Crypto Market Weekly Report: BTC Consolidates at High Levels, Awaiting New Breakthrough

Since the low point in April, BTC has rebounded by as much as 50%, outperforming the Nasdaq index and reaching a new all-time high. However, the significant increase in the short term has also accumulated some selling pressure. Starting from May 22, there has been a large-scale sell-off in the BTC market, which has put certain pressure on BTC, which is at a high level and leading U.S. stocks, becoming a source of downward price momentum.

This Thursday, due to conflicts between specific individuals causing market panic, BTC fell to the support level of $100,000. Subsequently, the price continued to rebound, returning above the ascending trend line. Along with the adjustments in the U.S. stock market, the buying power in the BTC spot ETF channel has converged, making it difficult for BTC to absorb selling pressure and continue rising in the short term. It is worth noting that, with the price correction, the outflow scale from exchanges has also increased significantly this week, indicating that new funds are seizing the opportunity to absorb chips during the adjustment.

The positive news from the non-farm payroll data has created a favorable atmosphere for the stabilization and rebound of BTC. However, to truly break through to a new price level, greater progress may still be needed in areas such as trade tariffs, cryptocurrency policies, or Federal Reserve interest rate cuts.

Policies, Macroeconomic Finance, and Economic Data

The non-farm payroll data released by the United States this week showed an increase of 139,000 jobs in May, which is the lowest since February but slightly above the market expectation of 126,000. The unemployment rate in the U.S. remained at 4.2% in May, in line with expectations, with no deterioration. These data slightly exceeded expectations, pushing the three major U.S. stock indices up while gold fell.

Currently, market trading revolves around two main lines:

1. Judging whether the U.S. economy is experiencing a "soft landing," "hard landing," or falling into recession based on hard economic and employment data. The current market leans towards the expectation of a "soft landing," meaning that the economy gradually slows to a sustainable growth level while avoiding severe economic recession or mass unemployment. The current economic and employment data align with this characteristic; although GDP growth has declined, it is primarily due to the Federal Reserve's active cooling measures, inflation data is declining in an orderly manner, the unemployment rate remains stable, and the number of new jobs has not significantly decreased.

2. Make predictions about medium- to long-term economic and market changes that may be triggered by trade tariff policies and other government policies, and price in advance through proactive trading. The market crash in early March to April reflected concerns over unexpected tariff policies and the potential for inflation and worsening employment. The market rebound after April 7 was a forward pricing of an economic "soft landing," including expectations that the tariff policies would conclude relatively mildly, would not trigger severe inflation, would have limited impact on U.S. corporate profits, and an expectation of two 50 basis point rate cuts in the second half of this year.

However, the current market pricing may be overly optimistic. There are still many uncertainties regarding trade tariffs. Although recent conversations were held between the leaders of both sides, and representatives are expected to consult as soon as possible, there is still some distance to reach an agreement. Meanwhile, the increase in steel and aluminum tariffs by a certain country has also triggered threats of retaliation from other countries.

In addition, this week the market was also affected by the public opinion conflict between a certain entrepreneur and government officials. This incident led to the largest single-day drop in stock prices of related companies in history, and triggered a brief sharp decline in the US stock indices and BTC. However, this conflict is still considered an isolated incident and is expected not to have a long-term impact on market trends.

Overall, driven by slightly stronger-than-expected non-farm data and slow-moving trade negotiations, U.S. stocks, bonds, and the dollar maintained a fragile balance over the past week, with a slight tilt towards optimism.

crypto market

Since April, the rebound of BTC has outperformed the Nasdaq index. The US stock market is gaining momentum to challenge previous highs, while BTC reached a historic high on May 22.

From a technical indicator perspective, BTC underwent a two-week correction after reaching a new high. Last week, it retraced by 3.07%, and this week it has seen significant fluctuations with a slight increase of 0.08%. The weekly chart shows a long-legged doji pattern. During this adjustment process, trading volume has been in a state of contraction.

The maximum pullback in the last two weeks was around 10%, remaining above the previous low points, with the lowest point occurring this Thursday, which retested the upward trend line.

Considering that the US stock market has not yet hit a new high, it is foreseeable that BTC would experience such a correction after reaching a new high, which is also a healthy adjustment. Maintaining a certain period of fluctuation may be inevitable, and to break through to a new high and reach the next level, greater progress may be needed in areas such as trade tariffs, encryption currency policies, or the Federal Reserve's interest rate cuts.

Selling Pressure and Sell-off

Since April, BTC has rebounded from its low point, with a maximum increase of 50%. As the price reached a historical high, there was a certain degree of selling from both short-term bottom-fishing funds and long-term holding funds. This selling pressure peaked on May 22 and has gradually decreased since then.

It is noteworthy that as the sell-off decreases, the outflow of funds from centralized exchanges is increasing. This week, the outflow reached 76,520.72 BTC, far exceeding the usual outflow of 10,000 to 20,000 BTC per week. This large-scale outflow may indicate that long-term investors recognize the current price level.

Fund In and Out

After a phase of floating profits, even the funds in the ETF channel have shown signs of profit realization. In the past two weeks, there has been a slight outflow of funds from the BTC spot ETF channel, with last week's outflow at $135 million and this week's at $128 million. This outflow occurred against the backdrop of a significant rise in BTC and fluctuations in the US stock market.

Looking at it individually, it's hard to estimate when the capital in this channel will revert to net inflows. However, considering the overall trend of the US stock market, we believe that concerns over a significant decline may not be excessive. Although there is a technical possibility of a continued pullback to 100,000 USD, the difficulty in seizing this opportunity is considerable. In a fragile balance of supply and demand, a breakthrough rise may occur in a short period.

Cycle Indicator

According to a certain data platform, the BTC cycle indicator is 0.625, in an upward phase.