BTC has fallen near the annual line, and the market expects the probability of a rate cut in June to exceed 90%

This week, the opening price of Bitcoin was $82,379.98, and the closing price was $78,370.75, with a decline of 4.87% for the week and a volatility of 13.92%. The trading volume increased significantly. Bitcoin's price is operating in a downward channel and fell below the channel's upper edge over the weekend due to U.S. factors. It is currently stabilizing temporarily near the yearly line (365-day moving average).

On April 2, the President of the United States announced the implementation of an unexpected "reciprocal tariff" policy, causing global shock. Subsequently, the Chinese government announced corresponding countermeasures. This news led to turmoil in the capital markets, with the three major U.S. stock indices experiencing significant declines this week in response to the impact of the "reciprocal tariff." Both short-term and long-term U.S. Treasury yields have significantly decreased.

The impact of "reciprocal tariffs" has overshadowed all other news, with the market busy selling off assets and pricing down this unexpected policy. Currently, global capital markets are undergoing severe adjustments and repricing, with the greatest uncertainty stemming from the subsequent responses of the U.S. President and the Federal Reserve.

Macroeconomic and Financial Data

On April 2, the President of the United States signed an executive order announcing the implementation of "reciprocal tariffs" on global trade partners, establishing a minimum baseline tariff of 10% and imposing higher tax rates on certain countries. The baseline tariff will take effect on April 5, and the high tariff measures will take effect on April 9, 2025.

The U.S. Treasury Secretary urged countries to exercise restraint and stated that this will be the limit if there is no counteraction.

On April 3, China responded firmly, announcing a 34% tariff on all imported goods originating from the United States, effective from April 9.

Although some small economies choose to back down, the EU and the UK are expected to continue taking certain countermeasures.

Due to policies far exceeding expectations, the three major U.S. stock indexes plunged rapidly on Thursday and Friday, pricing this in. The Nasdaq, S&P 500, and Dow Jones indexes fell by 10.02%, 9.08%, and 7.86% respectively over the week. Technology companies directly affected by "reciprocal tariffs" experienced even larger declines in stock prices. Throughout the week, the market capitalization of U.S. stocks evaporated by over $5 trillion.

The U.S. non-farm payroll employment data for March, released on April 4, showed an increase of 228,000 jobs, far exceeding market expectations. The unemployment rate rose slightly to 4.2%, slightly higher than the market expectation of 4.1%. The Federal Reserve Chairman stated in a speech that the U.S. economy remains strong, but tariffs will weigh on the economy and inflation. His remarks were considered quite hawkish.

The U.S. President urged the Federal Reserve to cut interest rates as soon as possible on social media. As of the weekend, market expectations for the number of rate cuts this year have risen to 4, with the probability of a rate cut in June exceeding 90%.

The tariff conflict may continue, but the worst period may be behind us. The market needs to gradually confirm whether the pricing is adequate and if worse situations may arise in the future. More importantly, is there a possibility of "taxes promoting negotiations," and what will be the final outcome of the negotiations between the United States and various countries?

Capital Flow

The cryptocurrency market saw a capital outflow of $333 million this week, with $178 million leaving Bitcoin spot ETFs and $108 million leaving stablecoins. This breaks the previous trend of four consecutive weeks of net capital inflow.

Considering the severe fluctuations in US stocks, this scale of outflow is not considered serious, but we still need to be alert to possible subsequent sell-offs.

Selling Pressure and Sell-off

With the volatility in the US stock market, selling pressure in the market has slightly increased. On-chain data shows that the number of Bitcoins flowing into exchanges has reached 188,614.7 coins, with short-term holders intensifying their sell-off, while the sell-off by long-term holders has slightly decreased compared to last week. The data indicates that after three consecutive weeks of outflows, the number of Bitcoins held by centralized exchanges increased by 3,116.1 coins this week, suggesting that selling pressure has accumulated.

Since late February, the majority of short-term holders have been in a state of unrealized losses for most of the time, with the recent proportion of unrealized losses reaching 16%, setting a new record for the largest unrealized loss in this cycle. The short-term holder group is still under immense pressure, and the collapse of this group could lead to further price declines.

Long-term holders continue to play a stabilizing role in the market, increasing their holdings by 53,300 BTC this week.

Unless the US stock market rebounds or the Federal Reserve introduces stimulus policies such as interest rate cuts, the buying power is unlikely to significantly increase, and the market will struggle to gain upward momentum.

Cycle Indicators

According to a data platform, the Bitcoin cycle indicator is 0.375, indicating that the market is in an upward continuation phase.