The information, opinions and judgments on markets, projects, currencies, etc. mentioned in this report are for reference only and do not constitute any investment advice.
Since the low point in April, BTC has rebounded by as much as 50%, stronger than the Nasdaq and setting a new all-time high.
However, the sharp rise in the short term has also accumulated a certain amount of selling pressure. Since May 22, the BTC market has begun to see large-scale selling. This has put a certain amount of pressure on BTC, which is at a high level and leading the US stock market, and has become the driving force for the decline in BTC prices.
With no upward momentum, BTC fell on Thursday amid market panic caused by the conflict between Trump and Musk, and retreated to the $100,000 support level. The price has since continued to rebound and returned to the first rising trend line.
With the adjustment of US stocks, the buying power of the BTC Spot ETF channel has converged, making it difficult for BTC to absorb selling pressure and continue to rise in the short term. However, it should be noted that with the price correction, the outflow scale of the exchange has also increased significantly this week, indicating that new funds are taking advantage of the adjustment to absorb chips.
The positive news from the non-farm payrolls data has created a good atmosphere for BTC to stabilize and rebound, but a real breakthrough to a new level may require greater progress in the “reciprocal tariff war,” “cryptocurrency policy,” or the Fed’s interest rate cuts.
Policy, macro-finance and economic data
This week, the United States released non-farm payroll data, with an increase of 139,000 jobs in May, a new low since February, but slightly higher than the market expectation of 126,000. The U.S. unemployment rate in May was 4.2%, which was expected to be 4.2% and the previous value was 4.2%, which did not deteriorate.
The data performance slightly exceeded expectations, pushing up the three major U.S. stock indexes and lower gold prices.
In recent reports, we emphasize that US stock trading revolves around two main themes:
1. Pricing based on hard economic and employment data: Will the U.S. economy have a soft landing, hard landing or fall into recession? The current market pricing is close to a soft landing, that is, after experiencing rapid growth and high inflation in the past few years, the economy has gradually slowed down to a sustainable growth level, and there will be no serious economic recession or large-scale unemployment. The current economic and employment data meet this feature. Although the GDP growth rate has declined to a certain extent, it is due to the Feds active cooling. Inflation data has declined in an orderly manner, the unemployment rate has stabilized, and the number of new jobs has not dropped significantly. Of course, this also makes it inevitable that the Feds interest rate cut will be delayed.
2. Predict the possible changes in the economy and market caused by reciprocal tariffs and other government policies in the medium and long term, and set prices in advance through forward-looking transactions. The market crash from March to early April was a forward-looking pricing of the reciprocal tariffs that exceeded expectations and the inflation and employment deterioration that might be caused, while the market rebound after April 7 was a forward-looking pricing of the soft landing of the economy after Trumps softening attitude. This forward-looking pricing includes the reciprocal tariff war will end relatively mildly, will not cause the deterioration of US inflation, will not have a significant impact on the profits of US companies, and will have two 50 basis point interest rate cuts in the second half of this year.
In the May monthly report , we pointed out that the current market pricing is optimistic and that upward pricing in the short term is too optimistic. In fact, there are still many uncertainties in the reciprocal tariff war.
In the past week, the leaders of the United States and China held their first phone call since the tariff war. Although they emphasized respect and equality in the subsequent statement and agreed that representatives of both sides would soon hold consultations in the UK, it can be seen that they are still in the negotiation stage and it will take some time before the agreement is signed.
And as Trump raised steel and aluminum tariffs from 25% to 50%, the Canadian government also threatened to retaliate.
In addition, other events that had a significant impact on the market this week included Musks public attacks on the Beautiful Bill and Trump. Musk called the bill disgusting and called on the public to pressure senators to prevent its passage, while Trump threatened to cancel federal contracts signed with Musks companies. The quarrel caused Tesla to suffer its largest single-day drop in history on Thursday, and also triggered a sharp drop in the US stock index and BTC. However, this conflict is still an occasional incident and is unlikely to affect market trends for a long time.
Overall, driven by non-farm data that slightly exceeded expectations and the slow but progressing reciprocal tariff negotiations, U.S. stocks, U.S. bonds and the U.S. dollar maintained a fragile balance and tilted slightly towards optimism in the past week.
Crypto Market
In the rebound since April, BTC has been ahead of the Nasdaq. U.S. stocks are gathering momentum to hit their previous highs, while BTC has already hit a new all-time high on May 22.
From the technical indicators, after the rebound to a new high, BTC has been in a two-week correction, retreating 3.07% last week, and fluctuating sharply this week with a slight increase of 0.08%, which is reflected in the long cross needle on the weekly chart. During this adjustment process, the volume is in a state of shrinkage.
The highest correction in two weeks was around 10%, and the overall correction was within the Trump bottom. The lowest day, which was Thursday this week, retraced to the first rising trend line.
In the case that the U.S. stock market has not yet hit a new high, this adjustment after BTC hits a new high is foreseeable and benign. It is inevitable to maintain a certain period of volatility. If the market reaches a new high and goes up a level, it may require greater progress in the reciprocal tariff war, cryptocurrency policy or the Feds interest rate cut.
Selling pressure and selling
Since April, BTC has recorded a 50% increase as it rebounded from the depths of despair.
As the historical record was refreshed, both short-term bargain hunting funds and long-term funds that were still in shock saw some selling. This selling pressure reached a temporary peak on May 22 and has gradually decreased since then.
On-chain realized profits have been declining since May 22
It is worth noting that as the sell-off decreases, the outflow from centralized exchanges is increasing. This week, the outflow reached 76,520.72 coins, which is much higher than the daily outflow of 10,000 to 20,000 coins per week. This large outflow can be regarded as a high recognition of the current price by long-term funds.
Funds In and Out
After the emergence of periodic floating profits, even the phenomenon of cashing in profits also occurs to the funds in the ETF channel.
In the past two weeks, the BTC Spot ETF channel has seen a small outflow of funds, 135 million last week and 128 million this week. This outflow occurred when BTC rose sharply and fluctuated with the US stock market.
Stablecoin and ETF channel capital inflow and outflow statistics (weekly)
In isolation, it is difficult to predict when funds will flow back into this channel, but considering the overall trend of US stocks, we believe that there is no need to worry about a sharp drop. Although there is a technical possibility of continuing to fall back to $100,000, it is difficult to grasp. In the fragile balance of supply and demand, a breakthrough rise may occur within one or two days.
Cycle Indicators
According to eMerge Engine, the EMC BTC Cycle Metrics indicator is 0.625 and is in an upward period.
EMC Labs
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