In the previous dehydration point of view, we expect that while waiting for the confirmation of the expected rate cut, Bitcoin may have room to rise due to the positive PCE data in April. From the actual results, Bitcoin has been trading sideways. This is not because of wrong data expectations, but may be affected by the large-scale decline of US technology stocks.
In general, there has been a large-scale position change in the US stock market recently. Funds have switched their funds from high-priced technology stocks to cyclical stocks with lower valuations. The driving effect of artificial intelligence trading on the entire market has declined, and the time for market style switching may be coming soon. Its impact on Bitcoin is certainly not favorable.
Apart from the market style switch, there are no other factors that are obviously unfavorable to Bitcoin. Therefore, the dehydrated view still remains cautiously optimistic about the future of Bitcoin.
01
Industry and Macro
Following the overall cooling of CPI in April, the Federal Reserve’s most favored inflation indicator, the core PCE price index, hit a three-year low.
Last Friday, the latest data from the U.S. Department of Commerce showed that the core PCE price index excluding food and energy grew 2.8% year-on-year in April, the same as expected, and the previous value was revised up to 2.82%. The core PCE grew 0.2% month-on-month in April, slightly lower than the expected and previous value of 0.3%, the lowest monthly increase this year. After the data was released, U.S. stocks fell again after a certain rise.
The GDP data released last Thursday also favored the expectation of a rate cut. The annualized quarter-on-quarter growth rate of real GDP in the first quarter of the United States was 1.3%, 0.3 percentage points lower than the initial value of 1.6%, and a significant slowdown from 3.4% in the fourth quarter of last year.
Favorable data did not bring about a general rise in U.S. stocks. On the contrary, technology stocks generally fell. This is mainly because funds are leaving high positions and looking for lows in the market. This low point is the undervalued traditional companies. So far this year, the Dow Jones Industrial Average, which has a relatively large proportion of traditional companies, has risen by only 1.2%, far behind the S&P 500 and Nasdaq. Since hitting a new high of 40,000 points on May 17, the Dow Jones Industrial Average has fallen nearly 5%, and is currently the most oversold since September 2022. This style switch, we need to pay attention to its impact on the crypto market later.
As far as the industry is concerned, there are still positive news. One is that BlackRock submitted a revised S-1 statement, and the Ethereum spot ETF is expected to be launched at the end of June. This positive news will be the main theme for some time to come.
The second is that David Bailey, CEO of Bitcoin Magazine and a cryptocurrency assistant for the Trump campaign, revealed that Trump had asked whether Bitcoin could be used to solve the U.S. national debt problem. This news confirms that the U.S. top leaders are highly interested in cryptocurrencies. From a small perspective, it is beneficial to the RWA track. From a big perspective, if Trump comes to power, there may be greater benefits.
02
On-chain data
According to Coinglass data, the amount of Bitcoin held by Bitcoin ETFs has shown a downward trend, which indicates that there has been a certain decline in institutional funds.
According to Glassnode data, the fees on the Bitcoin chain are on an upward trend, which indicates that the activity on the chain is increasing, which may be mainly related to the renewed market speculation on Bitcoin inscriptions and runes.
Overall, the signs of institutional holdings of Bitcoin have weakened to a certain extent, but the activity on the Bitcoin chain has risen again, and there are signs of capital inflows, which has kept Bitcoin in a relatively strong state. However, the overall signs of Bitcoin capital inflows have slowed down.
03
technical analysis
In the past week, BTC's performance was calm and maintained range fluctuations. From the overall performance, the price remained above the support area of the box below, which can be called a strong performance for the time being. In the current price range, it is necessary to pay attention to the pressure range of 69100-70600 above, and you can seek long orders after breaking through; and the price support of 66250 below needs to be paid attention to. If it falls below, there will be a decline in the H1 cycle.
