BTC continues to Rebound, Fed maintains PI stance

This week, the price of Bitcoin continued its upward trend, opening at $83733.07 and eventually closing at $85177.34, marking a weekly increase of 1.72%. Although it has achieved a rebound for two consecutive weeks, the market lacks sufficient upward momentum, and trading volume has significantly shrunk. Currently, BTC price has been operating outside the descending channel for the second consecutive week and is testing the 200-day moving average, a key technical indicator.

On a macro level, the U.S. tariff policy has entered the "negotiation" phase of its second stage. The preliminary negotiation results with Japan fell short of expectations, putting pressure on the Trump administration. Major target countries are taking a hardline stance, and secondary target countries are also shifting to a tough position. These countries are adopting a strategy of exchanging time for space, as the U.S. is waging a global war on tariffs while also bearing significant pressure itself.

On Wednesday, Fed Chairman Powell stated that they have the ability to wait for clearer signals before considering adjustments to their policy stance. The Fed's attitude of maintaining the status quo puts downward pressure on the stock market, bond market, and foreign exchange market. Trump has repeatedly urged for interest rate cuts and even considered removing Powell. However, before achieving substantial breakthroughs, politics, the economy, and the market may still operate along rational paths in the medium to long term.

In the context of low consumer confidence and difficult business planning, Wall Street continues to sell off long positions and reduce trading. The Nasdaq, S&P 500, and Dow Jones indices have all fallen consecutively this week, with declines of 2.62%, 1.5%, and 1.33% respectively, and trading volume has also declined significantly.

The bond market also performed poorly. The yields on 2-year and 10-year government bonds continued to decline, reaching 3.7580% and 4.4960%, respectively. Long-term government bonds face significant risks, with a surge of 11.25% last week indicating that liquidity is in a critical state amid massive sell-offs.

The US dollar index has achieved four consecutive weeks of decline, dropping to 99.171% this week. Funds are flowing from the US to Europe. The decline in the dollar index reflects the drop in the stock market while the bond market has failed to absorb the outflow of funds. The outflow of funds is the situation that the US is least willing to see.

Statements from Powell and other Fed officials are generally consistent: the economy has not yet deteriorated, but tariffs bring great uncertainty to inflation decline and economic development. The Fed will remain cautious until the situation becomes clearer. This dispels market fantasies about an emergency rate cut by the Fed. Currently, the market expects the Fed to cut rates for the first time in June, with a total of 4 rate cuts throughout the year.

In the cryptocurrency market, this week the on-chain selling pressure for Bitcoin continues to weaken. The total on-chain selling volume for the week has decreased to 107810.75 BTC, with short-term holders accounting for 103713.35 BTC and long-term holders for 4097.4 BTC. Bitcoin outflows from exchanges continue, reaching 19467.31 BTC this week. The long-term holder group continues to play a stabilizing role, with a net increase of nearly 100,000 BTC this week. With the price rebound, the overall floating loss level for short-term holders has decreased to around 8%.

In terms of capital flow, stablecoin channels achieved the highest weekly inflow since January, exceeding $950 million. The net inflow of funds through the ETF channel surpassed $10 million, and Bitcoin's recent performance has consistently outperformed the Nasdaq index.

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