BTC Rebound to Key Price Level, ETF Capital Inflow Provides support

This week, the opening price of Bitcoin was 82562.50 USD, and the closing price was 86092.94 USD, with a weekly increase of 4.28% and a volatility of 7.71%. This marks the second consecutive week of increase for Bitcoin, but trading volume has declined for three consecutive weeks. Currently, the price of Bitcoin is operating in a downward channel and is approaching the upper edge of the channel.

The Federal Reserve held a monetary policy meeting this week, releasing dovish signals. The meeting indicated that intervention measures would be taken if economic issues arise, and suggested that there could be two rate cuts this year. This statement has led to a stabilization and rebound in US stocks, while there has also been a significant inflow of funds into cryptocurrency ETFs, pushing the price of BTC to stabilize and rebound to the upper end of the descending channel.

Next week, the U.S. will release PCE data, which may have a significant impact on Bitcoin price trends, and the market will face a directional choice.

Macroeconomic Environment

On March 19, the Federal Reserve maintained the benchmark interest rate at its meeting, keeping the key borrowing rate in the range of 4.25% to 4.5%. The Federal Reserve also hinted at a possible reduction of 50 basis points in 2025 and announced an adjustment to the pace of its bond reduction.

The Federal Reserve Chairman stated that they have lowered their economic growth forecast and emphasized that the current president's tariff policy is a major factor driving up inflation. For the U.S. stock market, which has fallen for three consecutive weeks, the most concerning aspect is the Federal Reserve's commitment to take action in the event of a worsening economic situation.

Starting from April 1, the Federal Reserve will slow the pace of its balance sheet reduction, adjusting the cap on U.S. Treasury bond sales from $25 billion per month to $5 billion. This move is seen as support for the bond market. The Federal Reserve's relatively "dovish" response to the market downturn indicates that while achieving inflation targets, it is also concerned with the stability of employment and equity markets to prevent a larger crisis.

Despite the fundamental issues such as chaotic tariff policies and economic stagnation not undergoing substantial changes, the market that experienced a decline is beginning to stabilize and rebound. The dollar index rose by 0.25% for the week. The Nasdaq, S&P 500, and Dow Jones indices increased by 0.17%, 0.51%, and 1.2%, respectively. The yields on 2-year and 10-year U.S. Treasury bonds fell by 1.59% and 1.39%, to 3.9670% and 4.2580%, respectively.

Some funds continue to choose safe-haven gold. London gold has achieved a three-week consecutive rise, increasing by 1.23% this week, closing at 3023.31 USD/ounce.

Cryptocurrency Market Dynamics

This week, Bitcoin spot ETFs showed breakthrough signals, welcoming positive inflows after five consecutive weeks of decline. All five trading days of the week recorded net inflows, totaling $1.05 billion. This large-scale capital inflow became a strong support for the rebound in Bitcoin prices.

In terms of stablecoins, there was an inflow of $958 million over the week. Overall, a total inflow of $1.95 billion across all channels provided important support to the market.

As the price rebounds, market selling pressure has also significantly weakened, dropping to 114,992 coins. Data shows that this week long-term holders reduced their holdings by 3,284 coins, while short-term holders reduced theirs by 111,709 coins. Long-term holders' positions increased by 73,000 coins over the week, and the exchange inventory decreased by nearly 7,000 coins. The selling pressure from short-term holders is being continuously absorbed, indicating that long-term investors are relatively optimistic about the current price.

According to market data, the BTC cycle indicator is 0.375, indicating that the market is in a rising continuation phase.

The capital flow of Bitcoin spot ETFs will continue to be an important factor influencing the market trend, and it is worth paying close attention to. However, since the capital flow of ETFs is closely related to the trend of the US stock market, this also increases the difficulty of predicting the price trend of Bitcoin.