BTC continues to rebound, the US dollar index hits a three-year low, the Fed maintains a hawkish stance.

This week, Bitcoin started at $83,733.07 and closed at $85,177.34, with a weekly increase of 1.72% and a volatility of 4.06%. This marks the second consecutive week of rebound for Bitcoin, but there is insufficient confidence in the market, leading to a significant shrinkage in trading volume. Bitcoin's price has operated outside the descending channel for two weeks in a row and is testing the important technical indicator of the 200-day moving average.

The "reciprocal tariff war" entered the "negotiation" stage in the United States. The results of preliminary negotiations with Japan were below expectations, putting the U.S. government in a predicament. Major target countries are firmly countering, while secondary target countries are also shifting to a tough stance. These countries clearly recognize that they can exchange time for space. In fact, when the U.S. declares war on the world regarding tariffs, the pressure it faces is also unprecedented.

Fed Chairman Powell delivered a speech this Wednesday stating, "At present, we are fully capable of waiting for clearer signals before considering any adjustments to our policy stance." The Fed's response to the trade war has remained unchanged, resulting in renewed "stocks, bonds, and currencies" pressure back in Washington.

At the same time, former U.S. President has repeatedly urged for interest rate cuts and has begun considering the dismissal of Powell. However, before any substantial breakthroughs occur in this action, we tend to believe that politics, the economy, and the market will first operate along a rational path in the medium to long term.

In terms of policy, macro finance, and economic data, the preliminary negotiations between the United States and Japan have not made substantial progress. On the contrary, the Japanese Prime Minister's public statements before the talks were very tough. After China's strong countermeasures, while more countries are still lining up to negotiate with the United States, they also realize that the U.S. position is not as advantageous as it claims.

Consumer confidence remains low, and the business community is confused about how to plan production. In the absence of any assistance from Washington or the Fed, Wall Street continues to sell off long positions and reduce trading.

In the four trading days this week, the Nasdaq, S&P 500, and Dow Jones indices all recorded consecutive declines, with weekly losses of 2.62%, 1.5%, and 1.33% respectively, and trading volume showed a noticeable downward trend.

The bond market is also facing difficulties. The yield on the 2-year government bond continues to drop to 3.7580%, while the 10-year yield falls to 4.4960%, still at a high level. The risks in the bond market are mainly concentrated in long-term government bonds, and last week's surge of 11.25% shows that amidst significant selling, liquidity has reached a critical state.

The US dollar index has achieved a four-week consecutive decline, dropping to 99.171% this week. Funds are flowing from the US to Europe. The decline in the US dollar index is a result of the stock market falling while the bond market has failed to absorb the outflow of funds. Fund outflows are the most undesirable situation for the US.

The statements of Powell and other Fed officials are basically consistent, believing that the economy has not yet shown signs of deterioration, but tariffs will bring great uncertainty to lowering inflation and economic development. The Fed will maintain a wait-and-see attitude until the situation becomes clearer.

The Fed's "hawkish" remarks have dispelled market fantasies of a possible temporary rate cut to boost the economy. As of the weekend, the market's expectation of a rate cut in May has fallen to 14.4%. Currently, the market leans towards the Fed making its first rate cut in June, with a probability of 70.2%, and it is anticipated that there will be four rate cuts throughout the year.

In terms of on-chain data, this week the selling pressure from both short and long positions on the chain continues to weaken, significantly decreasing compared to last week. The total on-chain selling volume for the week has dropped to 107810.75 coins, with short positions accounting for 103713.35 coins and long positions for 4097.4 coins. The outflow of funds from exchanges continues, reaching 19467.31 coins this week.

The long-hand group continues to play a stabilizing role, adding nearly 100,000 coins this week. With the price rebound, the overall floating loss level of the short-hand group is approaching 8%.

In terms of capital flow, stablecoin channels achieved the highest weekly inflow since January, exceeding $950 million. ETF channel inflows surpassed $10 million, and Bitcoin's recent performance has consistently outperformed the Nasdaq index.

According to data from a certain analysis engine, the BTC cycle indicator is 0.125, indicating that the market is in a rising continuation phase.