The information, opinions, and judgments regarding the market, projects, currencies, etc., mentioned in this report are for reference only and do not constitute any investment advice.
This week, BTC opened at $82,379.98 and closed at $78,370.75, down 4.87% for the week, with a volatility of 13.92% and a significant increase in trading volume. The BTC price is operating within a descending channel, approaching the upper edge of the channel before being dragged down by the U.S. over the weekend, currently stabilizing near the annual line (365 days).
On April 2, the U.S. President announced unexpectedly high "reciprocal tariffs," shocking the world. Subsequently, the Chinese government announced countermeasures. The capital market is in turmoil, with the three major U.S. stock indices responding to the "reciprocal tariffs" impact with significant declines this week, and both short and long-term U.S. Treasury yields have dropped sharply.
The "reciprocal tariffs" war has overshadowed all other news, with the market busy selling off assets and pricing down for policies that exceeded expectations.
The global capital market is currently undergoing a severe adjustment to complete pricing, with the biggest variable coming from the U.S. President and the Federal Reserve's subsequent response measures.
Macroeconomic and Financial Data
On April 2, U.S. President Trump signed an executive order at the White House, announcing the implementation of "reciprocal tariffs" on global trading partners, establishing a minimum baseline tariff of 10%, and imposing higher rates (e.g., 34%) on certain countries (such as China). The baseline tariff will take effect on April 5, while the higher tariff measures will take effect on April 9, 2025.
U.S. Treasury Secretary Mnuchin called on countries to exercise restraint in an interview, stating that if there are no countermeasures, this will be the upper limit.
On April 3, China strongly retaliated, announcing a 34% tariff on all imported goods originating from the U.S., effective on April 9.
Although most small economic countries have retreated and endured, it is expected that the EU and the UK will continue to introduce certain countermeasures in the future.
Due to the significantly unexpected nature of the tariffs, the three major U.S. stock indices plummeted rapidly on Thursday and Friday to price in the impact. The Nasdaq, S&P 500, and Dow Jones fell by 10.02%, 9.08%, and 7.86%, respectively, over the week. Apple and Nvidia, directly affected by the "reciprocal tariffs," dropped 13.55% and 14.01% for the week. U.S. stocks lost over $5 trillion in market value for the week.
On April 4, the U.S. Department of Labor released the non-farm employment data for March, showing an increase of 228,000 jobs, far exceeding the market expectation of 135,000 to 140,000 jobs, with the unemployment rate slightly rising to 4.2%, just above the market expectation of 4.1%. The Federal Reserve Chairman stated in a speech that the U.S. economy remains strong, but tariffs will weigh on the economy and inflation. His remarks were considered very "hawkish."
Trump urged the Federal Reserve on social media to cut interest rates as soon as possible, and by the weekend, the Fed Watch board showed that with the sharp decline in U.S. stocks, traders have raised the number of expected rate cuts this year to four, with the probability of a rate cut in June exceeding 90%.
The conflict over reciprocal tariffs will continue, but the worst moments may be passing, and the market needs to gradually confirm whether the pricing is sufficient and whether more severe scenarios will occur in the future.
More critically, it remains to be seen whether "taxes will promote talks" and what the results of negotiations between the U.S. and various countries will be.
Capital Flow
The cryptocurrency market saw a capital outflow of $333 million for the week, with $178 million from the BTC Spot ETF channel and $108 million from stablecoins. The trend of net capital inflow for four consecutive weeks has been broken.
Considering the severe volatility in U.S. stocks, this outflow scale is not severe, but there may be additional selling pressure in the future, which cannot be ignored.
Selling Pressure and Sell-offs
With the turbulence in U.S. stocks, market selling pressure has also slightly increased, with the scale of inflows to exchanges reaching 188,614.7 BTC, exacerbating short selling, while long-term selling has slightly decreased compared to last week. According to eMerge Engine data, after three consecutive weeks of outflows, the amount of BTC held by CEX increased by 3,116.1 BTC this week, indicating a certain accumulation of selling pressure.
Since late February, the short position group has mostly been in a state of unrealized losses, with the recent unrealized loss ratio reaching 16%, recording the largest unrealized loss since this cycle began. The short position group is currently under significant pressure, and the collapse of this group will lead to further price declines.
The long position group continues to play a stabilizing role in the market, increasing their holdings by 53,300 BTC this week.
Unless U.S. stocks rebound or the Federal Reserve implements interest rate cuts, buying power is unlikely to significantly increase, making it difficult for the market to gain upward momentum.
Cycle Indicators
According to eMerge Engine, the EMC BTC Cycle Metrics indicator is at 0.375, indicating that the market is in a rising continuation phase.
EMC Labs
EMC Labs was established in April 2023 by cryptocurrency asset investors and data scientists. It focuses on blockchain industry research and investments in the crypto secondary market, with industry foresight, insights, and data mining as its core competitive advantages, aiming to participate in the thriving blockchain industry through research and investment, promoting the benefits of blockchain and cryptocurrency assets for humanity.
For more information, please visit: https://www.emc.fund
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