Given the flurry of negative news this week, Bitcoin’s performance has been largely flat over the past five days, trading around $63,800, with price volatility having lasted for about two months since Bitcoin broke through its all-time high in early March.
Currently, Bitcoin’s price action still lacks a clear direction, with no oscillations with strong momentum in any direction. Bitcoin is relatively stagnant in its attempt to establish a long-term trend and needs a period of consolidation.
While the $60,000 level is crucial for support, any break below could see the price quickly fall towards the $52,000 level - an area that has previously acted as both support and resistance, indicating its importance. On the upside, if Bitcoin can break above $67,000, it could potentially reach the top of the range around $74,000. But right now, it really can’t be bearish as it has the potential to suddenly rise.
Bitcoin Spot ETF
From the past period of time, the largest net outflow of Grayscale is often at the stage bottom. As of the close of this week, the outflow of Bitcoin spot ETF has weakened, which is good for the market - Coinbase closed up 5.68% on Friday, which also illustrates this point.
Regarding the view on Bitcoin spot ETF:
Samourai Wallet Sued by the US Department of Justice
The FBI and IRS Criminal Investigation announced Thursday that they arrested Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill, charging them with conspiracy to launder money and conspiracy to operate an unlicensed money transmitting business, respectively. The charges carry a maximum sentence of 20 and 5 years in prison, respectively.
Samourai Wallet offers a service called a “mixer”; it allows users to batch transactions to increase the privacy of their on-chain activities — where decentralized privacy goes from here.
Bitcoin Cycle Bull Market Retreat
Bitcoin has shown some resilience this week given the hostility of regulators and poor macroeconomic data, and is currently trading about 12% below its all-time high. The chart below shows how insignificant this drawdown is in the grand scheme of things. Pullbacks of this magnitude are common in bull markets, and without volatility, the adoption of the halving monetary system will not happen.
US GDP growth slows
The U.S. first-quarter GDP report released this week showed an annualized growth rate of 1.6%, far below expectations. This is the second consecutive quarter of slowing U.S. GDP growth and the lowest growth rate since the second quarter of 2022.
Although the Fed's inflation indicator CPI is still high, growth is still slowing. It has not reached the level the Fed dreams of. The US economy seems to be inevitably heading towards stagflation - the last thing the Fed wants to see.
US core PCE price index beats expectations
Core PCE, the Fed’s preferred inflation measure, came in above consensus at 2.6% in March (the Fed expected 2%), in line with February’s 2.8%. Headline PCE came in at 2.7%, beating expectations at 2.6%.
The March PCE data was the latest in a string of higher-than-expected inflation readings through 2024, supporting the dollar and forcing the Federal Reserve to recalibrate its forecasts.
Treasury yields have soared as investors dumped bonds as economic data was released. 2024 has been a bad year for bonds so far, with both the 2-year and 10-year Treasury yields hitting new cycle highs.
The market currently expects less than two 25 basis point rate cuts from the Fed for the rest of the year, with the first cut delayed to September or even November. However, due to the presidential election, a November rate cut has been largely ruled out, as the Fed is reluctant to adjust interest rates so close to an election to show its independence from politics.
Yen falls to multi-decade low
The yen hit a fresh multi-decade low against the dollar after the Bank of Japan is expected to decide to keep interest rates unchanged - the latest catalyst for the yen's decline was weaker-than-expected inflation data from Tokyo, which further cemented the Bank of Japan's accommodative stance.
Performance of miners’ income after Bitcoin halving
It’s been a week since the Bitcoin halving, and Bitcoin miner revenues are performing well. Earlier this week, miners hit a record high in daily revenue thanks to the Runes protocol (a protocol for storing ordinals and inscriptions of arbitrary data using Bitcoin’s OP_RETURN command), and revenues are now normalizing. Concerns about blockchain clogging have also eased.
A temporary surge in block space demand and a sharp spike in the cost of moving Bitcoin to the base layer has put the need for L2 scaling solutions back in the news. Personally, we are bullish on the Bitcoin Lightning Network.
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《Small capital, big returns, one fish, eight meals, airdrop strategy guide (Part 1)!》
Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
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