BTC extended its upward momentum, with the U.S. dollar index hitting a three-year low

This week, the price of bitcoin opened from $83,733.07 to close at $85,177.34, up 1.72% for the week, with an amplitude of 4.06%. This is the second consecutive week that Bitcoin has rebounded, but the market is not confident and the trading volume has shrunk significantly. For the second week in a row, the price of bitcoin is trading outside the descending channel and is testing the 200-day moving average, an important technical indicator.

The U.S. equal tariff policy has entered the "negotiation" phase of its second stage. The results of preliminary negotiations with Japan fell short of expectations, putting the U.S. government in a difficult position. Major target countries have responded strongly, while secondary target countries have hardened their stance, clearly adopting a strategy of buying time. In fact, when the U.S. declared war on the world regarding tariffs, it also faced unprecedented pressure itself.

Federal Reserve Chairman Powell delivered a speech this Wednesday, stating that the Fed has the ability to wait for clearer information before considering adjustments to its policy stance. The Fed's approach of maintaining a steady course has shifted pressure back onto the U.S. government in the stock, bond, and foreign exchange markets.

Before the Federal Reserve takes actual action, we tend to believe that politics, economics, and the market will operate along rational paths in the medium to long term.

Policies, Macroeconomic Finance and Economic Data

In the preliminary negotiations with Japan, the United States did not make substantial progress. Although more countries are still negotiating with the United States, they also realize that the U.S. situation is not as favorable as it claims.

Consumer confidence continues to be low, and businesses are confused about production plans. Wall Street continues to sell off long positions and reduce trading without waiting for government or Federal Reserve assistance.

In the four trading days this week, the Nasdaq, S&P 500 and Dow Jones all fell in a row, recording weekly declines of 2.62%, 1.5% and 1.33%, respectively, and the trading volume fell significantly.

The bond market also underperformed. The yield on the 2-year Treasury note continued to fall to 3.7580%, and the 10-year yield fell to 4.4960%, which is still at a high level. Bond market risks are mainly concentrated in long-term Treasuries, which surged 11.25% last week, indicating that liquidity has become critical amid a sharp sell-off.

The US dollar index has fallen for four consecutive weeks, dropping to 99.171% this week. Funds are flowing from the US to Europe. The decline in the dollar index reflects the drop in the stock market while the bond market has failed to absorb the outflow of funds. Fund outflow is the situation that the US is least willing to see.

Federal Reserve officials generally agreed that the economy has not yet deteriorated, and tariffs will bring significant uncertainty to reducing inflation and economic development. The Federal Reserve will maintain a wait-and-see attitude until the situation becomes clearer.

The "hawkish" remarks from the Federal Reserve have shattered the market's fantasy of a possible temporary rate cut to rescue the economy. As of the weekend, the probability of a rate cut in May has dropped to 14.4%. The market currently leans towards the Federal Reserve making its first rate cut in June, with a probability of 70.2%, and expects a total of 4 rate cuts throughout the year.

Selling Pressure and Sell-off

This week, the on-chain selling pressure of Bitcoin continued to weaken, dropping significantly compared to last week. The total on-chain selling volume for the week fell to 107810.75 BTC, with short-term holders accounting for 103713.35 BTC and long-term holders for 4097.4 BTC. Net outflows from exchanges persisted, reaching 19467.31 BTC this week.

The long-term holder group is still playing a stabilizer role, with a net increase of nearly 100,000 this week. As the price rebounded, the overall floating loss level of the short-term holder group fell to about 8%.

Capital Flow

The stablecoin channel achieved the highest weekly inflow scale since January, exceeding $950 million. The net inflow of funds through the ETF channel surpassed $10 million, and Bitcoin's recent performance continued to outperform the Nasdaq index.

Cycle Indicators

According to a certain data engine, the Bitcoin cycle indicator is 0.125, indicating that the market is in a rise relay period.