Bitcoin Rebound alts Divergence Institutional Capital Outflow Market Bottom Approaching

Market Dynamics Analysis

Macroeconomic Environment

Recently, there have been signs of improvement in liquidity in the currency market. The unpredictability of U.S. tariff policies has introduced uncertainty to the market, undermining investors' confidence in the U.S. economy. This impact may persist in the coming months. U.S. Treasury bonds and the dollar are showing a downward trend, while the U.S. stock market is experiencing significant volatility, a situation that often occurs in the mid-phase of a bear market. The cryptocurrency market has also undergone tremendous fluctuations.

Market Performance

This week, Bitcoin has seen a sharp rebound from overselling, while some small-cap tokens have dropped significantly due to being delisted by trading platforms. The market overall lacks a clear focal direction.

The top five tokens by increase are XCN, FARTCOIN, GAS, LAYER, and UXLINK, with increases of 110%, 100%, 60%, 40%, and 30%, respectively. The five tokens with the largest decrease are BERA, EOS, MEW, W, and NEAR, with decreases ranging from 20% to 40%.

It is worth noting that BERA, as a DeFi public chain project, has fallen below its long-term support level, and the total amount of stablecoins in its ecosystem has decreased by $300 million over the past week. FARTCOIN, as a meme coin in the Solana ecosystem, has risen against the trend amid the overall market downturn. BABY, on the other hand, is the leading staking project in the Bitcoin ecosystem, and its market cap has returned to the level of the last round of investment by institutional investors.

On-chain Data Analysis

The inflow of funds into the Bitcoin market has stagnated. Market liquidity has rapidly contracted, causing the market capitalization of altcoins to drop from 1 trillion dollars at the beginning of the year to around 600 billion dollars. This decline has had a widespread impact, affecting almost all sectors.

Institutional funds experienced a slight net outflow, and a sense of panic emerged in the global market. The market value of stablecoins has slightly decreased, reflecting an increased risk aversion among investors.

The long-term trend indicator MVRV-Z Score is currently at 1.6, close to the market bottom range. When this indicator is below 2, it is typically considered to be in the market bottom area. The current value indicates that the overall market is in a loss state, but is approaching the bottom range.

Futures Market

The futures funding rate has remained at a low level of around 0.00% this week. Generally, a rate between 0.05% and 0.1% indicates that there are more long positions, which may suggest a short-term top; a rate between -0.1% and 0% indicates that there are more short positions, which may suggest a short-term bottom.

The open interest in Bitcoin futures continues to decline, indicating that major funds are exiting the market. The futures long-short ratio is 1.9, showing that market sentiment leans towards greed. However, the reference value of this indicator is limited due to its volatility.

Spot Market

This week, the price of Bitcoin has fluctuated dramatically, while other cryptocurrencies lack new investment logic support. The ongoing uncertainty surrounding U.S. tariff policies has led to increasing pressure on global financial markets. This weakness has spread to almost all asset classes, and the cryptocurrency market has not been spared from this round of decline.