Crypto Assets Market Weekly Report: Bitcoin Rebound Continues, Dollar Index Hits New Low

This week, Bitcoin (BTC) continued its upward momentum, opening at $83,733.07 and ultimately closing at $85,177.34, with a weekly increase of 1.72% and a fluctuation of 4.06%. This marks the second consecutive week of rebound for BTC; however, the market lacks sufficient upward momentum and trading volume has significantly shrunk. Currently, BTC prices have been operating outside the descending channel for two consecutive weeks and are testing the 200-day moving average, a key technical indicator.

In terms of the global economic situation, the U.S. government is advancing the second phase of the "reciprocal tariff war" - "negotiation". However, the preliminary negotiation results with Japan did not meet expectations, putting the U.S. government in a difficult position. Major trading partner countries are adopting a tough stance, and secondary target countries are also gradually shifting to a hardline attitude. These countries generally adopt a strategy of buying time for space, as the pressure the U.S. itself is under is unprecedented while it confronts the world over tariff issues.

This Wednesday, Federal Reserve Chairman Powell stated in his speech: "At present, we are fully capable of waiting for clearer signals before considering adjustments to our policy stance." The Federal Reserve has chosen a strategy of maintaining the status quo to respond to the changes brought about by the trade war, which has led to triple pressures in the stock market, bond market, and foreign exchange market returning to Washington.

In this context, the U.S. government has repeatedly called for interest rate cuts and has begun to consider more aggressive measures. However, before these actions achieve substantial breakthroughs, we are more inclined to believe that politics, the economy, and the market will operate along a rational path in the medium to long term.

Policies, Macroeconomic Finance and Economic Data

In terms of the trade war, the initial negotiations between the United States and Japan have not made substantive progress. On the contrary, the Japanese Prime Minister's public remarks before the talks were tough. After some countries took a hardline stance in retaliation, more countries, although still queuing up to negotiate with the United States, have also realized that the U.S. situation is not as advantageous as it claims.

Consumer confidence remains low, and the business community is confused about production plans. Without any support from the government or the Federal Reserve, Wall Street continues to sell off long positions and reduce trading.

In the four trading days of this week, the Nasdaq, S&P 500, and Dow Jones indices all experienced consecutive declines, recording weekly losses of 2.62%, 1.5%, and 1.33% respectively, with a significant downward trend in trading volume.

The bond market also performed poorly. The yield on the 2-year government bond continued to decline to 3.7580%, while the 10-year fell to 4.4960%, still at a high level. The risk in the bond market is mainly concentrated on long-term government bonds, and last week's surge of 11.25% indicates that liquidity is already in a critical state amid massive sell-offs.

The US Dollar Index has fallen for the fourth consecutive week, hitting a low of 99.171% this week. Funds are flowing from the US to Europe. The decline in the Dollar Index is a result of the stock market falling while the bond market has failed to absorb the outflow of funds. Capital outflow is the situation that the US is least willing to see.

Federal Reserve officials generally agree that the economy has not yet deteriorated, but tariffs will bring tremendous uncertainty to lowering inflation and economic development. The Federal Reserve will maintain a wait-and-see attitude until the situation becomes clearer.

The Federal Reserve's "hawkish" remarks have dispelled the market's fantasy about a possible emergency rate cut to support the economy. As of the weekend, CME FedWatch data shows that the probability of a rate cut in May has fallen to 14.4%. Currently, the market expects the Federal Reserve to possibly cut rates for the first time in June, with a probability of 70.2%, and a total of four rate cuts expected throughout the year.

Bitcoin On-Chain Data Analysis

This week, the on-chain selling pressure of Bitcoin continues to weaken, significantly decreasing compared to last week. The total on-chain selling scale dropped to 107810.75 coins, with short-term holders selling 103713.35 coins and long-term holders selling 4097.4 coins. The net outflow of Bitcoin from exchanges continues, reaching 19467.31 coins this week.

The long-term holders are still playing the role of stabilizers, with a net increase of nearly 100,000 Bitcoins this week. With the price rebound, the overall floating loss level of short-term holders has dropped to about 8%.

Capital Flow

In terms of capital flow, stablecoin channels achieved the highest weekly inflow scale since January, exceeding $950 million. The net inflow of funds into the Bitcoin ETF channel exceeded $10 million, and recent BTC performance has continued to outperform the Nasdaq index.

Market Cycle Indicators

According to the EMC BTC Cycle Metrics of eMerge Engine, the current value is 0.125, indicating that the market is in a rising continuation phase.