Macroeconomic constraints and capital inflows continue to drive Bitcoin's bear market recovery-type rally | Bitcoin | Research Report | Cryptocurrency Market Analysis | Bear Market Recovery

The core narrative of this week's BTC market is not simply a recovery in risk appetite, but a hedged rally driven by the interplay between 'tight macro-financial conditions' and 'internal cryptocurrency spot capital inflows.'

On the sentiment side, US-Israel-Iran negotiations have faced ups and downs, but the market has largely become desensitized. US stocks hit new highs, with valuations returning to elevated levels, and the US stock market is in an extremely optimistic mood, driving strong inflows into Bitcoin ETFs and DAT company channels.

On the macro side, tax season has passed, and market liquidity rebounded somewhat, but apparent constraints remain. Overall, financial conditions are 'slightly tighter.'

On the crypto side, Bitcoin rose from $73,834.83 to $77,647.10, gaining +5.16% for the week. Net inflows into ETFs amounted to $679,852,916, stablecoin supply increased by $492,343,465, and DAT companies conducted large-scale purchases last week, ultimately reducing exchange balances by 44,242 BTC. Internal capital flows and supply structure provided strong support for prices.

Thus, the relationship between Macro and Crypto this week should be defined as: slightly adverse macro conditions, but internal crypto spot inflows and supply contraction offset some external pressure. Reduced selling pressure and enhanced buying power were the core drivers of this week’s price increase.

Macroeconomic and Financial Conditions

This week, the dominant judgment on macro-financial conditions was 'slightly tighter,' which had an 'adverse' impact on Bitcoin. This wasn't due to a comprehensive liquidity contraction but rather due to coverage of liquidity improvements by interest rates, the US dollar, and event layers. Fed Net Liquidity stood at $5.74 trillion, up +0.54% weekly, while SOFR was at 3.65%. These figures indicate that the fundamental funding environment remains supportive, short-term financing costs haven’t risen further, and the macro situation isn't one of 'complete risk-off.' However, there were counteracting forces from the interest rate side:The 10-year US Treasury yield rose to 4.31%, up +6 basis points (bps) for the week, while the 10-year TIPS yield climbed to 1.92%, up +2 bps. This indicates a simultaneous rise in nominal discount rates and real risk-free yields. For assets like Bitcoin, which lack cash flow and are highly volatile, rising real interest rates directly increase the opportunity cost of holding such assets.

The US dollar further reinforced this constraint. The DXY index rose to 98.51, gaining +0.42% for the week, moving in tandem with the 10-year yield (+6 bps) and 10-year TIPS (+2 bps), forming a combination of 'rising yields + strengthening US dollar,' rather than isolated interest rate noise. Risk assets didn’t entirely lose their footing: the S&P 500 gained +0.55% for the week, Nasdaq rose +1.50%, and Russell 2000 added +0.36%; however, the Dow Jones fell -0.44%, indicating that risk appetite hasn’t fully broadened. Therefore, macro transmission isn’t linearly suppressive but creates a mixed state where valuation pressures coexist with some risk-taking. In conclusion, financial conditions are 'slightly tighter,' and the macro impact on Bitcoin is 'moderately adverse.'

Crypto Market Structure

The internal structure of the crypto market and macro headwinds have formed an 'offset,' driving strong price gains. On the price front, Bitcoin (BTC) rose from $73,834.83 to $77,647.10, gaining +5.16% over the week, surpassing both the 30-day and 90-day moving averages, indicating that short-to-medium-term recovery has been established. However, the price remains below the 200-day moving average of $85,227, suggesting that medium-to-long-term structural pressure has not yet eased. The weekly price range was 6.02%, with a 31.5% decline in 7-day average spot trading volume, implying that the rally was not driven by high volatility or widespread buying but rather more akin to a recovery under low trading conditions. The upward price movement reflects not robust buying power but reduced selling pressure, meaning that if prices encounter resistance or macro financial conditions deteriorate further, the sustainability of the rally may be questioned.

Capital flows are at the core of this week’s structural strength. Bitcoin (BTC) ETFs saw net inflows of $679,852,916 this week, including a single-day net inflow of $344,457,961 on April 22nd. Stablecoin supply increased by $492,343,465, showing continuous inflows throughout the week. ETF inflows reflect marginal demand for spot BTC ETFs, while stablecoin expansion corresponds to the recovery of potential purchasing power within the market, collectively indicating that external capital is not withdrawing but flowing back through both ETFs and stablecoins. On the supply side, there was a simultaneous contraction: net outflows from exchanges amounted to 44,242 BTC, signaling a decline in immediately sellable exchange supply. Long-term holder supply decreased by only 1,777 BTC, while short-term holder supply increased by 49,140 BTC.

Daily Crypto Market Capital Inflows and Outflows

The derivatives market did not provide evidence of systemic leverage expansion. Open interest increased by only $26,302,330, which is nearly flat; funding rates ranged between -0.00012 and 0.00000, while derivatives trading volume declined by 9.8%. Despite total liquidations reaching nearly $3.7 billion during the week, this data did not coincide with a significant expansion in open interest, positive funding rates, or amplified derivatives trading volume, so it cannot be concluded as a leveraged-driven rally. Therefore, we determine that the upward momentum mainly came from spot buying power rather than leverage.

On-chain data shows MVRV at 1.434, up +0.037 for the week; long-term holder MVRV at 1.687, up +0.027 for the week; short-term holder MVRV at 0.972, up +0.034 for the week; overall SOPR at 1.0, short-term holder SOPR at 1.0, and long-term holder SOPR at 1.11, trending upward. This combination indicates that the market is returning to turnover near mild profitability and breakeven levels, though short-term holders have not yet entered a clearly profitable range. Thus, the market remains in an 'accumulation' phase rather than 'expansion.'

Liquidation of long-term holders from the 'deep bear market' is still ongoing

Market Movement Attribution

This week’s transmission chain is as follows: the tightening of macro financial conditions increased constraints on Bitcoin’s valuation, but net inflows from internal crypto ETFs, stablecoin expansion, and a contraction in exchange supply formed a spot-market offset, driving the price to recover from $73,834.83 to $77,647.10. This offset was not complete. Macro headwinds failed to fully suppress Bitcoin because ETF inflows of +$679,852,916, stablecoin growth of +$492,343,465, and net outflows of 44,242 BTC from exchanges collectively verified support from spot funding and supply structure. However, macro pressure has not become ineffective either; spot trading volume fell by 31.5%, and by the weekend, prices lacked support, indicating that the recovery has not yet translated into broad participation or trend expansion.。

Therefore, this week’s Bitcoin movement did not exhibit a typical “expansion” state but rather a “restorative uptrend” within an “accumulation” phase. The price recovery had funding and supply support, but trend confirmation has yet to be completed. Internal structural improvements were sufficient to offset some macro pressures but not enough to confirm that macro headwinds or internal loss liquidation have been fully absorbed.

Market Outlook

First, if the Fed Net Liquidity continues to expand from the base of $5.74 trillion, with SOFR remaining near 3.65% without further increases, and if the 10-year Treasury yield retreats from 4.31%, the 10-year TIPS yield drops from 1.92%, and the DXY index falls back from the 98.51 resistance zone, then the tightening effect of macro-financial conditions will diminish.

Second, if Bitcoin’s price remains above the 30-day and 90-day moving averages and approaches or breaks through the 200-day moving average at $85,227 while spot trading volume stops contracting by -31.5%, the recovery may gain stronger trend confirmation.

Third, the US stock market has already priced in the end of the Israel-Iran war and the short-term impact of crude oil prices on inflation, partially pricing in better-than-expected AI tech earnings reports currently being disclosed. We believe this pricing is somewhat “overly optimistic,” suggesting potential overvaluation in US equities, along with the possibility of a rapid pullback if geopolitical conflict resolution falls short of expectations.

Within the cryptocurrency market, a tug-of-war between the confidence of investors holding losses and the budget scale of bottom-fishing funds is ongoing. While short-term prices may remain strong, they are approaching short-term cost levels. Any exposure of vulnerabilities in the macro environment or industry could lead to the termination of the rebound.

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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