Crypto Assets Weekly Market Review: Bitcoin Consolidates at High Levels, Awaiting Breakthrough Opportunity

Since the low point in April, Bitcoin has rebounded by as much as 50%, outperforming the Nasdaq index and reaching a new all-time high.

However, the significant rise in the short term has accumulated some selling pressure. Since May 22, a large-scale sell-off has begun in the Bitcoin market. This has created some pressure on Bitcoin, which is at a high position and leading the US stock market, becoming a driving force for the price decline.

This Thursday, due to market panic triggered by specific events, Bitcoin dropped to the support level of 100,000 USD. Subsequently, the price continued to rebound, returning above the upward trend line.

With the adjustment of the US stock market, the buying power of the Bitcoin spot ETF channel has converged, making it difficult to absorb selling pressure and continue to rise 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 taking the opportunity of the adjustment to absorb chips.

The positive news from non-farm payroll data has created a good atmosphere for the stabilization and rebound of Bitcoin. However, to break through to a new price level, greater progress may still be needed in areas such as tariff policies, encryption regulations, or the Federal Reserve's interest rate cuts.

Policies, Macroeconomic Finance and Economic Data

This week's non-farm employment data released by the United States shows that the number of jobs increased by 139,000 in May. Although this is the lowest since February, it is slightly higher than the market expectation of 126,000. The unemployment rate in the United States remained at 4.2% in May, consistent with expectations and previous values, with no deterioration.

Data performance slightly exceeded expectations, driving the three major U.S. stock indices up, while gold fell.

Currently, market trading revolves around two main lines:

1. Judging the U.S. economy as a "soft landing", "hard landing", or falling into recession based on economic and employment hard data. The current market leans towards a "soft landing" expectation, meaning the economy gradually slows to a sustainable growth level after experiencing rapid growth and high inflation, while avoiding severe recession or mass unemployment. The current economic and employment data align with this characteristic, with GDP growth slowing due to the Federal Reserve's proactive cooling measures, inflation decreasing in an orderly manner, the unemployment rate remaining stable, and new job additions not significantly decreasing. This also suggests that the Federal Reserve's interest rate cuts may be delayed.

2. Anticipate the medium to long-term economic and market changes that may be triggered by tariff policies and other government policies, and pre-price through forward-looking trading. The market crash in early March to April reflected concerns over unexpected tariff policies and the potential inflation and employment deterioration they could cause, while the rebound after April 7 was an optimistic expectation of an economic "soft landing." This forward pricing includes a relatively mild conclusion to tariff policies, which will not lead to a deterioration of inflation in the US, limited impact on corporate earnings, and expectations of two 50 basis point rate cuts in the second half of this year.

However, there are still many uncertainties regarding tariff policies. Although the leaders of the United States and China had their first call and agreed that representatives would consult in the UK, the negotiations are still ongoing, and it will take time to reach an agreement. Meanwhile, as a certain country raised steel and aluminum tariffs to 50%, the Canadian government has also threatened to take retaliatory measures.

In addition, the market this week was also affected by the criticism of the "Beautiful Big Bill" by the CEO of a certain technology company and the public opinion conflict with political figures. This controversy led to the largest single-day drop in stock prices of related companies in history and triggered a brief sharp decline in U.S. stock indices and Bitcoin. However, this conflict is currently still an isolated incident and is expected not to have a long-term impact on market trends.

Overall, driven by slightly better-than-expected non-farm data and slow progress in tariff negotiations, US stocks, US bonds, and the US dollar maintained a fragile balance over the past week, with a slight tilt towards optimism.

Crypto Assets Market

Since April, Bitcoin's performance has led the Nasdaq index during the rebound. The US stock market is gaining momentum to challenge previous highs, while Bitcoin reached an all-time high on May 22.

From the perspective of technical indicators, Bitcoin has undergone a two-week correction after reaching a new high. Last week it retraced by 3.07%, and this week it experienced significant fluctuations, rising slightly by 0.08%. The weekly chart shows a long-legged doji pattern. During the adjustment period, the trading volume has been in a state of contraction.

The maximum pullback over the past two weeks is about 10%, maintaining overall above the previous low points, with this Thursday's lowest point testing the rising trend line.

In the context where the US stock market has not yet hit new highs, this adjustment of Bitcoin after reaching a new high is foreseeable and normal. It is inevitable to maintain a certain period of fluctuations; to break through to new highs and reach a new level, greater progress may be needed in tariff policies, encryption currency regulation, or Federal Reserve interest rate cuts.

Selling Pressure and Sell-off

Since April, Bitcoin has rebounded from its low point with a maximum increase of 50%.

With the historical new high reached, both short-term bottom-fishing funds and long-term funds have seen a certain degree of profit-taking. This selling pressure peaked on May 22 and has gradually decreased since then.

It is worth noting that as the sell-off decreases, the outflow from centralized exchanges is increasing. This week, the outflow reached 76,520.72 coins, far exceeding the usual weekly outflow of 10,000 to 20,000 coins. This significant outflow can be seen as a recognition of the current price by long-term investors.

Capital In and Out

Even the funds in the ETF channel have experienced profit-taking.

In the past two weeks, there has been a slight outflow of funds from the Bitcoin spot ETF channel, with 135 million last week and 128 million this week. This outflow occurred against the backdrop of a significant rise in Bitcoin and fluctuations in the US stock market.

Looking at it individually, it is difficult to estimate when this channel's funds will return to an inflow state. However, considering the overall trend of the US stock market, we believe there is no need to worry excessively about a significant decline. Although technically there is a possibility of continuing to test the $100,000 mark, it is quite challenging to grasp. In a fragile balance of supply and demand, a breakout rise may occur in a short period.

Cycle Indicators

According to a certain indicator, the Bitcoin cycle indicator is 0.625, in an upward phase.