Signs of market adjustment are emerging, Bitcoin may take a short break after reaching a historic high.

Recently, the global financial markets are once again facing challenges. Concerns arising from the U.S. debt ceiling issue, coupled with the potential escalation of trade frictions, have put pressure on the U.S. stock, bond, and currency markets simultaneously. However, the cryptocurrency market seems to have temporarily remained independent of these macro factors, maintaining relatively strong performance.

Macroeconomic Environment

The U.S. House of Representatives recently approved a comprehensive fiscal bill involving multiple sectors. The bill proposes to raise the U.S. debt ceiling to $40.1 trillion, which would bring the U.S. debt-to-GDP ratio to 140%, a historic high. The market has raised more doubts about the U.S. government's ability to service its debt, leading to a decline in the attractiveness of U.S. Treasury bonds.

As a market response, the yield on 10-year U.S. Treasury bonds has risen to around 4.5%. This may increase borrowing costs for businesses and consumers, thereby suppressing investment and consumption, ultimately affecting corporate profitability.

As a result, the three major U.S. stock indices all experienced declines this week, with the Nasdaq, S&P 500, and Dow Jones indices falling by 2.47%, 2.61%, and 2.47% respectively. The U.S. dollar index also ended its previous streak of gains, dropping 1.03% to 99.1252 during the week. In contrast, gold, as a safe-haven asset, performed better, with London gold rising 1.98% to $3359.90 per ounce over the week.

Cryptocurrency Market Performance

Despite the pressure on traditional financial markets, Bitcoin has continued its strong momentum, achieving a seventh consecutive week of gains. Against the backdrop of increasing global economic uncertainty, Bitcoin has broken through its historical high, briefly reaching 112000 dollars.

From a technical perspective, Bitcoin has been trading above the 5-week moving average throughout the week, with an increase in trading volume, and the weekly MACD indicator has just turned positive. The price is operating above the first upward trend line and has tested the upper boundary of the $90,000 to $110,000 range. Overall, Bitcoin is still in a medium-term upward trend, but considering the recent significant increase, a correction may occur in the short term.

Policy Trends

The U.S. Senate passed a procedural vote on a stablecoin regulatory framework with a vote of 66-32, marking an important step for the U.S. in cryptocurrency regulation. The bill clarifies the definition of dollar-backed stablecoins, regulatory requirements, auditing standards, consumer protection measures, and underlying asset requirements.

At the same time, the Hong Kong Legislative Council also passed the "Stablecoin Regulatory Framework Bill", establishing a comprehensive licensing and regulatory framework for stablecoins pegged to fiat currencies. These policy advancements indicate that, in addition to serving as a store of value, decentralized applications based on blockchain technology are gradually gaining recognition from governments around the world, which is of significant importance for the development of the entire industry.

Fund Flow Situation

Despite the impact on traditional financial markets, the enthusiasm for trading in the cryptocurrency market remains high. Over the past week, the market has continued to see a net inflow of funds, totaling 5.574 billion USD. Among them, stablecoins saw an inflow of 2.548 billion USD, Bitcoin spot ETFs saw an inflow of 2.775 billion USD, and Ethereum spot ETFs saw an inflow of 250 million USD.

Since early April, capital inflows have driven the price of Bitcoin to break through the $100,000 mark. However, as the price approaches historical highs, some long-term holders have begun to reduce their holdings. This week, the number of Bitcoins flowing into exchanges reached 159,869.37 coins, indicating a certain willingness to take profits. Nevertheless, the Bitcoin reserves on centralized exchanges continue to decline, dropping to 2,987,307 coins, although the rate of decline has slowed.

Market Outlook

Although Bitcoin has performed strongly, there have also been some signs of market adjustment. Long-term holders have begun to reduce their holdings near the new highs, with a total reduction of 1195.43 coins during the week. This may indicate that the market will enter a period of adjustment in the short term.

According to eMerge Engine data, the EMC BTC Cycle Metrics indicator is 0.75, in an upward phase. This indicates that although there may be short-term adjustments, the medium to long-term upward trend remains intact.

Overall, against the backdrop of increasing uncertainty in the global economy, Bitcoin has shown strong resilience. However, investors should remain cautious of potential short-term corrections, while also paying attention to the developments of macro factors such as the U.S. debt issue and global trade relations.