintaining stable interest rates. There will be no rate cuts due to political pressure, but he hinted that if inflation or employment data changes significantly, policy adjustments may occur. Other Fed officials' speeches emphasized a more "dovish" stance, suggesting a possible rate cut in June.

As of the weekend, the market expects a 62.7% probability of a rate cut in June. With the market rebounding, this probability has decreased compared to the previous two weeks.

The Federal Reserve's Beige Book shows that 8 out of 12 Federal Reserve districts reported "no significant change" in economic activity, indicating a slowdown in overall economic growth. Only a few districts reported slight growth, while some indicated a deterioration in economic outlook. Businesses reacted strongly to tariff policies, with several districts raising their inflation expectations for 2025 to 3.5%, and manufacturing activity further contracted. Consumer spending grew moderately, but high prices and tariff expectations began to undermine consumer confidence. Employment levels remained generally stable, but hiring activity weakened, and layoffs increased in some sectors. Wage growth slowed, but it was still above pre-pandemic levels.

With the easing attitude of the government and the Federal Reserve, the extreme panic in the market has eased. The dollar index rebounded to 99.613 after falling to 97.991 and stabilized. The yield on 2-year Treasury bonds fell by 1.42% to 3.7560%, while the yield on 10-year Treasury bonds dropped by 2% to 4.245%. Risk assets performed better, with the Nasdaq, S&P 500, and Dow Jones rising by 6.73%, 4.59%, and 2.48% respectively for the week.

Gold fell sharply after reaching 3499.93 USD/ounce at the beginning of the week, and turned to decline for the whole week.

Selling Pressure and Sell-off

With the significant price rebound, the scale of on-chain selling has increased this week, mainly from short-term holders. The total on-chain selling volume for the week rose to 197040.26 BTC, of which short-term holders accounted for 190568.61 BTC and long-term holders 6471.65 BTC. The net outflow from exchanges was 62696.12 BTC, marking the largest single-week net outflow since this market cycle began. This has alleviated market selling pressure on one hand, while on the other hand, it demonstrates the strong enthusiasm in the market for accumulating positions.

Long-term holders increased their holdings by more than 120,000 coins this week, while another group worth noting is the shark group (clusters of addresses holding 100-1,000 Bitcoins), which increased their holdings by nearly 30,000 coins in a single week.

Fund In and Out

With the Federal Reserve and government returning to a rational stance, the inflow of funds into stablecoins and ETF channels this week has been significant, totaling nearly $7 billion.

In 6 out of 7 trading days, there was a net inflow, indicating that medium to long-term funds are very actively getting on board. However, it should be noted that as the price of Bitcoin rebounds to around $95,000, along with ongoing concerns about trade disputes and economic recession, and the most optimistic interest rate cuts still a month away, market divergences remain, making short-term fluctuations difficult to avoid.

Cycle Indicator

According to the data platform, the BTC cycle indicator is 0.50, and the market is in a rise continuation phase.