Crypto Market Weekly Report: BTC Fluctuates at High Levels, Awaiting a Breakthrough Opportunity

Since the low point in April, BTC has rebounded by as much as 50%, outperforming the Nasdaq index and reaching an all-time high. However, the significant increase in the short term has also accumulated some selling pressure. Starting from May 22, there has been a large-scale sell-off in the BTC market, which has put some pressure on BTC, which is at a high position and leading the US stock market, becoming a driving force for the price decline.

This Thursday, due to the spread of panic in the market, BTC dipped to the support level of 100,000 dollars. Subsequently, the price continued to rebound, regaining its position above the main upward trend line.

With the adjustment of the US stock market, the buying power of the BTC spot ETF has weakened, making it difficult for BTC to digest selling pressure and continue to rise in the short term. It is worth noting that, along with the price correction, the outflow from exchanges has increased significantly this week, indicating that new funds are taking the opportunity of the adjustment to accumulate.

The positive non-farm employment data has created a favorable atmosphere for the stabilization and rebound of BTC, but breaking through new price levels may require greater progress in trade policy, encryption currency regulation, or Federal Reserve interest rate cuts.

Macroeconomic and Policy Trends

The U.S. non-farm payroll employment data for May showed an increase of 139,000 jobs, which is the lowest since February but slightly higher than the market expectation of 126,000 jobs. The unemployment rate remained at 4.2% without any deterioration. These data slightly exceeded expectations, driving the three major U.S. stock indices up while gold fell.

Currently, the market has strong expectations for a "soft landing" of the U.S. economy, meaning that after experiencing rapid growth and high inflation over the past few years, the economy gradually slows to a sustainable growth level while avoiding severe economic recession or large-scale unemployment. The current economic and employment data basically align with this characteristic.

In terms of trade policy, although the leaders of China and the United States had their first conversation and agreed that representatives from both sides would soon hold consultations, they are still in the negotiation stage and it will take time to reach an agreement. Meanwhile, the increase in steel and aluminum tariffs by the United States has also triggered retaliation threats from Canada.

Overall, driven by slightly better-than-expected non-farm data and slowly progressing trade negotiations, U.S. stocks, bonds, and the dollar maintained a fragile balance over the past week, with a slight tilt towards optimism.

Crypto Market Performance

BTC has been leading the rebound since April, outperforming the Nasdaq index. The US stock market is gaining momentum to challenge previous highs, while BTC reached a historic high on May 22.

From a technical indicator perspective, BTC underwent a two-week pullback after reaching a new high. Last week, it retraced by 3.07%, and this week it experienced significant fluctuations with a slight increase of 0.08%, showing a long downward cross pattern on the weekly chart. During the adjustment process, trading volume has been in a state of contraction.

The highest pullback in two weeks is about 10%, operating overall above the previous bottom, with the lowest point also retracing to the main upward trend line this Thursday.

Considering that the US stock market has not yet broken new highs, it is a normal phenomenon for BTC to undergo this kind of adjustment after refreshing its historical high. Maintaining a certain period of fluctuation may be inevitable, and to break new highs and reach another level, greater progress may be needed in trade policies, cryptocurrency regulation, or interest rate cuts from the Federal Reserve.

Market Supply and Demand Analysis

Since April, BTC has rebounded from a low point with a maximum increase of 50%. As the price reached a historical high, both short-term bottom-fishing funds and long-term holders have seen a certain degree of profit-taking. This selling pressure peaked on May 22 and has gradually weakened since then.

It is worth noting that, alongside the reduction in sell-offs, the outflow of BTC from centralized exchanges has increased. 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 level by long-term capital.

Capital Flow

After a significant rise in BTC, even funds through ETF channels are experiencing profit-taking. In the past two weeks, there has been a slight outflow of funds from BTC spot ETFs, with an outflow of $135 million last week and $128 million this week. This outflow of funds occurs against the backdrop of a sharp increase in BTC prices and fluctuations in the U.S. stock market.

Although it is difficult to predict when ETF funds will return to net inflows in the short term, considering the overall trend of the US stock market, we believe there is no need to worry excessively about a significant decline. While there is a possibility of a continued pullback to 100,000 from a technical perspective, seizing this opportunity is quite challenging. In a situation where supply and demand maintain a fragile balance, a breakout rise could suddenly occur within just a day or two.

Market Cycle Indicators

According to eMerge Engine data, the EMC BTC Cycle Metrics indicator is currently at 0.625, in an upward phase.