Crypto Assets Market Weekly Report: BTC Shows Signs of Adjustment After Hitting All-Time High

Recently, the Crypto Assets market experienced a strong surge, with Bitcoin (BTC) reaching a historic high in US dollars. However, as global financial markets have shown volatility, the crypto market has also begun to show signs of adjustment.

Macroeconomic Environment

The global financial markets have been influenced by multiple factors this week. A significant fiscal bill in the United States has been approved by the House of Representatives, which involves reforms in various areas such as taxation and immigration. However, this bill could lead to a substantial increase in the U.S. debt ceiling, raising concerns in the market about the U.S. government's ability to meet its debt obligations.

As a result, the yield on the 10-year U.S. Treasury rose to a high of 4.5%. High Treasury yields may suppress investment and consumption, which in turn could affect corporate profits. The three major U.S. stock indices all fell this week, with the Nasdaq, S&P 500, and Dow Jones Industrial Average dropping 2.47%, 2.61%, and 2.47%, respectively.

The US dollar index also ended its previous streak of gains, falling 1.03% this week to 99.1252. Meanwhile, the price of gold, which is considered a safe-haven asset, rose 1.98% to $3359.90 per ounce.

Crypto Assets Market Performance

Despite the uncertainty in the macro environment, the crypto assets market remains strong. Bitcoin broke its historical high earlier this week, reaching a new high of $112,000 per coin. This surge is attributed to the continued inflow of institutional funds, increased holdings by listed companies, and a favorable regulatory environment.

From a technical perspective, Bitcoin's price has been operating above the 5-week moving average throughout the week, with increased trading volume. The weekly MACD indicator has just turned positive, indicating that the medium-term upward trend is still ongoing. However, due to a prolonged period of increase, the market may experience a correction in the short term.

Progress on Stablecoin Regulation

The United States and Hong Kong have made significant progress in stablecoin regulation. The U.S. Senate has passed a key procedural vote, paving the way for the establishment of a stablecoin regulatory framework. This legislation, known as the "Genius Act," will provide guidance on aspects such as the definition, regulation, and auditing of dollar stablecoins.

At the same time, the Hong Kong Legislative Council also passed the "Stablecoin Regulation Draft", establishing a comprehensive licensing and regulatory framework for stablecoins pegged to fiat currencies. These developments indicate that, in addition to Bitcoin as a store of value, broader applications based on blockchain are also being recognized by regulatory authorities.

Capital Flow Analysis

Despite the fluctuations in traditional financial markets, the crypto assets market has still maintained strong capital inflows. In the past week, the market saw a total inflow of 5.574 billion USD, with stablecoins accounting for 2.548 billion USD, Bitcoin spot ETFs accounting for 2.775 billion USD, and Ethereum spot ETFs accounting for 250 million USD.

However, as the price of BTC reaches new highs, some long-term holders have started to reduce their holdings. This week, the number of BTC flowing into exchanges reached 159,869.37 coins, indicating that some investors may have chosen to take profits at high levels. Nevertheless, the total amount of BTC on centralized exchanges continues to decrease, currently down to 2,987,307 coins.

Market Outlook

Currently, the Bitcoin market is still in an upward trend, but it may face adjustment pressure in the short term. The profit-taking behavior of long-term holders may bring some selling pressure, but overall market sentiment remains optimistic.

According to data from eMerge Engine, the EMC BTC Cycle Metrics indicator is 0.75, indicating that the market is still in an upward phase. However, investors should closely monitor changes in the global macroeconomic situation and the potential impacts of U.S. fiscal policy.

Against the backdrop of a gradually clarified regulatory framework for stablecoins, we can expect the potential of blockchain technology in broader financial applications to be further unleashed. This may bring new development opportunities for the entire Crypto Assets ecosystem.