BTC fell 14.39% this week, marking the second largest weekly drop in this cycle.

This week, the opening price of Bitcoin was $94,265.47, and the closing price was $80,699.17, with a weekly fall of 14.39% and a volatility of 15.29%. Although the trading volume has decreased compared to last week, it remains high. The price of Bitcoin has fallen below the $89,000-$110,000 range, significantly retracing the previous gains.

In the past two weeks, the Bitcoin market has experienced significant volatility. On one hand, U.S. stocks began trading with expectations of an "economic recession," giving back most of their previous gains, resulting in the largest outflow since the establishment of Bitcoin spot ETFs. On the other hand, the U.S. has conveyed numerous positive messages regarding the regulation and application of crypto assets, including a state passing a state-level Bitcoin reserve bill, indicating that the application scenarios and policy environment for crypto assets in the U.S. are genuinely improving.

However, investor sentiment dominated the short-term price movements. Accompanied by a correction in the U.S. stock market, Bitcoin fell sharply by 14.39% this week, marking the second largest weekly drop in this cycle. Although it did not fall below the low point of February 28, it has broken through important support levels and the 200-day bull-bear dividing line. The Fear and Greed Index has fallen back to "Extreme Fear" at 20 points.

With the release of Friday's non-farm payroll data and the dovish remarks from the Federal Reserve Chairman, U.S. stock indices rebounded and temporarily stabilized. However, the short- to medium-term trend remains difficult to be optimistic about, and attention must still be paid to the trends in U.S. economic data. Bitcoin's performance will continue to be constrained by the performance of U.S. stocks, making it difficult to break out into an independent market.

Macroeconomic Financial and Economic Data

U.S. employment market data on Friday showed signs of slowing down. Non-farm payrolls in February increased by 151,000, slightly below market expectations. The unemployment rate unexpectedly rose from 4% to 4.1%, reaching a new high since November of last year.

The Chairman of the Federal Reserve subsequently stated that the current economic situation in the United States remains good, with a stable and balanced labor market. The Federal Reserve should remain cautious and does not need to rush to adjust the policy interest rates at this stage; it can patiently wait for the situation to become clearer. He also pointed out that the impact of changes in trade policy is being assessed, as these changes have exacerbated economic uncertainty.

Powell further stated that if the economy continues to remain robust and inflation does not further decline to the 2% target, the Federal Reserve may maintain the current benchmark interest rate. However, if the employment market unexpectedly weakens or inflation significantly decreases in the future, the Federal Reserve will consider resuming interest rate cuts.

Based on signs of weakening economic data and adjustments in the US stock market, the market bets that the Federal Reserve will cut interest rates 3 times this year, about 75 basis points.

As a result, the US dollar index fell by 3.52% for the week, closing at 103.882. The Nasdaq rebounded on Friday, breaking through the annual line and closing above it, while the S&P 500 broke through the 200-day line and closed above it. The 2-year US Treasury yield saw a slight increase, while the 10-year Treasury rose by more than 1.89%.

The non-farm data on Friday improved traders' previously lowered expectations slightly. However, concerns about a recession or stagflation in the U.S. economy have not been eliminated; at most, it is a correction to the previous significant downward pricing. Whether the rebound in U.S. stocks and Bitcoin can be sustained requires further observation, and whether it can bottom out and reverse needs more economic data guidance.

Technical Analysis

Compared to the US stock market, Bitcoin has maintained a relatively strong trend, and its current price is still about 15% higher than the high point in early November last year.

Technically, the trend of Bitcoin remains difficult to be optimistic about. The price is operating below the first trend line of the bull market. Moreover, since the historical high on January 21, Bitcoin has formed a descending channel, which has suppressed several rebounds of Bitcoin.

On Sunday evening, bears attacked the market again, and Bitcoin fell sharply below the 200-day moving average. This adjustment's intensity and weak performance are similar to the market performance from July to September 2024. The market is currently in an extremely oversold state in the short term, but recovering from the downturn may require more external conditions and time to achieve.

Selling Pressure and Sell-off

After the panic selling triggered by last week's breakout, the selling pressure has significantly decreased this week. A total of 147,351 units were sold by both long and short positions, dropping to the previous normal level. However, the exchange inventory has increased by over 5,000 units, indicating that while selling pressure has decreased, buying strength is still insufficient.

According to on-chain data, the overall floating profit rate of the market is 198%, with long positions at 347% and short positions at a floating loss of 6%. Short positions continue to be under pressure. In a bull market, being in a floating loss with short positions is often a good opportunity for medium-term entry.

Stablecoins and Bitcoin Spot ETF

Compared to last week, there was a net outflow of 4.081 billion funds from the dual-channel system. This week, the high pressure from trial production has eased to some extent, with a total inflow of 1.295 billion USD, including an inflow of 210.7 million in stablecoins. The Bitcoin spot ETF saw an outflow of 719 million USD, and the outflow from the Bitcoin spot ETF channel is the source of selling pressure that led to the market fall.

In February, 11 Bitcoin spot ETFs in the United States experienced the largest outflow since their approval, totaling $2.3 billion. As March began, the outflows continued but at a reduced scale. The outflow group includes retail and institutional sell-offs, as well as the liquidation of CME contract arbitrage traders. From a transmission perspective, for Bitcoin prices to stabilize, the U.S. stock market needs to stabilize, and ETF holders need to shift from net outflows to net inflows.

Cycle Indicator

According to the data engine, the Bitcoin cycle indicator is 0.375, and the market is in a rising continuation phase.