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

This week, Bitcoin opened at $85177.33 and closed at $93780.57, rising 10.10% for the week, with a volatility of 12.73%. This marks three consecutive weeks of rebounds, and trading volume has increased. On Monday, it strongly broke through the 120-day moving average, and thereafter, it operated above the moving average for the entire week, indicating a strong willingness to go long.

The U.S. government's foreign trade policy has entered the "negotiation" process of the second phase. The White House continues to release positive signals, while the other side's attitude remains ambiguous, indicating that the negotiation results are still unclear.

The U.S. President has made it clear that he will not dismiss the Chairman of the Federal Reserve, which has alleviated 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 are sending signals of easing. One Fed chair stated that the Federal Reserve has the ability to act quickly once circumstances change. Another official mentioned that if the labor market deteriorates severely, it could prompt the Federal Reserve to push for rate cuts faster and more aggressively.

Recently, the performance of global markets, especially the U.S. financial markets, fully reflects the irrationality of trade policies and the significant impact on the global economy. The compromise measures taken by the U.S. government and the Federal Reserve to respond to financial market fluctuations confirm the view that "politics, economics, and markets operate along rational paths in the medium to long term."

However, the market rebound is mainly due to the temporary alleviation of concerns that trade policies may trigger an economic recession. The future market trend will depend on whether trade negotiations can be reached in a timely manner and whether the U.S. economy is truly entering a recession. Based on this judgment, the first quarter earnings reports of U.S. stocks are particularly important.

Policies, Macroeconomic Finance and Economic Data

Senior officials of the U.S. government stated that trade negotiations are making good progress, particularly the negotiations with China are also actively underway. However, the Chinese government has directly stated that the two sides have not engaged in negotiations.

Currently, the countries that are indeed in negotiations include Japan and South Korea. The probability of these two countries reaching conditions favorable to the United States is relatively high, and their level of concessions will serve as a model for other countries.

However, there are no signs that the truly tricky US-China negotiations have entered a substantive consultation stage. Therefore, the second phase of trade policy has just begun, and there is still a considerable distance to achieving significant progress. This determines that the time and space for a market rebound are limited, and optimism in the short term is difficult to express.

This week, the Federal Reserve Chairman's speech focused on the inflation and economic uncertainty brought about by trade policies, setting the tone for the upcoming May interest rate meeting, and reaffirming the independence of the Federal Reserve. He reiterated his consistent stance – data-driven policy, maintaining stable interest rates. He will not succumb to political pressure to cut interest rates but suggested that if inflation or employment data changes significantly, policy adjustments may occur. Other Federal Reserve 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 significantly decreased compared to the past two weeks.

The Federal Reserve's Beige Book published on April 23 shows that out of the 12 Federal Reserve districts, 8 reported that economic activity "remained largely unchanged," indicating a slowdown in overall economic growth. Only a few districts reported slight growth, while some reflected a deterioration in economic outlook. Businesses reacted strongly to trade policies, with inflation expectations in several regions rising to 3.5% for 2025. Manufacturing activity further contracted, with the manufacturing PMI dropping to 48.5. Consumer spending grew moderately, but high prices and tariff expectations began to weaken consumer confidence. Retailers reported excess inventory, especially for imported goods, with sales growth falling short of expectations. Employment levels remained generally stable, but hiring activity weakened, with some regions reporting increased layoffs, particularly in retail and manufacturing. Wage growth slowed but remained above pre-pandemic levels, and labor shortages persisted in the tech sector and for high-skilled positions.

The content of the beige book indicates that the negative impacts of trade policies are becoming apparent, but the extent is still unclear.

With the moderate statements from the government and the Federal Reserve, the extreme panic in the market has eased. The U.S. 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 dropped by 2% to the neutral zone of 4.245%. Risk assets performed even better, with the Nasdaq, S&P 500, and Dow Jones rising by 6.73%, 4.59%, and 2.48% respectively.

Gold prices peaked at $3499.93 per ounce at the beginning of the week, but then dropped sharply and turned lower during the week.

Selling Pressure and Sell-off

With a significant price rebound, the on-chain sell-off scale has increased this week, mainly from short-term holders. The total on-chain sell-off for the week rose to 197040.26 BTC, with short-term holders accounting for 190568.61 BTC and long-term holders for 6471.65 BTC. The net outflow from exchanges surged to 62696.12 BTC, marking the largest net outflow week since this cycle. This outflow has alleviated market selling pressure while also demonstrating strong enthusiasm for market accumulation.

Long term holders increased their holdings by over 120,000 this week, and another noteworthy group of long positions is the cluster of addresses holding between 100 and 1,000 BTC, which saw an increase of nearly 30,000 in a single week.

Capital In and Out

As the Federal Reserve and government policies become more rational, there has been a significant inflow of funds into stablecoins and ETF channels this week, totaling nearly $7 billion.

In 7 trading days, 6 trading days recorded net inflows, showing that long term funds are very actively getting on board to grab shares. However, it is important to note that as the price of Bitcoin rebounds to around $95,000, coupled with ongoing trade conflicts and concerns about economic recession, and the most optimistic interest rate cuts still a month away, market divergences still exist, making short-term fluctuations inevitable.

Cycle Indicators

According to a certain indicator, the Bitcoin cycle indicator is 0.50, and the market is in a rising continuation phase.