Crypto Assets Market Weekly Report: Bitcoin Maintains Rebound Momentum, US Dollar Index Hits Three-Year Low

This week, Bitcoin (BTC) continued the rebound momentum from last week, rising 1.72% throughout the week and closing at $85177.34. Nevertheless, there is a lack of confidence in the market to push higher, and trading volume has significantly shrunk. The BTC price has been outside the descending channel for the second consecutive week and is testing the important technical indicator of the 200-day moving average.

In terms of the global economic situation, the U.S. government's "reciprocal tariff war" has entered the second phase of "negotiations." The results of preliminary negotiations with Japan were below expectations, putting the U.S. government in a difficult position. Major target countries are responding firmly, while minor target countries are adopting a tougher stance; it seems that all countries are employing a strategy of trading time for space. In fact, when the U.S. declares war on tariffs against the world, it is also facing unprecedented pressure.

Federal Reserve Chairman Powell delivered a speech this Wednesday, stating that the Fed has the ability to wait for clearer information before considering adjustments to its policy stance. This "hawkish" position has put pressure on the stock, bond, and foreign exchange markets. A certain political figure urged for interest rate cuts three times in one day and began to consider removing Powell. However, before any real breakthroughs are made in this action, it is expected that politics, economics, and the markets will continue to operate along rational paths in the medium to long term.

In terms of the macro economy, consumer confidence remains low, and businesses are confused about production plans. Wall Street continues to sell off long positions and reduce trading without waiting for assistance from the government or the Federal Reserve. In the four trading days this week, all three major stock indices have fallen consecutively, and trading volume has shown a significant decline.

The bond market also performed poorly. The yields on 2-year and 10-year government bonds have both fallen, but remain at high levels. The risks facing long-term government bonds are more pronounced, as last week’s surge of 11.25% indicates that liquidity is in a critical situation amidst significant sell-offs.

The US dollar index has fallen for the fourth consecutive week, dropping to 99.171% this week. Funds are flowing from the US to Europe, which is the situation the US least wants to see. The decline in the dollar index reflects the result of a drop in the stock market while the bond market has failed to absorb the outflow of funds.

The statements from Federal Reserve officials are generally consistent, indicating that the economy has not yet deteriorated, but tariffs will bring significant uncertainty to the decline in inflation and economic development. The Federal Reserve will adopt a wait-and-see approach until the situation becomes clearer. Market expectations for a rate cut by the Federal Reserve have also been adjusted, currently leaning towards the first rate cut in June, with a possibility of four cuts throughout the year.

In the Crypto Assets market, the on-chain sell pressure of Bitcoin continued to weaken this week, with the total on-chain selling volume dropping to 107810.75 coins. Exchange outflows continued, reaching 19467.31 coins. The long-term holders group is still acting as a stabilizer, increasing their holdings by nearly 100,000 coins this week. The overall floating loss level of the short-term holders group is close to 8%.

In terms of capital flow, the stablecoin channel achieved the highest weekly inflow scale since January, exceeding $950 million. A certain data platform's BTC cycle indicator is 0.125, indicating that the market is in a rising continuation phase.

Overall, despite the uncertainty in the external environment, the Bitcoin market remains relatively stable and shows a certain rebound trend. However, market participants still need to closely monitor changes in the global economic situation and regulatory policies to make informed investment decisions.