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Since the low point in April, BTC has rebounded by up to 50%, outperforming the Nasdaq and reaching a new historical high.
However, the significant short-term increase has also accumulated some selling pressure. Since May 22, the BTC market has begun to experience large-scale selling. This has put some pressure on BTC, which is at a high level and leading the US stocks, becoming a source of downward momentum for BTC prices.
Unable to continue rising, BTC explored downward during the market panic caused by the conflict between Trump and Musk on Thursday, touching the support level of $100,000. The price has since continued to rebound, returning above the "first upward trend line".
Accompanied by the US stock market adjustment, the buying power of the BTC Spot ETF channel has converged, making it difficult for BTC to absorb selling pressure and continue rising. However, it is worth noting that as the price adjusted, the outflow from exchanges this week has also significantly increased, indicating that new funds are taking the opportunity to accumulate chips.
The favorable non-farm employment data has created a good atmosphere for BTC's stabilization and rebound, but truly breaking through to a new level may still require more progress in the "reciprocal tariff war", "cryptocurrency policy", or Federal Reserve interest rate cuts.
Policy, Macroeconomic, and Economic Data
This week, the US released non-farm employment data. The number of employed people in May increased by 139,000, which is a new low since February but slightly higher than the market expectation of 126,000. The US unemployment rate in May was 4.2%, as expected, and did not worsen.
The data performance slightly exceeded expectations, driving the three major US stock indices up and gold down.
In recent reports, we emphasized that US stock trading revolves around two main lines:
1. Pricing the US economic "soft landing", "hard landing", or recession based on economic and employment hard data. Currently, the market pricing is close to a "soft landing", meaning that after years of rapid growth and high inflation, the economy gradually slows down to a sustainable growth level without a severe economic recession or large-scale unemployment. The current economic and employment data align with this characteristic. Although GDP growth has slowed, it is due to the Federal Reserve's active cooling, inflation data is orderly declining, unemployment rate is stable, and new employment has not significantly decreased. Of course, this also means that the Federal Reserve's interest rate cut will inevitably be delayed.
2. Predicting potential long-term economic and market changes caused by "reciprocal tariffs" and other government policies, and pricing them in advance through forward-looking trading. The market crash in March and early April was a forward-looking pricing of unexpected "reciprocal tariffs" and potential inflation and employment deterioration. The market rebound after April 7 was a forward-looking pricing of an economic "soft landing" after Trump's attitude "softened". This forward-looking pricing includes the expectation that the "reciprocal tariff war" will end relatively moderately, not causing US inflation to worsen, not significantly impacting US corporate profits, and two 50 basis point rate cuts in the second half of the year.
In the May monthly report, we pointed out that the current market pricing is relatively optimistic, and short-term further upward pricing is too optimistic. In fact, there are still many uncertainties regarding the reciprocal tariff war.
In the past week, US and Chinese leaders had their first phone call since the tariff war, and while the subsequent statement emphasized respect and reciprocity and agreed that representatives from both sides will soon consult in the UK, it can be seen that they are still in the negotiation stage, far from signing an agreement.
As Trump raised steel and aluminum tariffs from 25% to 50%, the Canadian government also threatened retaliation.
In addition, other events that significantly impacted the market this week include Musk's public criticism of the "Beautiful Law" and Trump's attack. Musk called the law "disgusting" and called on the public to pressure Congress to block its passage, while Trump threatened to cancel federal contracts with Musk's companies. This argument caused Tesla to experience its largest single-day drop in history and triggered a sharp drop in US stock indices and BTC. However, this conflict is currently an isolated incident and unlikely to significantly impact market trends for an extended period.
Overall, driven by slightly better-than-expected non-farm data and slowly but steadily progressing "reciprocal tariff" negotiations, US stocks, US bonds, and the US dollar maintained a fragile balance and slightly tilted towards optimism in the past week.
Crypto Market
In the rebound since April, BTC's trend has led the Nasdaq. While US stocks are preparing to impact previous highs, BTC has already refreshed its historical high on May 22.
From a technical indicator perspective, after rebounding to a new high, BTC has undergone a two-week adjustment, falling back 3.07% last week and fluctuating slightly up 0.08% this week, appearing as a long-tailed cross on the weekly chart. During this adjustment, volume has been in a state of contraction.
The highest callback in two weeks was around 10%, overall within the "Trump bottom", with the lowest day on Thursday touching the "first upward trend line".
This adjustment after BTC refreshed its high before US stocks reach new highs is predictable and benign. A certain period of oscillation is inevitable, and breaking to a new high may require more progress in the "reciprocal tariff war", "cryptocurrency policy", or Federal Reserve interest rate cuts.
Selling Pressure and Selling
Since rebounding from the depths of despair in April, BTC has recorded a maximum increase of 50%.
With the refresh of historical high records, both short-term dip buyers and long-term investors still in shock have shown some selling. This selling pressure reached a phased high point on May 22 and has since gradually decreased.
On-chain realized profits have been declining since May 22
It is worth noting that as selling decreases, the outflow from centralized exchanges has increased, with this week's outflow reaching 76,520.72 coins, far higher than the daily 1-2 thousand coin outflow. This large outflow can be seen as a strong endorsement of the current price by long-term funds.
Capital Inflow and Outflow
After a phase of floating profits, even profit-taking has occurred in the BTC Spot ETF channel.
In the past two weeks, the BTC Spot ETF channel has experienced small capital outflows, 135 million last week and 128 million this week. These outflows occurred during BTC's significant rise and US stock market volatility.
Stablecoin and ETF channel capital inflow and outflow statistics (weekly)
In isolation, it is difficult to estimate when this channel's funds will return to inflow. However, considering the overall US stock market trend, we believe concerns about a significant downward exploration are unnecessary. Although there is a technical possibility of retesting $100,000, the difficulty of grasping this is high. In the fragile supply and demand balance, a breakthrough rise may occur within a day or two.
Cycle Indicators
According to eMerge Engine, the EMC BTC Cycle Metrics indicator is 0.625, in an upward phase.
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