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.

Written by  0xWeilan

This week, BTC opened at $82,379.98 and closed at $78,370.75, down 4.87% for the week, with an amplitude of 13.92%, and the trading volume increased significantly. BTC price was running in a downward channel, and after approaching the upper edge of the channel, it broke down and fell at the weekend due to the drag of the United States. It is currently temporarily stabilized near the annual line (365 days).

On April 2, the US President announced a "reciprocal tariff" clause that was far beyond expectations, shocking the world. Subsequently, the Chinese government announced countermeasures. The capital market was in a state of panic. The three major US stock indexes responded to the impact of the "reciprocal tariff" with a sharp drop this week, and the yields of both long-term and short-term US bonds fell sharply.

The “reciprocal tariff” war overshadowed all other news, with markets busy selling assets and pricing downwards for policies that far exceeded expectations.

The global capital market is currently in the process of drastic adjustments and pricing completion, with the biggest variable coming from the subsequent response measures of the US President and the Federal Reserve.

Macro-financial and economic data

On April 2, US President Trump signed an executive order at the White House, announcing the implementation of "reciprocal tariffs" on global trading partners, setting a minimum base tariff of 10%, and imposing higher tariffs (for example, 34%) on some countries (such as China). The base tariff will take effect on April 5, and the high tariff measures will take effect on April 9, 2025.

In an interview, U.S. Treasury Secretary Bennett called on countries to exercise restraint and said that this would be the upper limit if there is no countermeasure.

On April 3, China responded strongly by imposing a 34% tariff on all imported goods originating from the United States, which will also take effect on April 9.

Although most small economies have given in and endured the impact, it is expected that the EU and the UK will continue to introduce certain countermeasures in the future.

As the market was far beyond expectations, the three major U.S. stock indexes plummeted rapidly in the two trading days of Thursday and Friday to price in the impact. The Nasdaq, S&P 500 and Dow Jones fell 10.02%, 9.08% and 7.86% respectively for the week. Apple and Nvidia, which were directly affected by the "reciprocal tariffs", fell 13.55% and 14.01% for the week. The U.S. stock market lost more than $5 trillion in market value for the week.

On April 4, the U.S. Department of Labor released the U.S. non-farm payrolls data for March. The number of employed people increased by 228,000, far exceeding the market expectation of 135,000 to 140,000. The unemployment rate rose slightly to 4.2%, slightly higher than the market expectation of 4.1%. The chairman of the Federal Reserve stated in his speech: The U.S. economy is still strong, and tariffs will drag down the economy and inflation. His speech can be described as very "hawkish".

Trump urged the Federal Reserve to cut interest rates as soon as possible on social media, and by the weekend, the Fed Watch dashboard showed that as U.S. stocks plummeted, traders had raised their expectations for the number of interest rate cuts this year to four, with the probability of a cut in June exceeding 90%.

The reciprocal tariff conflict will continue, but the worst may be passing. The market will need to gradually confirm whether pricing is adequate and whether a worse scenario will occur over the next period of time.

What is more crucial is whether "using tax to promote negotiations" exists and what the outcome of the negotiations between the United States and various countries will be.

Fund Flow

The crypto market saw outflows of $333 million for the week, including $178 million from the BTC Spot ETF channel and $108 million from stablecoins. The four-week trend of net inflows was broken.

Considering the sharp fluctuations in U.S. stocks, the scale of this outflow is not serious, but there may be further sell-offs in the future, so we must guard against it.

Selling pressure and selling

With the turmoil in the US stock market, the market selling pressure also increased slightly, and the scale of on-chain inflow into the exchange reached 188,614.7, with short-handed selling intensifying, while long-handed selling slightly decreased compared with last week . According to eMerge Engine data, after three consecutive weeks of outflow, the scale of BTC held by CEX increased by 3,116.1 this week, indicating that there has been a certain accumulation of selling pressure.

Since late February, the short-hand group has been in a state of floating loss most of the time, and the recent floating loss ratio has reached 16%, recording the largest floating loss record since this cycle. The short-hand group is still under great pressure, and the collapse of this group will lead to further price falls.

The long-term holding group continued to stabilize the market, increasing their holdings by 53,300 coins this week.

Unless the U.S. stock market rebounds or the Federal Reserve introduces interest rate cuts and other measures to increase its holdings, it will be difficult for buying power to be significantly received and paid, and the market will find it difficult to gain upward momentum.

Cycle Indicators

According to the eMerge engine, the EMC BTC Cycle Metrics indicator is 0.375, and the market is in an upward relay period.

EMC Labs was founded by crypto asset investors and data scientists in April 2023. It focuses on blockchain industry research and Crypto secondary market investment, takes industry foresight, insight and data mining as its core competitiveness, and is committed to participating in the booming blockchain industry through research and investment, and promoting blockchain and crypto assets to bring benefits to mankind.

For more information, please visit: https://www.emc.fund