BTC weekly rise exceeds 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% over the week with a volatility of 12.73%. It has achieved three consecutive weeks of rebounds, and trading volume has increased. On Monday, it strongly broke through the 120-day moving average and thereafter traded above the average for the entire week, indicating a strong willingness to go long.

The U.S. government is conducting the second phase of trade negotiations. The White House continues to release positive signals, but the other party's response is vague, indicating that the outcome of the negotiations is still unclear.

Trump has made it clear that he will not remove Federal Reserve Chairman Powell, which alleviates market concerns about the independence of the Federal Reserve, leading to stabilization and rebound in the stock, bond, and currency markets.

Federal Reserve officials are signaling a loosening of policy. Cleveland Fed President Mester stated that the Fed could take swift action once conditions change. Fed Governor Waller also indicated that a severe deterioration in the job market could prompt the Fed to accelerate its rate-cutting pace.

Recently, the performance of the global market, especially the U.S. financial market, fully reflects the irrationality of trade frictions and their huge impact on the world economy. The measures taken by the Trump administration and the Federal Reserve to address market volatility confirm the judgment that "politics, economy, and market will operate along rational paths in the medium to long term."

However, the market rebound is mainly due to a temporary alleviation of concerns that trade frictions may trigger a recession. The subsequent trend will depend on whether trade negotiations can be reached in a timely manner and whether the U.S. economy is truly falling into recession. Therefore, the ongoing disclosure of U.S. stock first-quarter earnings reports is particularly important.

Policies, Macroeconomic Finance and Economic Data

The U.S. government stated that trade negotiations are making good progress, especially the talks with China are also actively underway. However, the Chinese side indicated that no substantial negotiations have taken place between the two parties.

Negotiations between Japan, South Korea, and the United States have progressed smoothly, which may provide a reference for other countries.

The US-China negotiations have not yet entered a substantive stage, which means that the second phase of trade talks has just begun, and there is still some distance to a significant breakthrough. This may limit the time and space for a market rebound.

Powell's speech this week focused on the impact of trade policy on inflation and the economy, setting the tone for the upcoming May interest rate meeting and reaffirming the independence of the Federal Reserve. He emphasized that policy will be data-driven and that interest rates will remain stable. Other Federal Reserve officials' remarks leaned more towards a dovish stance, suggesting a possible rate cut in June.

As of the weekend, the CME FedWatch tool shows a 62.7% probability of a rate cut in June, a decrease from the previous two weeks.

The Federal Reserve's Beige Book released on April 23 indicates that eight of the twelve Federal Reserve districts reported that economic activity was "essentially unchanged," with overall economic growth slowing. Businesses reacted strongly to tariff policies, with inflation expectations in several regions rising to 3.5% by 2025, and manufacturing activity contracting further. Consumer spending showed moderate growth, but high prices and tariff expectations began to undermine consumer confidence. Employment levels remained stable overall, but hiring activity weakened, with some regions reporting increased layoffs.

With the dovish statements from the government and the Federal Reserve, market panic has eased. The dollar index rebounded to 99.613 after falling to 97.991. The 2-year Treasury yield fell by 1.42% to 3.7560%, and the 10-year Treasury yield dropped by 2% to 4.245%. Risk assets performed better, with the Nasdaq, S&P 500, and Dow Jones indexes rising by 6.73%, 4.59%, and 2.48% respectively.

Gold saw a significant drop after reaching 3499.93 USD/oz at the beginning of the week, closing down for the week.

On-chain Data Analysis

With a significant rebound in prices, the on-chain selling scale has increased this week, mainly from short-term holders. The total on-chain selling volume for the week reached 197040.26 coins, 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 single-week net outflow in recent times. This has alleviated market selling pressure on one hand, while on the other hand, it reflects the high enthusiasm for market accumulation.

Long term holders increased their holdings by over 120,000 coins this week, while another group worth noting is the shark group (addresses holding 100-1000 BTC), which increased its holdings by nearly 30,000 coins in a single week.

Capital Flow

With the improvement of the policy environment, the inflow of funds into stablecoins and ETF channels this week has been significant, totaling nearly $7 billion. There were net inflows recorded on 6 out of 7 trading days, indicating that long term funds are getting on board in large amounts. However, as the BTC price rebounds to around $95,000, coupled with ongoing trade frictions and concerns over economic recession, even the most optimistic interest rate cuts will have to wait for a month, and market disagreements remain, making short-term fluctuations inevitable.

Cycle Indicator

According to eMerge Engine data, the EMC BTC Cycle Metrics indicator is 0.50, indicating that the market is in a rise continuation phase.