Crypto Market Weekly Report: BTC Hits New High in USD, Market Adjustment May Be Approaching

Recently, the crypto market has experienced a significant rise, with the price of Bitcoin (BTC) breaking its historical high, setting a new record of $112,000. This upward trend is mainly driven by several factors, including a substantial inflow of funds into spot ETFs, increased holdings of Bitcoin by listed companies, and a favorable regulatory environment.

However, the global financial market is facing new challenges. The advancement of a significant fiscal bill in the United States has raised concerns in the market about the U.S. debt issue, leading to a "triple kill" situation in the U.S. stock market, bond market, and forex market. This change in the macroeconomic environment may have spillover effects on the crypto market.

Macroeconomic Situation

The US House of Representatives recently approved a comprehensive fiscal bill involving multiple sectors. The bill proposes to raise the US debt ceiling to $40.1 trillion, which would increase the ratio of US debt to GDP to 140%, a historic high.

This move has raised concerns in the market about the U.S. government's ability to repay its debts, leading to a rise in the yield on 10-year U.S. Treasury bonds to a high of 4.5%. Elevated bond yields may suppress investment and consumption, thereby affecting corporate profits.

As a result, the three major U.S. stock indices all fell this week, with the Nasdaq index down 2.47%, the S&P 500 index down 2.61%, and the Dow Jones Industrial Average down 2.47%. The U.S. dollar index also ended its previous four-week streak of gains, falling 1.03% to 99.1252.

In this uncertain environment, gold has once again become a safe-haven asset. London gold rose by 1.98% this week, reaching $3359.90 per ounce.

Crypto Market Performance

Despite the complex macroeconomic situation, Bitcoin has maintained a strong upward momentum, achieving a consecutive 7-week rise. Earlier this week, the price of Bitcoin broke through the $110,000 mark, setting a new historical high in USD pricing.

From a technical perspective, the price of BTC has been operating above the 5-week moving average throughout the week, with an increase in trading volume, and the weekly MACD indicator has just broken through the zero line. The price is currently above the rising trend line and has tested the important resistance range of $90,000 to $110,000.

Although Bitcoin is still in a medium-term upward trend, considering the recent significant rise and macroeconomic uncertainties, the market may experience a short-term adjustment.

Improvement of Regulatory Environment

It is worth noting that the cryptocurrency industry has made positive progress in regulation. The U.S. Senate passed a procedural vote by a margin of 66-32, paving the way for the establishment of a regulatory framework for stablecoins. This legislation, known as the "Genius Act", will provide clear definitions, regulatory requirements, and asset backing standards for USD stablecoins.

At the same time, the Hong Kong Legislative Council also passed the "Stable Coin Ordinance Draft," establishing a comprehensive licensing and regulatory framework for stablecoins linked to fiat currencies.

These regulatory developments indicate that, in addition to BTC, decentralized applications (DApps) based on smart contract platforms and the Web3 ecosystem are also being recognized by governments around the world, which is of significant importance for the development of the entire blockchain industry.

Capital Flow Analysis

Despite the volatility in traditional financial markets, the trading enthusiasm in the crypto market seems to have remained largely unaffected. Over the past week, the market has continued to see a net inflow of funds, totaling $5.574 billion. Among them, stablecoins accounted for $2.548 billion, Bitcoin spot ETFs for $2.775 billion, and Ethereum spot ETFs for $0.250 billion.

However, as the price of BTC reaches new highs, some long-term holders are beginning to show signs of profit-taking. This week, the number of BTC flowing into exchanges increased to 159869.37, marking the first large influx in recent weeks. Nevertheless, the total amount of BTC on centralized exchanges continues to decrease, currently falling to 2987307, although the rate of decrease has slowed.

Market Outlook

In summary, although the price of Bitcoin has reached new highs, the market may soon face a short-term adjustment. The uncertainty of the macro economy, profit-taking by long-term holders, and overbought signals from the technical aspect all suggest a possible pullback.

However, in the medium to long term, the fundamentals of the crypto market remain strong. Improvements in the regulatory environment, continuous inflows of institutional funds, and the approaching Bitcoin halving event may all provide ongoing support for the market.

Investors should remain vigilant and closely monitor market trends while managing risks effectively. At the same time, they should pay attention to changes in the global macroeconomic situation, especially the developments regarding the US debt issue, as this could have a profound impact on the entire financial market.