BTC weekly rise over 10%, nearly 7 billion US dollars long term funds get on board

This week, BTC opened at $85,177.33 and closed at $93,780.57, rising 10.10% for the week, with a volatility of 12.73%, achieving three consecutive weeks of rebound, and the trading volume has increased. On Monday, it surged strongly past the 120 moving average, and thereafter, it operated above the moving average for the whole week, indicating a strong willingness to go long.

The "reciprocal tariff battle" of the US government has entered the second phase of "negotiation". The government side continuously releases signals of good progress, but the other side remains silent, indicating that the outcome of the negotiations is still unclear.

The U.S. President has clearly stated that he will not dismiss the Federal Reserve Chairman, which alleviates market concerns about the independence of the Federal Reserve, leading to a stabilization and rebound in the stock, bond, and currency markets.

Federal Reserve officials have released positive signals. One Fed chair stated that the Federal Reserve has the ability to act quickly if circumstances change. Another Fed governor mentioned that a significant downturn in the job market could prompt the Federal Reserve to lower interest rates more quickly and more significantly.

Recent performances in the global market, particularly in the U.S. financial markets, fully demonstrate the irrationality of the "reciprocal tariff war" and its huge impact on the world economy. The compromises made by the government and the Federal Reserve in response to the "triple kill" of stocks, bonds, and currencies confirm the view that "politics, economics, and markets primarily operate along rational paths in the medium to long term."

However, the market rebound only temporarily alleviated concerns about the "tit-for-tat tariff war" potentially triggering a market crash and economic recession. The subsequent trend will depend on whether the "tit-for-tat tariff war" can be concluded in a timely manner, as well as whether the U.S. economy truly falls into recession. Based on this judgment, the Q1 earnings reports for U.S. stocks are particularly important.

Policy, Macroeconomic Finance and Economic Data

The U.S. government stated that the tariff war is making good progress, especially that negotiations with China are actively underway. However, the Chinese government stated that no negotiations have taken place between the two sides.

Currently, the countries that are truly in negotiation include Japan and South Korea, and the probability of these two countries reaching terms favorable to the United States is relatively high. Their "concessions" will also set an example for other countries.

However, there are no signs that the US-China negotiations have entered a substantive consultation stage. Therefore, the second phase of the "reciprocal tariff war" has just begun, and there is still a long way to go before significant progress is made. This limits the time and space for a market rebound, making it difficult to be optimistic in the short term.

The Federal Reserve Chairman's remarks this week 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 independence of the Federal Reserve. He emphasized a data-driven approach to policy, maintaining stable interest rates, and will not succumb to political pressure to cut rates, but hinted that policy adjustments could occur if there are significant changes in inflation or employment data. Other Federal Reserve officials' comments have emphasized a more "dovish" stance, indicating the possibility of a 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 significantly declined compared to the past two weeks.

The Federal Reserve's Beige Book released on April 23 shows that 8 of the 12 Federal Reserve districts reported "no significant change" in economic activity, with overall economic growth slowing. Only a few districts reported slight growth, while some reflected a deterioration in economic outlook. Businesses reacted strongly to tariff policies, with inflation expectations rising to 3.5% in multiple districts by 2025. Manufacturing activity further contracted, with the manufacturing PMI falling to 48.5. Consumer spending grew modestly, but high prices and tariff expectations began to undermine consumer confidence. Retailers reported inventory backlogs, particularly for imported goods, with sales growth falling short of expectations. Employment levels remained generally stable, but hiring activity weakened, with some districts reporting increased layoffs, especially in retail and manufacturing. Wage growth slowed, but remained above pre-pandemic levels, and labor shortages in the tech sector and high-skill positions persisted.

The content of the brown book indicates that the negative impact of tariffs is becoming apparent, but the extent is still unclear.

With the dovish statements from the government and the Federal Reserve, market panic has eased significantly. The dollar index rebounded to 99.613 after dropping to 97.991. The 2-year Treasury yield fell by 1.42% to 3.7560%, while the 10-year Treasury yield decreased by 2% to the neutral zone of 4.245%. Risk markets performed even better, with the Nasdaq, S&P 500, and Dow Jones rebounding by 6.73%, 4.59%, and 2.48% respectively.

Gold rose to $3499.93 per ounce at the beginning of the week, but then fell sharply for two days, ending the week down.

Selling Pressure and Selling

Accompanied by a significant price rebound, the on-chain selling scale has increased this week, mainly from short-term holders. The total on-chain selling scale rose to 197040.26 coins for the week, of which short-term holders accounted for 190568.61 coins and long-term holders for 6471.65 coins. The net outflow from exchanges surged to 62696.12 coins, marking the largest net outflow week since this cycle. This has alleviated market selling pressure on one hand, while on the other hand, it shows strong enthusiasm for market accumulation.

Long-term holders increased their holdings by more than 120,000 this week, while another group worth noting that is going long is the shark group (addresses holding BTC between 100 and 1000), which saw an increase of nearly 30,000 in a single week.

Capital In and Out

With the Federal Reserve and the government returning to rationality, the inflow of funds into stablecoins and ETF channels this week has明显, totaling nearly $7 billion.

In 7 trading days, 6 trading days recorded net inflows, showing that long term funds are aggressively getting on board. However, it is necessary to note that as the BTC price rebounds to around 95,000 USD, and with the ongoing tariff war conflicts and doubts about economic recession, as well as the most optimistic interest rate cuts being at least a month away, market divergences still exist, and short-term fluctuations are inevitable.

Cycle Indicator

According to relevant indicators, the BTC cycle indicator is 0.50, and the market is in a rising continuation phase.