BTC rise stabilizes, ETF capital injection boosts market confidence

This week, the Bitcoin (BTC) market has shown a positive trend, with the price rising from $82,562.50 to $86,092.94, a weekly increase of 4.28%. This marks the second consecutive week of growth, despite trading volume declining for three straight weeks. Currently, the BTC price is operating within a descending channel and is approaching the upper edge of the channel.

The Federal Reserve (Fed) released a dovish signal during this week's interest rate meeting, indicating that it will closely monitor the economic situation and take intervention measures if necessary. The Fed hinted that there may be two rate cuts this year, which has injected some confidence into the market.

As the U.S. stock market stabilizes, the inflow of Bitcoin spot ETF funds has significantly increased, becoming an important factor supporting the stabilization and rebound of BTC prices. Currently, BTC has reached the upper bound of the descending channel, and the market is focusing on its future trend.

Next week, the US will release personal consumption expenditures (PCE) data, which may impact the direction of BTC prices, and investors should pay close attention.

Macroeconomic Environment Analysis

On March 19, the Fed kept the benchmark interest rate unchanged as expected by the market, maintaining the key borrowing rate in the range of 4.25% to 4.5%. The Fed also hinted at a possible 50 basis point rate cut in 2025 and announced adjustments to its balance sheet reduction pace.

The Fed chairman stated that they have lowered their economic growth forecasts and pointed out that certain policies are the main factors driving up inflation. Nevertheless, the U.S. stock market, which has fallen for three consecutive weeks, is more focused on an important statement from the Fed - that if the economic situation worsens, the Fed will take action.

Starting from April 1, the Fed will slow down the pace of balance sheet reduction, adjusting the cap on U.S. Treasury bond reductions from $25 billion per month to $5 billion. This move is seen as support for the bond market. Through a relatively "gentle" response, the Fed indicates that while achieving inflation targets, it is also closely monitoring the stability of employment and equity markets to prevent a larger crisis.

Despite the economic "stagflation" risk, the market acknowledges the Fed's softened stance. Whether it is the guidance for two rate cuts or the lowering of the cap on U.S. Treasury bond reductions, both are seen as a form of support for the stock and bond markets.

As a result, although the fundamental issues remain unresolved, the declining market has begun to stabilize and rebound. The dollar index rose by 0.25% for the week. The Nasdaq, S&P 500, and Dow Jones indices rose by 0.17%, 0.51%, and 1.2%, respectively. The yields on 2-year and 10-year U.S. Treasury bonds fell by 1.59% and 1.39%, to 3.9670% and 4.2580%, respectively.

Some funds continue to choose safe-haven assets like gold. London gold has achieved a three-week rise, increasing by 1.23% this week, closing at 3023.31 USD/oz.

Cryptocurrency Market Dynamics

In terms of capital flow, the BTC spot ETF has shown positive signals. After five consecutive weeks of net outflows, this week has seen a significant net inflow, with a total of $1.05 billion flowing in over five trading days. This large-scale capital injection has become a strong support for the rebound of BTC prices.

The stablecoin market saw an inflow of $958 million over the week. Overall, the cryptocurrency market experienced a total inflow of $1.95 billion across all channels, providing significant support to the market.

The BTC spot ETF has once again demonstrated its role in stabilizing the market. However, the flow of funds into the ETF is closely related to the trends of the US stock market, making BTC price predictions more complex.

Market Supply and Demand Analysis

With the price rebound, market selling pressure has significantly weakened, dropping to 114992 BTC. Data shows that this week long-term holders reduced their holdings by 3284 BTC, while short-term holders reduced their holdings by 111709 BTC.

Long-term holders increased their positions by 73,000 coins over the week, while the exchange inventory decreased by nearly 7,000 coins. The selling pressure from short-term holders is being continuously absorbed, indicating that long-term investors maintain a positive attitude towards the current price level.

Market Cycle Indicator

According to certain engine data, the BTC cycle indicator is 0.375, indicating that the market is in a rise continuation phase.