On Thursday (May 29), the financial markets experienced volatility, with uncertainty in US trade policy becoming the focus. The US Federal Court of Appeals temporarily suspended the previous trade court's ruling that deemed Trump's tariff measures invalid, meaning these tariff measures are temporarily reinstated. This dramatic reversal triggered market fluctuations, with the 10-year US Treasury yield briefly rising to 4.53% before turning back and ultimately closing at 4.42%, down 5 basis points from the previous day.
However, unlike the fluctuations in US Treasuries, BTC showed a downward trend throughout the day, breaking through the key support level of $107,300. Analysts point out that this highlights the desire of BTC bulls to take profits and maintain a wait-and-see stance after the previous significant rally. Some views suggest that BTC's characteristics are gradually shifting from a risk asset similar to tech stocks to a dollar asset alternative more akin to gold. Therefore, if market concerns about US and Japanese bonds ease, and inflation upside risks remain unresolved, high US Treasury yields (maintaining above 4.5%) may continue to pressure BTC prices.
Inflation Outlook and Renewed Hawkish Fed Tone
On the same day, Federal Reserve Chairman Powell met with US President Trump at the White House for their first meeting since Trump began his second term in January. They discussed economic growth, employment, and inflation. Powell reiterated the Fed's "independence" and emphasized that rate decisions will be based on "non-political" analysis. Trump expressed a different view, calling the lack of rate cuts a "mistake".
Meanwhile, Dallas Fed President Lorie Logan made hawkish remarks, stating that the Fed "may need to keep short-term rates unchanged for quite some time" and emphasized the need for more time to observe changes in risk balance. After cutting rates by 100 basis points in the second half of last year, the Fed has maintained the federal funds rate target range at 4.25%-4.5%. Although the US April CPI year-on-year increase was 2.3%, indicating the current rate level still has restrictive properties and theoretical downside space (if inflation doesn't rebound), the market needs to be cautious: if inflation rises, its debt-diluting effect combined with an expanding fiscal deficit could undermine investors' confidence in US Treasuries as a "super-safe" asset.
Market Outlook: Focus on Inflation Data, BTC Technical Weakness
Market focus is shifting to key economic data, especially the US core PCE price index to be released on Friday (May 30), which will provide clearer clues about the inflation outlook.
On the daily chart, BTC has effectively lost the key support level of $107,300, indicating a significant increase in short-term selling pressure. If this level cannot be quickly reclaimed, BTC is likely entering a high-level consolidation phase, with short-term pullback risks not to be overlooked. Investors need to closely monitor the defense of key support levels. However, from a medium-term perspective, BTC's overall upward trend has not been broken, and the long-term structure remains upward.
