Crypto Assets Market Weekly Report: Favourable Information from Policies Drives a Comprehensive Rebound

Since March, the global financial markets have been heavily affected by trade frictions. Market participants are mainly focused on the progress of trade negotiations and their impact on asset allocation, consumer confidence, economic expectations, and corporate profits.

This week, with the preliminary agreement reached between the US and the UK and the completion of the first round of contacts between the US and China, trade negotiations have entered a new phase. This progress has driven a significant Rebound in the stock market and the crypto assets market. The S&P 500 index has recovered from previous losses, and Bitcoin (BTC) has performed even stronger, approaching previous highs.

Under the stimulation of favourable information, other crypto assets represented by Ethereum (ETH) have also seen significant increases. The weekly increase of ETH reached 39.01%, setting a new high for this cycle. Data shows that the market for small coins has already opened.

Macroeconomic and Policy Trends

On May 8th, the leaders of the United States and the United Kingdom announced the conclusion of the "Economic Prosperity Agreement", which lowers some tariffs and opens up market access. This move is seen as a preliminary success in trade policy, and the market believes that similar agreements may serve as a reference for other countries. This judgment boosted investor confidence and drove the market rebound.

In addition, the trade representatives of the US and China held their first public meeting in Switzerland. Both sides stated that they have made "substantive progress." Despite poor investigation data, the economic and employment data in April were relatively stable, and the earnings reports from large tech companies generally met expectations, providing support for the stock market rebound.

In terms of Crypto Assets policy, New Hampshire and Arizona have successively passed bills allowing state governments to purchase Bitcoin. This breakthrough may trigger more states to follow suit, and related policies at the federal level may be put on the agenda.

Crypto Assets market performance

BTC has risen 10.46% again this week, continuing the upward trend of the previous 4 weeks. Technically, BTC has broken through multiple moving average resistance levels and returned to the upward channel. This indicates that the market has largely digested the negative impact of trade frictions, and the medium to long-term trend is expected to reverse.

In the next stage, BTC will face pressure at the $11,000 threshold. After breaking through this position, it is expected to challenge the historical high.

It is worth noting that other cryptocurrencies such as ETH have also seen significant increases this week. If this trend continues, it may indicate a full recovery of market liquidity.

Capital Flow Analysis

This week, stablecoins and BTC spot ETFs attracted a total of $944 million in capital inflow, providing strong support for the market's rise. In 7 trading days, 6 days recorded positive inflow, reflecting investors' willingness to actively enter the market.

In addition, the leverage funds in the market have also begun to increase, with both borrowing rates and interest rates rising, indicating that risk appetite is on the rise.

Market Sentiment and Position Analysis

After the previous adjustments, the market chip structure has been optimized. Despite rising for five consecutive weeks, the selling pressure on BTC is gradually easing, indicating an increase in reluctance to sell. This creates conditions for a breakthrough to new highs in the future.

From the perspective of the holding group, as prices rebound, long-term holders have started to slightly reduce their holdings, while new short-term investors are scrambling to buy in. Large institutional investors continued to increase their holdings by over 56,000 BTC this week.

Currently, short-term holders have a slight profit of over 10%, with only 2% of the chips in a loss state, indicating that the market is overall in a relatively safe position. This creates favourable conditions for BTC to break through the previous high.

Cycle Indicator

According to a data platform, the BTC cycle indicator is 0.75 and has re-entered the upward phase.