Crypto Market Weekly Report: Economic data slightly exceeded expectations, but adjustment factors still exist.

This week, Bitcoin opened at $80708.21 and closed at $82562.57, with a weekly increase of 2.31%, a volatility of 10.86%, and a trading volume that continued to decline compared to last week. The price of Bitcoin operates within a descending channel, showing a slight rebound.

The CPI data released by the United States was slightly higher than expected, and there are signs that the Russia-Ukraine conflict may be coming to an end, which has provided a breather for the US stock market and the bitcoin market.

However, the valuation of the U.S. stock market is still in the process of declining, and historical data suggests there is still room for further decline. The reasons driving the drop in valuation—tariff policies that may trigger inflation, thus leading to concerns that the U.S. economy could fall into "stagflation"—have not yet been alleviated. The longer these concerns persist, the greater the potential for a downward adjustment in valuations. This is also why we hold a cautious attitude towards the short-term rebound of Bitcoin.

Macroeconomic Data

Last week, the employment data released by the United States showed that non-farm payrolls were slightly below expectations, and the unemployment rate rose slightly, indicating signs of a slowdown in the job market, which intensified expectations of a recession in the U.S. economy and led to a significant market decline.

This week, the United States released the latest CPI data. The unadjusted CPI for February rose 2.8% year-on-year, lower than the expected 2.9%; the seasonally adjusted CPI for February rose 0.2% month-on-month, lower than the expected 0.3%. These data eased the panic caused by last week's employment figures, allowing the market to catch its breath temporarily.

Under the impact of last week's sharp decline and this week's favorable CPI data, the US stock market has shifted from a deep drop to a slight rebound, but still shows a downward trend for the week. The Nasdaq index remains below the 250-day line, with a weekly decline narrowing to 2.43%; the S&P 500 index has rebounded above the 250-day line; the Dow Jones index has fallen by 3.07%, slightly rebounding to near the 250-day line.

On March 14, the University of Michigan announced that the preliminary consumer confidence index was 57.9, significantly below the market expectation of 63.1 and down from the previous value of 64.7. At the same time, the preliminary one-year inflation expectation rose to 4.9%, exceeding the anticipated 4.2%. This indicates that American consumers' concerns about the economic outlook are intensifying.

On Friday, global stock markets saw a significant rebound, mainly benefiting from news that the Russia-Ukraine conflict may ease, with both sides expected to reach a 30-day ceasefire agreement.

Currently, the US stock market has entered an adjustment phase, but the outlook for inflation and interest rate cuts remains unclear, especially as the impact of tariff policies has not yet been eliminated. The market may continue to correct downwards to adapt to the current economic environment. Influenced by ETFs, we believe Bitcoin will still be constrained by the adjustment in the US stock market. Although it has recently rebounded to around $83,000, it may drop to $73,000 within the next two months.

Crypto market capital flow

This week, the crypto market had a net inflow of $237 million, a significant decrease compared to last week. Specifically, Bitcoin spot ETFs had an outflow of $842 million, Ethereum spot ETFs saw an outflow of $184 million, and stablecoins experienced an inflow of $1.264 billion.

Despite the decrease in the inflow of stablecoins and the increase in ETF fund outflows, the existing funds entering the exchanges have converted into buying pressure, supporting the Bitcoin price to return to $83,000. Currently, the existing funds in the exchanges have slightly rebounded, but this may just be a bottom-fishing behavior by a small amount of capital, which is not enough to drive a full market reversal.

Market Sentiment and Position Analysis

Data shows that short-term investors are continuing to cut losses, with the largest losses occurring on March 13, although the scale is lower than that on March 10. Currently, short-term investors are averaging around 9% in losses, which includes a large number of ETF holders. This group has been both a driving force and the main bearers of losses in this round of decline, and may continue to face pressure in the future.

In contrast, the long-term investor group has shifted from reducing holdings to increasing them over the past three weeks, adding approximately 100,000 bitcoins. Another large investor group worth noting has also increased its holdings by nearly 60,000, with a cost below $80,000. In the long run, these two groups typically perform better and act as stabilizers in the market.

According to the market cycle indicators, the current Bitcoin market is in an upward continuation phase.