The crypto market is experiencing severe fluctuations, Bitcoin is rebounding while altcoins are falling. Beware of the bear trap.

Macroeconomic Situation and Market Trends

This week, the cryptocurrency market has experienced severe fluctuations due to multiple factors. The uncertainty surrounding Trump's tariff policies casts a shadow over the outlook for the U.S. economy, with U.S. Treasury bonds and the dollar returning to a downward trend, while U.S. stocks have shown an unusual rise. The cryptocurrency asset market has followed the overall market's fluctuations, showing a generally sluggish performance.

From a macro perspective, there are signs of improvement in currency liquidity. However, the chaotic implementation of tariff policies has shaken the market's confidence in the U.S. economy, and this impact may persist in the coming months. It is worth noting that rebounds in the U.S. stock market often occur in the mid-stage of a bear market, so caution is still warranted.

In terms of overall market trends, Bitcoin has experienced a rebound after a significant decline, while some small-cap tokens have plummeted due to delisting risks. The market generally lacks clear hot themes. Among the top five tokens in terms of gains, XCN leads with a 110% increase, followed closely by FARTCOIN with a 100% rise. On the downside, BERA has faced a severe drop of 40%, while EOS and MEW both fell by 20%.

It is worth noting that BERA, as a representative of DeFi public chains, has fallen below its long-term support level, with its on-chain stablecoin scale decreasing by 300 million US dollars in the past week. In contrast, FARTCOIN, as a meme coin in the Solana ecosystem, has surged several times against the trend, becoming the leader of this round of rebound. In addition, after the listing of the BTC ecological staking project BABY, its market value has returned to the 800 million US dollars level of the last round of institutional investment.

From on-chain data, the capital inflow into the Bitcoin market has stagnated. Liquidity is rapidly shrinking, causing the market capitalization of altcoins to shrink from $1 trillion at the beginning of the year to around $600 billion. This wave of decline seems to have affected all sectors, showing a general characteristic. Institutional funds have seen a slight net outflow, and a sense of panic pervades the global market. The market capitalization of stablecoins has also seen a slight decline, reflecting a clear increase in investors' risk aversion.

The long-term trend indicator MVRV-ZScore shows that the current market is at a level of 1.6, approaching the bottom range. This indicates that holders are generally in a state of loss, but it also means that the market may be nearing a bottom.

In the futures market, the funding rate remained at a low of 0.00% this week. The open interest for BTC futures continues to decline, indicating that the main capital is withdrawing from the market. The long-short ratio for futures reached 1.9, reflecting a market sentiment leaning towards greed, but the reference significance of this indicator has weakened.

In the spot market, Bitcoin experienced significant volatility this week, while altcoins generally lacked new investment narratives. The uncertainty of U.S. tariff policies has intensified pressures on global financial markets, and this weakness has spread to almost all asset classes, with the cryptocurrency market also unable to escape.

Overall, the current cryptocurrency market is in a bearish cycle, with various indicators showing a sluggish market sentiment. However, some technical indicators are nearing the bottom range, and investors need to closely monitor the macroeconomic situation and policy changes to seize potential market reversal opportunities.