Yi Hai Lun Bi writes each analysis article with a responsible, focused, and sincere attitude, with distinctive features that are not pretentious or exaggerated!
Daily market analysis, I am digital currency analyst Yi Hai Lun Bi!
Recent articles have consistently emphasized following the trend. Continuous consolidation will dominate current market sentiment. Whether new friends or old friends, I once again emphasize to let go of speculative psychology and not to go against the market. The opportunity I provide is only once. If you can only stay at a stage of saying one thing and doing another, then the connection can only remain at this current stage. I understand everyone's feelings. Friends who have known me for a long time know that a forced situation does not yield sweet results. Choosing me is not just a responsibility but also a friendship. Back to the market movements, the recent weekend trends do not seem to be as quiet as before. BTC once climbed to $86,000. The trade war between us and the U.S. continues to escalate, with both sides raising tariffs to over 100%. We no longer respond to the U.S. tariff sanctions, and Trump ultimately exempted tariffs on electronic products such as smartphones and computers, excluding these products. In addition to the 125% tariffs imposed by Trump on us and the 10% baseline tariff imposed on almost all other regions, these electronic products are typically not manufactured in the U.S., and establishing manufacturing facilities in the U.S. will also take several years.
This week, BTC has had a tumultuous path, dipping below $75,000 twice. Due to the continuous rise in U.S. Treasury yields, some actions by Trump have also alleviated the tension. The customs tariff system in the U.S. resumed operation after being down for over 10 hours, restarting the imposition of new tariffs. However, this delay may have provided a buffer for the market, reducing market volatility caused by the trade war. Currently, the market has not seen a decline because of this; instead, it has provided better pricing. From a weekly perspective, BTC has now moved away from a very dangerous area. The 50-week moving average has been tested for the third consecutive time. This week saw multiple breaches, but it seems to have stabilized. I mentioned yesterday that if we want to establish a further bullish trend, the 200-day moving average needs to be successfully surpassed. From my perspective, this is an early signal of a trend reversal.
Recently, I have been focusing on the range of $81,300 to $83,500. Currently, BTC has withstood the selling pressure in this area and achieved more rebounds. Both March's CPI and PPI showed a surprising cooling, but the market's prior response was rather lukewarm. The impact of Trump's tariff adjustments has not fully manifested in inflation data because most of the tariff measures took effect only in early April. The actual transmission process of prices has a lag, which is expected to gradually reflect in the prices of consumer goods over the coming weeks to months. Therefore, the market believes that the improvement in U.S. inflation data in March is not sufficient to form a trend judgment. The market has not shown an overly strong reaction because the core expectation of funds does not focus on the current or past inflation levels, but rather on inflation pressures in the coming weeks or even months, given that the new tariffs are continuously fermenting, which may ultimately trigger a chain reaction. The market has realized that the low inflation rate currently observed may not be sustainable. Once the new round of import tariffs fully reflects on both the production and consumption sides, price pressures will quickly rebound. This is also why there is a misalignment between market participants' behaviors and the data.
Secondly, the sell-off of U.S. Treasuries has made Trump feel endangered. Even some Federal Reserve officials have hinted that they will take action when necessary. JPMorgan's CEO also believes that the scale of turmoil in U.S. Treasuries is significant enough to require direct intervention from the Federal Reserve. A few years ago, during the flash crash of U.S. Treasuries, we witnessed the real consequences of a systemic crisis, which forced the Federal Reserve to initiate massive liquidity injections and directly buy U.S. Treasuries to barely stabilize the market. Now, the key point is that as the supply of U.S. Treasuries continues to expand and interest rates remain high, financial institutions are facing increased asset-liability pressure, leading to high volatility, low absorption, and a strategy-dependent state in the entire U.S. Treasury market. Once faced with external shocks, such as liquidity tightening, overseas institutions holding firm, or fiscal deficits expanding further, structural disruptions can easily be triggered, leading to more extreme speculative behaviors. The market is not buying U.S. Treasuries because they are optimistic about the fundamentals, but rather because everyone believes that the Federal Reserve cannot bear the consequences of a systemic collapse and will intervene at critical moments.
Although inflation-related data has cooled, concerns about future inflation rising have led to an increased probability that the Federal Reserve will not lower interest rates in June, but the probability of a rate cut still exceeds 68%. The next important date is May 7, when the Federal Reserve holds a meeting. If it maintains a more cautious stance, the current optimistic market expectations will also be altered. However, from the perspective of global M2 money supply, BTC is expected to recover. As mentioned in yesterday's article, BTC has basically completed its downward journey, and expectations for liquidity expansion are gradually strengthening. One of the main driving factors is the decline in the dollar index, which has already reached a three-year low. Naturally, the global liquidity index measured in dollars will form higher peaks. Looking back, the dollar index and BTC have shown opposite trends in the overall direction. Now that the dollar is continuously falling, once uncertainties are gradually eliminated, market risk appetite tends to rise, which also constitutes a favorable condition for BTC. The global M2 money supply retreated to a short-term low on January 18. Whether it is the 10-week, 12-week, or 108-day lagging effects, BTC seems to be able to see positive performance overall in the second quarter. Moreover, the M2 money supply has reached a new high, indicating that BTC is not only capable of recovering to $100,000 but also has a significant probability of reaching new highs in the second quarter.
Meanwhile, I just saw news that the White House is seriously considering using America's gold reserves to exchange for BTC, not with dollars or bonds, but using the gold assets held by the Federal Reserve to directly convert into BTC through some budgeting method. However, this vague statement should not be viewed with too much expectation. From my perspective, it seems more like a multilateral smokescreen. Previously, I wrote an article specifically analyzing the offensive logic of the market and the strategies used by market makers. That's why I say there’s no need to over-interpret the White House's move to exchange gold for BTC. Logically, we can view the White House as the market maker, whose purpose is to instill confidence in retail investors and ultimately achieve a harvest. For America, the goal is to harvest from the entire world. If they really want to buy, the best choice would be to buy directly without making a big announcement. How would you choose? Of course, this is also an analysis from a rational perspective. So, there’s no need to over-interpret this matter. Looking at the overall performance of the second quarter, even if this news does not ultimately materialize, it will not constitute a clear negative impact. However, if it does materialize, it will only be more positive. From my perspective, I can only say it’s negligible; just enjoy the excitement.
Looking back at the current situation, long-term holders are still continuously accumulating BTC, and this group will not change their original offensive strategy due to short-term price fluctuations. BTC whales are also continuously increasing their holdings, and the movement of BTC accumulation addresses is crucial. These addresses are characterized by only receiving BTC but never sending it out, representing typical production line investment funds or institutional-level wallets. Large-scale funds buy on dips, while short-term holders choose to sell due to emotions. This is also the inherent operating mode of the market. All of this provides better support for BTC. Coupled with the forthcoming liquidity boost and the weakness of the dollar, these constitute predictable favorable conditions unless there are greater uncertainties and the market's preference for risk assets withdraws. As long as the overall direction does not change, my strategy will focus on maintaining offense around pullbacks and seeking progress while ensuring stability. For speculative players, please consider carefully. Currently, the article has not yet been published, but BTC has already seen a certain pullback. For some friends, this has been viewed as a risk; the depth will be controlled within a conservative range. However, I do not recommend that shorts take action again, which does not mean you can blindly go long. My strategy requires high position management, so anyone with ideas should communicate with me in advance!
Yi Hai Lun Bi: The success of investment depends not only on selecting good targets but also on when to buy and sell. Preserving principal and doing proper asset allocation is essential for steady progress in the ocean of investments. Life in this world is like a long river flowing into the sea; what determines victory or defeat is never just the gains and losses at a single pass or moment, but the confluence of many streams!
The article is purely personal opinion and does not constitute any trading advice. The cryptocurrency market is risky, and investment should be approached with caution!
