Crypto Assets Market Weekly Report: Bitcoin Consolidates at High Levels, Waiting for Breakout Opportunity

In the past month, Bitcoin ( BTC ) price has rebounded by up to 50% from the April low, outperforming the Nasdaq index and setting a new historical high. However, the significant rise in the short term has also accumulated certain selling pressure. Since May 22, large-scale sell-offs have occurred in the BTC market, which has put pressure on BTC that is at a high position and leading the US stock market, becoming an important factor in the price decline.

This Thursday, due to market concerns over conflicts between certain political figures, the BTC price dipped to the support level of 100,000 dollars. Subsequently, the price rebounded continuously, returning above the main uptrend line.

With the adjustment of the US stock market, the buying power of the BTC spot ETF has weakened, making it difficult for BTC to digest selling pressure and continue to rise in the short term. Notably, with the price correction, the outflow from exchanges has also significantly increased this week, indicating that new funds are taking advantage of the adjustment opportunity to absorb chips.

The recently released non-farm employment data has created a favorable atmosphere for BTC's stabilization and rebound, but breaking through a new price range may still require greater progress in trade policies, encryption regulation, or Federal Reserve interest rate cuts.

Macroeconomic and Policy Environment

In May, the number of jobs in the United States increased by 139,000, which is the lowest since February, but slightly higher than the market expectation of 126,000. The unemployment rate in May remained at 4.2%, in line with expectations. These data were slightly better than expected, driving the three major U.S. stock indices up and gold down.

Currently, the market's expectations for the U.S. economy are close to a "soft landing", meaning that economic growth will slow down but will not fall into a severe recession or mass unemployment. The latest economic and employment data align with this characteristic. Although GDP growth has declined, it is mainly due to the Federal Reserve's proactive cooling measures. Inflation data is decreasing in an orderly manner, the unemployment rate remains stable, and the number of new jobs has not significantly decreased. This also means that the timing for the Federal Reserve to cut interest rates may be delayed.

In terms of trade policy, although the leaders of the relevant countries have had their first phone call, they are still in the negotiation stage and there is still some distance to reach an agreement. One country has raised steel and aluminum tariffs from 25% to 50%, which has also triggered retaliatory threats from other countries.

This week, the market was also affected by a public opinion conflict between the CEO of a technology company and political figures, leading to the largest single-day drop in related stocks in history, and causing a brief sharp decline in stock indices and BTC. However, this conflict is currently seen as an isolated incident and is not expected to have a long-term impact on market trends.

Overall, against the backdrop of employment data slightly better than expected and slow progress in trade negotiations, the stock market, bond market, and US dollar have maintained a fragile balance over the past week, tilting slightly towards an optimistic direction.

Crypto Assets Market Analysis

BTC has been leading the way in the rebound since April compared to the Nasdaq index. The US stock market is gaining momentum to challenge previous highs, while BTC reached a historical 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%, while this week it experienced significant fluctuations with a slight increase of 0.08%. The weekly chart presents a long-tailed doji pattern. During this adjustment period, trading volume has been in a state of contraction.

The maximum pullback in the past two weeks is about 10%, and overall it is still operating above important support levels. The lowest point occurred this Thursday, bouncing back to near the main upward trend line.

Considering that the US stock market has not yet broken through new highs, it is foreseeable that BTC would experience such an adjustment after reaching a new high, which is also a healthy trend. In the short term, it may continue to maintain a certain period of volatility. To break through new highs and reach another level, it may require greater progress in trade policies, Crypto Assets regulation, or the Federal Reserve's interest rate cuts.

Market Supply and Demand Analysis

Since April, BTC has rebounded from its low point with a maximum increase of 50%. As the price reached a historic high, both short-term speculators and long-term holders began to take profits to some extent. This selling pressure peaked on May 22 and has gradually weakened since then.

It is worth noting that, alongside the weakening selling pressure, the outflow of BTC from centralized exchanges is increasing. This week, the outflow reached 76,520.72 coins, far exceeding the usual weekly outflow level of 10,000 to 20,000 coins. Such a large outflow may indicate that long-term investors have a higher recognition of the current price level.

Capital Flow Analysis

After the BTC price experienced a phase of increase, there have been some signs of profit-taking even from the funds that entered through the ETF channels.

In the past two weeks, BTC spot ETFs have seen a slight outflow of funds, with $135 million flowing out last week and $128 million this week. This outflow occurred against the backdrop of a significant rise in BTC and fluctuations in the US stock market.

Looking at it alone, it's hard to predict when the funds from this channel will revert to net inflows. However, considering the overall trend of the US stock market, we believe there is no need to overly worry about the risk of a significant decline. Although there is a technical possibility of revisiting $100,000, timing the market is quite difficult. With supply and demand maintaining a fragile balance, a breakout rally could suddenly occur in the short term.

Cycle Indicators

According to eMerge Engine data, the EMC BTC cycle indicator is currently 0.625 and is in an upward phase.