Weekly Review of BTC: Steady rise amid global financial turmoil

This week, the price of Bitcoin opened at $78370.15 and finally closed at $84733.07, achieving a weekly rise of 6.84% and a volatility of 14.89%. The trading volume continued to expand significantly, and the price effectively broke through the upper edge of the downward channel since late January for the first time, approaching the 200-day moving average.

The biggest variable in the global macro-financial arena remains the trade friction initiated by Trump. Its dramatic manifestation has left the world astonished, and China's countermeasures are particularly noteworthy. In this "collision game", the side that blinks first is likely to lose. The trade friction on a global scale has triggered widespread reactions from the political, business, and capital markets, ultimately leading to funds beginning to withdraw from the US market, with the US stock, bond, and foreign exchange markets experiencing rare simultaneous setbacks.

Faced with enormous financial risks, the U.S. government chose to make concessions, partially postponing or reducing the intensity of tariffs, and releasing goodwill towards major trading partners on the public opinion front. As a result, trade friction has entered a new phase, with all parties set to engage in negotiations and compromises. The risk asset markets, which had previously plummeted due to trade friction, have since seen a significant rebound. Although the most severe stage may have passed, the subsequent uncertainties will continue to impact various markets. The direction of trade friction, the Federal Reserve's policy adjustments, and whether the U.S. economy will fall into recession will become the focal points of market attention.

In terms of policy and macro finance, due to most countries finding it difficult to effectively counteract the United States' trade policies, the countermeasures from China and the European Union have become the main force to balance the U.S., with China's tit-for-tat response being particularly prominent. After multiple rounds of confrontation, the U.S. has raised tariffs on China to 145%, while China's counter-tariffs on the U.S. have reached 125%. This has seriously affected the normal trade exchanges between the two sides, and therefore, China has announced that it will no longer respond to any potential further tariff increases by the U.S.

On April 10, the United States announced a suspension of additional tariffs on most countries (excluding China), retaining a "baseline tariff" of 10% and beginning negotiations. This news drove a significant rise in the US stock market, with the Nasdaq index recording its second-largest single-day increase in history. Subsequently, the United States also exempted some Chinese goods from high tariffs, including smartphones, tablets, laptops, semiconductors, integrated circuits, and other products.

Not only China's countermeasures have pushed for a change in the U.S. government's attitude, but also the strong opposition voices from the domestic political and business circles in the United States, as well as the severe fluctuations in the financial market. On April 7, the three major U.S. stock indices fell sharply, reaching a new low in adjustments, with some indices approaching a technical bear market. The next day, the VIX panic index soared to 52.33, marking the third highest peak since the 2008 financial crisis and the 2020 COVID-19 pandemic.

During the same period, the US Treasury market also experienced significant volatility, with short-term Treasury yields falling sharply, while long-term Treasury yields saw a noticeable rebound. After a sell-off in both the stock and bond markets, funds began to withdraw from the US market, leading to a substantial decline in the US dollar index.

The "triple blow" of stocks, bonds, and currencies has forced the U.S. government to release easing signals and announce a list of exempted goods. Meanwhile, the Federal Reserve also sent out "dovish" signals. Boston Fed President Collins stated that the Federal Reserve is prepared to use various tools to stabilize the financial markets if necessary.

The easing of trade friction and the Federal Reserve's statements have temporarily alleviated market tensions. On Friday, the three major U.S. stock indices closed with a rise, ending a tumultuous week. However, considering the uncertainty of U.S. government policies, as well as the recession and inflation risks facing the U.S. economy (the University of Michigan's consumer confidence index released this week continued to decline to 50.8), the possibility of a V-shaped market reversal is low.

In terms of on-chain data for Bitcoin, this week the selling pressure from short and long-term holders has weakened, slightly halting three consecutive weeks of panic selling. The total on-chain selling volume for the week was 188816.61 BTC, with short-term holders selling 178263.27 BTC and long-term holders selling 10553.34 BTC. On the 7th and 9th, short-term holders faced significant losses again amid global market panic.

Currently, long-term holders are still acting as stabilizers, adding nearly 60,000 BTC this week, reflecting that market liquidity remains quite scarce. As of the weekend, short-term holders overall are still at a 10% floating loss level, indicating that the market is still under significant pressure.

According to relevant indicators, the Bitcoin market is currently in a rise continuation phase. Despite the turmoil in the global financial markets, Bitcoin still shows relatively stable performance, which may reflect investors' increased confidence in it as a hedging tool. However, given the uncertainty of the macro environment, investors should remain cautious and closely monitor the potential impact of global economic and policy changes on the cryptocurrency market.