Rebounding against the trend by 11.24%, Bitcoin's movement significantly diverges from the macro financial environment | Latest Bitcoin market analysis | Cryptocurrency | Virtual Assets

Surprisingly, as the Middle East crisis further intensified and the blockade of the Strait of Hormuz caused a sharp spike in oil prices, the US Dollar Index, and the 10-year US Treasury bond yield, $Bitcoin (BTC.CC)$ prices moved against the trend and achieved gains.

This movement shows clear structural tension: On one hand, the global macro environment has not provided liquidity support, with interest rates and the dollar rising simultaneously and risk assets under overall pressure; on the other hand, within the crypto market, there has been spot buying driven by stablecoin expansion and continuous net inflows into ETFs, which, after sustained selling fatigue, drove prices to soar despite macro headwinds.

This combination means that this week’s $Bitcoin (BTC.CC)$ price action was not driven by improved macro liquidity but more closely resembles an independent price movement brought about by changes in the internal capital structure of the crypto market.

The subsequent trend will depend on whether the macro financial environment deteriorates further. If it does, it will further compress $Nasdaq Composite Index (.IXIC.US)$ and $Bitcoin (BTC.CC)$ the valuation space for high-duration assets like these, as well as the balance between buying power and selling pressure within the market.

Macro finance

This week’s macro signals presented a typical combination structure of 'weakening growth momentum but sticky inflation.'

The employment sector has clearly cooled. Non-farm employment shifted from previous growth to net reductions, significantly below market expectations, indicating that labor demand is marginally slowing—a change that typically means economic growth momentum is beginning to weaken. At the same time, the University of Michigan Consumer Sentiment Index slightly retreated, showing households remain cautious about future economic conditions and demand-side expectations have yet to recover.

Inflation did not fall significantly in sync. Both CPI and Core CPI remained within relatively stable ranges, while Core PCE even rose slightly. Compounded by the Middle East crisis pushing oil prices higher, CPI and PCE data are expected to be stickier, or even rebound sharply. This implies that the Fed lacks room for a rapid shift toward an accommodative rate-cutting policy path.

This combination made it difficult for the market to trade on the logic of 'economic slowdown → quick rate cuts,' instead repricing the possibility of 'economic cooling with prolonged high interest rates.' The result was:

• Short-term rates increased, reflecting a re-tightening of policy rate expectations.

• Long-term rates also rose in tandem; inflation will remain elevated, raising asset discount rates.

• The US Dollar Index strengthened, tightening global dollar liquidity at the margin.

The simultaneous rise in short- and long-term rates means financing costs and valuation discount rates both increase, pressuring growth-oriented and high-volatility assets.

Risk asset performance confirmed this trend. Major U.S. indices fell overall this week. $Nasdaq Composite Index (.IXIC.US)$ On Friday, they broke below the key 200-week moving average for the first time this year, signaling that the market did not view weak employment as a liquidity-positive factor, but rather worried more about the worsening blockade of the Strait of Hormuz leading to 'sluggish growth but difficulty in swift policy easing' stagflation-like constraints. Risk appetite thus declined.

From the perspective of the macro transmission chain, this week's pricing logic can be summarized as: weakening growth → sticky inflation limiting easing → rising interest rates and a stronger US dollar → pressure on risk assets.

Within this framework, the macro backdrop faced by Bitcoin is not a supportive environment but rather closer to restrictive financial conditions.

Cryptocurrency market

However, compared with $Nasdaq Composite Index (.IXIC.US)$ a 1.26% weekly decline nearing a technical bear market, $Bitcoin (BTC.CC)$ this week saw an 11.24% rise (March 8 - March 14), showing clear divergence.

Prices achieved significant gains within a week, accompanied by a noticeable increase in trading volume during key breakout phases. This simultaneous expansion in price and volume typically indicates real buying power consistently stepping in during price breakouts, rather than passive price rises due to thin liquidity.

In terms of capital sources, the most important change comes from the continued inflow of off-exchange capital. $Bitcoin (BTC.CC)$ ETFs recorded continuous net inflows of $777 million throughout the trading week, while stablecoin supply increased significantly by $2.056 billion. The simultaneous rise of these two indicators suggests that both on- and off-exchange funds are flowing in the same direction. DAT companies also made large-scale purchases two weeks ago, likely continuing last week.

This combination is crucial, indicating that the current rally is not driven by existing funds rotating within the market but rather by external purchasing power entering the market, leading to price expansion.

Although the derivatives market participated in the price action, it did not become the dominant variable. The rise in open interest indicates that leverage participation has increased somewhat; however, the funding rate remains neutral or even slightly negative, without a significant increase alongside the price rise. This suggests that the market has not formed a crowded long-leveraged structure. On the contrary, the derivatives market appears to be more driven by spot market movements, with price breakouts passively amplifying gains through short squeezes.

The on-chain profit structure also supports this assessment. The overall MVRV ratio is within a moderate profit zone but remains significantly distant from historical overheating levels. More critically, short-term holders have not yet fully broken even, indicating that the market has not entered a broad phase of realized profits. In this structure, new positions are absorbed more by marginal buyers rather than distributed en masse by long-term holders.

Overall, the internal structure of the crypto market this week can be defined as: inflow of new capital → spot-driven price increase → leverage participation without overheating → long-term holders yet to distribute.

After months of loss-induced selling, selling pressure shows signs of fatigue, with sell volumes decreasing for three consecutive weeks. Stop-loss selling continues but its scale is also beginning to decline. As one side weakens, the other gains strength, and exchange $Bitcoin (BTC.CC)$ balances declining indicate that after months of brutal sell-offs, new buying power has temporarily gained the upper hand.

Market Essence

The divergence between the macro environment and the internal structure of the crypto market is the most noteworthy core feature of this week's $Bitcoin (BTC.CC)$ market movement. The driving force behind this week’s $Bitcoin (BTC.CC)$ price action is not macro liquidity but rather internal capital allocation behavior within the crypto market.

According to the 'EMC Labs BTC Cycle Analysis Model,' Bitcoin (BTC) remains in the ambiguous zone between a deep bear market ‘bottoming out’ and ‘mid-decline.’ Large-scale selling has already occurred, and the market as a whole still suffers from significant losses. Long-term holders are still in the early stages of being cleared out, and overall token turnover remains far lower than in previous cycles.

We maintain our judgment that the market is currently in a deep bear market. This week’s upward movement is essentially a short-term rebound after an oversold condition during the 'bottom probing' and 'mid-downtrend' process, similar to the situation in early January.

Market Outlook

For the coming period, $Bitcoin (BTC.CC)$ the trend will mainly depend on the evolution of two key variables.

The first variable is whether capital inflows within the crypto market can be sustained. If ETFs continue to see net inflows while stablecoin supply keeps expanding, then even if the macro environment remains neutral or slightly tight, Bitcoin may still maintain its upward trend relying on internal capital structures.

The second variable is whether macro financial conditions tighten further. If the US dollar continues to strengthen, long-term interest rates rise further, and this leads to a more pronounced contraction in risk appetite across global risk assets, Bitcoin will struggle to escape the impact of external liquidity pressures.

Therefore, the key points for short-term market observation include:

◦ Whether ETF capital inflows continue.

◦ Whether stablecoin supply continues to expand.

◦ Changes in US Treasury yields and the US Dollar Index.

Whether a large-scale sell-off will occur among holders after the price rebound.

If capital inflows continue and short-term holders' profitability gradually recovers, the release of market supply may increase over time, thereby putting pressure on the ongoing rebound.

If the macro environment continues to deteriorate, with interest rate cuts being delayed or even starting to price in an economic recession, coupled with intensified selling pressure within the market, the rebound will come to an abrupt halt. In that case, Bitcoin’s (BTC) mid-term price may drop to another level, attempting to form a new cyclical bottom below $60,000.

The above analysis is provided by EMC Labs.

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About EMC Labs

EMC Labs is a partner of Victory Securities, and together they launched the only virtual asset fund approved by the SEC that accepts stablecoin subscriptions — the Victory EMC BTC Cycle Fund. EMC Labs was co-founded by experienced virtual asset investors and data scientists, with a core team from JD.com Finance, Bell Labs, Marsbit, and other companies. EMC Labs has invested substantial resources into building professional engines to analyze BTC on-chain data and technical indicators.

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