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BTC experiences the second largest weekly fall of this cycle, US Non-farm Payrolls (NFP) data stabilizes the US stock market.
BTC fell 14.39% this week, marking the second largest weekly drop of this cycle.
This week, BTC opened at $94,265.47 and closed at $80,699.17, down 14.39% for the week, with a volatility of 15.29%. Trading volume decreased compared to last week but remained high. The BTC price fell below the $89,000~$110,000 range, significantly retracing previous gains.
The BTC market has experienced significant fluctuations in the past two weeks. On one hand, with the repeated tariff policies, U.S. stocks began to trade on "recession" expectations, retracing most of the previous gains, leading to a large outflow of funds from BTC-related ETFs. On the other hand, the emergence of some positive policy signals, such as a certain state passing BTC reserve legislation, indicates that the application scenarios and policy environment for crypto assets in the U.S. are improving.
However, investor sentiment dominated the short-term price trend. As U.S. stocks corrected, BTC plummeted 14.39% this week, marking the second largest weekly drop in this cycle. Although it did not fall below the low point of February 28, it has breached multiple important support lines. The Fear and Greed Index has fallen back to "Extreme Fear" at 20 points.
After the release of non-farm payroll data and the speech by the Federal Reserve Chairman on Friday, US stocks showed a rebound and temporarily stabilized. However, the medium to short-term trend remains difficult to be optimistic about, and attention needs to be paid to tariff policies and the trends of US economic data. BTC's performance will continue to be constrained by the performance of the US stock market and is temporarily difficult to break away from the overall market to create an independent trend.
Macroeconomic Data Analysis
The U.S. employment data released on Friday showed that the market continues to slow down. In February, non-farm payrolls increased by 151,000, slightly below expectations; the unemployment rate unexpectedly rose from 4% to 4.1%, hitting a nearly 4-month high.
The Federal Reserve Chairman subsequently stated that despite the uncertainties, the current economic situation in the United States is generally good, with a robust and balanced labor market. He believes that there is no need to rush to adjust the policy interest rates at this stage, and patience is advised until the situation becomes clearer. At the same time, he pointed out that they are assessing the impacts of changes in trade policies, which have indeed increased economic uncertainty.
This statement essentially continues the Federal Reserve's consistent stance. However, possibly in response to market concerns about a recession, he also released some dovish signals. He indicated that if the economy remains robust while inflation does not further decline, the Federal Reserve may maintain the current interest rate levels. But if the labor market unexpectedly weakens or inflation drops significantly, the Federal Reserve will consider resuming rate cuts.
Based on signs of weakening economic data and adjustments in the stock market, the market expects the Federal Reserve to cut interest rates 3 times this year, by about 75 basis points.
As a result, the US dollar index fell by 3.52% for the week, closing at 103.882. The Nasdaq rebounded on Friday, closing above the annual line, while the S&P 500 closed above the 200-day line. US Treasury yields rose slightly.
The non-farm data on Friday slightly improved the expectations that traders had previously significantly downgraded. However, concerns about a recession or stagflation in the U.S. economy have not been eliminated, and more economic data is needed to guide the future market direction.
Technical Analysis
Compared to the US stock market, BTC has maintained relative strength, with the current price still about 15% higher than early November last year.
From a technical perspective, the BTC trend remains pessimistic. It has fallen out of the $89000~$110000 range and is operating below the first trend line of the bull market. Since the historical high on January 21, BTC has formed a descending channel, repeatedly suppressing rebounds.
On Sunday evening, the bears launched another attack, and BTC fell sharply below the 200-day moving average again. The intensity of this adjustment and weak performance is similar to the market performance from July to September last year. The market is currently in an extremely oversold state in the short term, but it may require more external conditions and time to recover from the downturn.
Selling Pressure Analysis
After last week's panic selling, the selling pressure has significantly decreased this week. Long and short-term holders have sold a total of 147,351 BTC, returning to previous normal levels. However, the exchange inventory has increased by more than 5,000 BTC, indicating that although the selling pressure has diminished, the buying power is still insufficient.
On-chain data shows that the overall market floating profit rate is 198%, long-term holders are at 347%, and short-term holders are at a floating loss of 6%. Short-term holders continue to face pressure. In a bull market, short-term holders being in a floating loss state is often a good opportunity for mid-term entry.
Capital Flow Analysis
Compared to a net outflow of 4.081 billion in the dual-channel last week, the pressure this week has eased to some extent, with a total inflow of 1.295 billion USD. Among them, stablecoins inflowed 2.107 billion USD, while BTC spot ETF outflowed 719 million USD. The outflow of funds from the ETF channel is the main source of selling pressure that led to the market fall.
In February, the US BTC spot ETF experienced the largest outflow since its approval, reaching $2.3 billion. As we entered March, the outflows continued but at a reduced scale. The outflow group includes retail and institutional investors' sell-offs, as well as futures arbitrage traders closing their positions. From a transmission perspective, for BTC prices to stabilize, the US stock market needs to stabilize first, and ETF holders need to shift from net outflows to net inflows.
Cycle Indicators
According to the BTC cycle indicators from a certain data platform, the current indicator is 0.375, indicating that the market is in an upward continuation phase.