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This week, BTC opened at $94,265.47 and closed at $80,699.17, a weekly plunge of 14.39% with a volatility of 15.29%. Trading volume has decreased slightly from the previous week but remains at a high level. BTC price has broken below the "Trump bottom" (range of $89,000 - $110,000), retreating significantly from the "Trump trade" rally.
Over the past two weeks, BTC has been experiencing a torturous rollercoaster ride.
On the one hand, with the flip-flop and chaos of Trump's tariff policy, the US stock market has started to trade in an "economic recession" mode, giving back most of the gains from the "Trump trade", which has also led to the largest outflow since its inception for the BTC Spot ETF.
On the other hand, Trump's signing of the "BTC Strategic Reserve Executive Order" and the hosting of the first White House Crypto Summit have conveyed many positive information regarding crypto asset regulation and use cases, and Texas has also passed a state-level BTC reserve bill, indicating that the use cases and policy environment for crypto assets, including BTC, in the US are improving.
However, investor sentiment has dominated the short-term price trend. Accompanied by the US stock market "unwinding the Trump trade", BTC also plunged 14.39% this week, the second largest weekly decline of the period, although it has not fallen below the lowest point on February 28, it has already broken through the "Trump bottom" and the 200-day bull-bear dividing line. The Fear & Greed index has fallen back to the "extreme fear" level of 20 points.
With the release of the non-farm payroll data on Friday and the "dovish" remarks by the Fed Chair, the US stock market has temporarily stabilized, but the medium-term outlook remains uncertain, depending on the trend of Trump's tariff policy and US economic data. BTC's performance will continue to be constrained by the US stock market and lacks the conditions to break out independently.
Macro Finance and Economic Data
On Friday, the US job market showed further signs of slowing. The February non-farm payrolls increased by 151,000, slightly lower than market expectations, and the unemployment rate unexpectedly rose from the previous 4% to 4.1%, a new high since November last year.
Subsequently, Fed Chair Powell stated that although facing uncertainties, the current US economic situation is still good, the job market is in a healthy balance, and the Fed should remain cautious and patient in adjusting policy rates at this stage, as the cost of caution is "very, very low". The uncertainty caused by changes in Trump's policies remains high, and the Fed is evaluating the impact of changes in trade policies, which have exacerbated economic uncertainty.
This statement continues the Fed's consistent stance and contains no new information. However, it may be due to responding to the US stock market decline and market fears of a recession, that he subsequently released a "dovish" statement.
Powell said that if the economy continues to remain strong and inflation fails to further decline to the 2% target, the Fed may maintain the current benchmark interest rate. However, if the job market unexpectedly weakens or inflation declines significantly in the future, the Fed will consider resuming rate cuts.
Based on the weakening economic data and US stock market adjustments, the CME Fed Watch shows that traders' latest bets on the Fed cutting rates this year have reached 3 times, about 75 basis points.
As a result, the US dollar index fell 3.52% for the week, closing at 103.882. The Nasdaq rebounded on Friday, closing above the annual line after breaking through it, and the S&P 500 closed above the 200-day line after breaking through it. The 2-year US Treasury yield rose slightly, and the 10-year US Treasury yield rose above 1.89%.
The non-farm payroll data on Friday has slightly improved the previously significantly reduced expectations of traders. However, concerns about a US economic recession or stagflation have not been eliminated, at most a correction to the previous significant downward pricing. Whether the rebound in US stocks and BTC can be sustained requires further observation, and more economic data is needed to determine if a bottom has been reached.
A psychological support for the long side is that the "Trump trade" rally in the US stock market has been fully unwound. The three major indices have returned to the levels before Trump's election victory on November 5.
Technical Analysis
Compared to the US stock market, BTC has maintained relatively strong performance, with the current price still about 15% higher than the November 5 high.
Technically, BTC's outlook remains pessimistic. It has fallen out of the "Trump bottom" and is trading below the first uptrend line (the deep green dotted line in the chart). Moreover, since the historical high on January 21, BTC has formed a descending channel (the green box in the chart), repeatedly suppressing BTC's rebounds.
On Sunday evening, the bears attacked the market again, and BTC fell sharply below the 200-day moving average. This adjustment intensity and weak performance are similar to the market performance in July-September 2024. The market is currently in an extremely oversold state, but it may require more external conditions and time to break out of the downtrend.
Selling Pressure and Liquidation
After the panic selling that broke the support last week, the selling pressure has decreased significantly this week. The long and short positions have sold a total of 147,351 BTC, returning to the previous normal level. However, the exchange balance has increased by more than 5,000 BTC, indicating that although the selling pressure has decreased, the buying power is still insufficient.
According to on-chain data, the overall market unrealized profit rate is 198%, with longs at 347% and shorts at a 6% unrealized loss. Shorts continue to be under pressure. In a bull market, when shorts are in an unrealized loss position, it is often a good opportunity for medium-term entry.
Stablecoins and BTC Spot ETF
Compared to the net outflow of $4.081 billion from the dual-channel last week, this week the high-pressure situation has eased to some extent, with a total inflow of $1.295 billion, including $2.107 billion inflow to stablecoins and $719 million outflow from BTC Spot ETF. The outflow from the BTC Spot ETF channel is the source of the selling pressure that has led to the market decline.
Crypto Market Capital Inflow and Outflow Statistics (eMerge Engine)
In February, the 11 US BTC Spot ETFs experienced the largest outflow since their approval, totaling $2.3 billion. After entering March, the outflow continues but the scale has decreased. The outflow group includes retail and institutional sell-offs, as well as the unwinding of CME contract arbitrage traders. In terms of the transmission path, for BTC price to stabilize, the US stock market needs to stabilize, and ETF holders need to shift from net outflow to net inflow.
Cycle Indicators
According to the eMerge Engine, the EMC BTC Cycle Metrics indicator is 0.375, indicating that the market is in an upward consolidation phase.
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