Tariff policies trigger turmoil Bitcoin rebounds altcoins diverge Institutional funds slightly flow out

Crypto market weekly report: Tariff policies cause market turbulence, SOL favored by payment giants.

Macroeconomic Liquidity Analysis

Recently, there have been signs of improvement in currency liquidity. The implementation of Trump's tariff policy has caused chaos, and regardless of the final outcome, it has quickly undermined market confidence in the U.S. economy, which is expected to continue disrupting the market over the next three months. U.S. Treasury bonds and the dollar have re-entered a downward trend, while U.S. stocks have experienced a historic surge. It is noteworthy that this phenomenon typically occurs in the mid-term of a bear market. The crypto market closely follows the sharp fluctuations in U.S. stocks.

Market Overview

This week, Bitcoin experienced a sharp rebound after a significant decline, while some small-cap tokens plummeted due to delisting events. The market overall lacks a clear hot topic.

Among the top 300 cryptocurrencies by market capitalization, the five with the largest increases are XCN (110%), FARTCOIN (100%), GAS (60%), LAYER (40%), and UXLINK (30%). The five with the largest decreases are BERA (40%), EOS (20%), MEW (20%), W (20%), and NEAR (20%).

It is worth noting that:

1. BERA, as a representative of DeFi public chains, has fallen below the long-term consolidation support level, setting a new low. In the past week, its on-chain stablecoins have decreased by 300 million.
2. FARTCOIN, as a meme coin in the Solana ecosystem, has seen several times growth against the market trend, becoming the leader of this round of rebound.
3. BABY is a leading staking project in the Bitcoin ecosystem, and after its listing, the market value returned to the level of 800 million USD during the last round of institutional investment. However, the concept of re-staking has been debunked by the market.

On-chain Data Interpretation

The capital inflow in the Bitcoin market has come to a standstill. Liquidity has rapidly contracted, causing the total market capitalization of altcoins to plummet from $1 trillion at the beginning of the year to $600 billion. This decline shows a universal characteristic, with all sectors experiencing significant devaluation.

Institutional funds experienced a slight net outflow, and a sense of panic pervades the global market. The market value of stablecoins has slightly declined, reflecting a clear risk-averse tendency among investors.

The long-term trend indicator MVRV-Z Score is currently at 1.6, close to the bottom range. This indicator is based on the total market cost and reflects the overall profitability of the market. When the indicator is greater than 6, it indicates a top range; when it is less than 2, it indicates a bottom range. MVRV has fallen below the key level of 1, meaning that holders are generally in a state of loss.

Futures Market Dynamics

The funding rate for this period remains at a low level of 0.00%. Generally, a rate between 0.05% and 0.1% indicates that there is more long leverage, which may suggest a short-term market top; a rate between -0.1% and 0% indicates that there is more short leverage, which may suggest a short-term market bottom.

The open interest of Bitcoin futures continues to decline, indicating that the main funds in the market are withdrawing. The futures long-short ratio is 1.9, reflecting a sentiment leaning towards greed. It is worth noting that retail sentiment is often seen as a contrarian indicator, with below 0.7 indicating fear and above 2.0 indicating greed. However, the volatility of the long-short ratio data somewhat weakens its reference significance.

Spot market performance

This week, Bitcoin prices have fluctuated dramatically, while the altcoin market lacks new narrative drivers. The uncertainty surrounding U.S. tariff policies has intensified, leading to increased pressure on global financial markets. This weakness has spread to almost all asset classes, and the crypto asset market is no exception to this bear market.