Will Bitcoin rise again? What factors influence Bitcoin's short-term trends?

Source: Talking about Li and Talking about the Outside

Bitcoin has been fluctuating for more than 2 months, and today (April 22, Beijing time) it has successfully rebounded and broken through the $87,000 mark. As of the time of writing, the price remains around $88,100, as shown in the figure below.

At the same time, the price of spot gold has also continued to break historical highs, reaching $3,483 per ounce, with a daily increase of 1.73%, as shown in the figure below.

However, unlike Bitcoin and gold, the three major U.S. stock indices continue to decline collectively. As of the time of writing, the S&P 500 index has fallen 2.36% for the day, the Dow Jones Industrial Average has fallen 2.48%, and the Nasdaq Composite Index has fallen 2.55%.

In short, in the current market stage, the correlation between Bitcoin, gold, and stocks (mainly U.S. stocks) seems to have become the focus of attention. Today, I also saw KOLs online saying that Bitcoin will begin to decouple from U.S. stocks and enter an independent market phase…

I think this conclusion may be a bit premature. Overall, we believe that Bitcoin cannot completely decouple from U.S. stock trends in the short term and will still be somewhat affected. The reason why Bitcoin can temporarily break away from U.S. stocks now may be more due to the significant rise in gold, leading some overflow funds targeting gold to flow into Bitcoin (including the recent new net inflows into ETFs). However, this demand is likely to be short-term, and it cannot be ruled out that these rapidly inflowing funds will also quickly flow out. Nevertheless, from a longer time dimension, this also indicates Bitcoin's potential, and the purchasing power of short-term demand (especially from major buyers) may become a significant new force for Bitcoin buying in the future.

As for the price aspect, from a long-term perspective, Bitcoin will definitely continue to rise, and we will maintain this view.

In the short term, although Bitcoin has rebounded and broken through the resistance level near $87,000 on the K-line and has broken through the downward channel since the beginning of the year, as shown in the figure below, considering macroeconomic and policy factors (which will be mentioned below), we believe that the next few weeks will likely be accompanied by considerable volatility, and attention should still be paid to the risk of a pullback. It seems too early to discuss Bitcoin entering a new round of comprehensive rises. If you continue to be optimistic about potential opportunities in the market this year, then during the fluctuations, positions at $82,000, $79,000, $74,000, and $72,000 (especially the $74,000-$72,000 range, which currently seems to be a short-term phase bottom) are still a good range to continue to accumulate in batches. If you have not yet formulated a complete plan or thought about what to do, then as always: no one can accurately predict short-term market trends. Before the new major trend is fully confirmed, the best operation may be to do nothing (or try with a small position).

Currently, the trend of the cryptocurrency market seems to be more constrained by external factors, such as macroeconomic conditions, policies, and the performance of the U.S. stock market, in addition to some internal influencing factors. In a series of articles from a few days ago, we discussed some market changes from different perspectives (including tariff policy perspectives). Next, we will continue to look at a few other aspects to see what events are worth paying attention to in the coming weeks:

1. Macroeconomic Data

Whether in the stock market or the cryptocurrency market, the current stage seems to be largely influenced by the macroeconomic environment. Although the impact of Trump's tariff war has not yet manifested in key economic data (with a certain lag), we still need to keep an eye on some important economic data related to inflation, employment, etc. (here we only discuss U.S. data).

Here are a few key examples:

On April 30 at 10:00 AM (all times mentioned below are Eastern Time), the PCE (Personal Consumption Expenditures Price Index) data for March will be released. This is an inflation-related indicator that the Federal Reserve pays close attention to, and the core PCE may influence the future interest rate decisions of Federal Reserve officials. Generally, if the PCE data is higher than expected, it indicates rising inflation pressure, which may lead to increased volatility in financial markets; if the PCE data is lower than expected, it indicates reduced inflation pressure, which may help monetary easing policies and benefit the market.

On May 2 at 8:30 AM, the NFP (Non-Farm Payroll) data for April will be released. This data is also quite important as it may directly reflect some immediate impacts since the implementation of Trump's tariff policy. Employment data is also one of the key data points the Federal Reserve focuses on, and changes in employment data help the market anticipate or communicate changes in the Federal Reserve's interest rate policy. Generally, strong employment data boosts the dollar, while weak data may lead to a softening of the dollar and trigger greater market volatility. Currently, the market seems to hold a conservative view on April's employment growth, with many analysts predicting that the number of new jobs will be lower than in March.

On May 7 at 2:00 PM, the FOMC meeting will take place. This meeting seems to be one of the most anticipated FOMC meetings of the year and is the first FOMC meeting after what Trump called "Liberation Day" (Trump announced comprehensive tariffs on U.S. imports on April 2, referring to that day as Liberation Day). However, based on the current Federal Reserve observation tools, it is likely that the Federal Reserve will continue to maintain the interest rate level at 4.25%-5%. However, what people are more concerned about or looking forward to seems to be focused on the Federal Reserve's statements, so we will see what Powell says at the press conference at 2:30 PM that day.

On May 13 at 8:30 AM, the CPI (Consumer Price Index) data for April will be released. CPI and the PCE mentioned above are both important indicators used by the Federal Reserve to measure inflation. Generally, if CPI is higher than expected, it may scare the stock and cryptocurrency markets (as people worry that monetary policy will continue to tighten), while lower-than-expected data is favorable for the market. However, we may see some contradictory effects in the upcoming CPI data: due to the impact of the tariff war, reports from various sources indicate that China has been strongly retaliating, leading to rising prices of goods within the U.S. and causing American consumers to panic-buy, which may temporarily push up CPI. However, if this situation persists, it may exacerbate price pressures and lead to a decrease in CPI, resulting in contradictory effects.

On May 15 at 8:30 AM, the retail sales data for April will be released. Considering the current changes in global trade policies and the consumer behavior shifts mentioned above, this data may also have significant impacts on the market. Generally, strong retail sales data may indicate good growth (optimistic corporate profit outlook), while unexpected declines in data may raise concerns about economic recession. However, when considering NFP, CPI, and other data comprehensively, this data may also present some contradictions in the short term.

Of course, in addition to the data mentioned above, key economic data from countries like China and Japan should also be monitored. However, as we mentioned earlier, macroeconomic data often has a certain lag, and what the market cares about first may be the favorable/unfavorable expectations based on these data, which will then directly reflect in market prices.

2. Earnings Season

The arrival of the U.S. corporate earnings season may have some impact on risk markets (stock markets, including cryptocurrency markets), especially against the backdrop of current global tariff policies, many large institutions may readjust their forecasts for future profitability and capital expenditure budgets.

For example, Tesla will release its Q1 earnings report on April 22 at 5 PM, Alphabet will release its Q1 earnings report on April 24 at 5 PM, Microsoft will release its Q1 earnings report on April 30 at 5 PM, and Apple will release its Q1 earnings report on May 1 at 5 PM… and so on.

Different companies have certain expectations from the market. If their quarterly earnings or outlooks deviate from expectations, it will not only directly affect their stock prices but may also have a broader impact on the stock market (and even the cryptocurrency market), creating new shocks to investor sentiment.

3. Policy and Regulation

On April 21, the SEC officially announced Paul Atkins as the new SEC Chairman, becoming the 34th chairman in the agency's history. The market generally expects that, compared to the previous chairman Gary Gensler during the Biden administration, Atkins, nominated by Trump, will make the SEC more friendly towards cryptocurrencies. As shown in the figure below.

Additionally, a series of roundtable discussions organized by the SEC's cryptocurrency working group will continue this month, including key issues for custodians on April 25, the integration of assets on-chain with traditional finance on May 12, and DeFi and the American spirit on June 6. As shown in the figure below.

Another important legislative focus is on stablecoins, which we have mentioned in previous articles. Trump also hopes to complete the signing of stablecoin legislation by August this year. The U.S. is actively promoting stablecoin legislation, essentially hoping to continue expanding the dollar's dominance globally.

In Summary:

From an intuitive perspective, events (various policies, data, and news impacts) determine the flow of funds, the flow of funds determines the price direction of corresponding assets, the price direction then influences the sentiment of most people, and the sentiment of people directly determines the flow of their funds…

Whether it is the policy factors we discussed above, economic data factors, or other news-related factors, these are actually short-term (including medium-term) factors affecting Bitcoin's trend. From a long-term perspective, as the ETF is approved, more and more large institutions participate deeply, and the gradual advancement of policies and regulatory trends in some countries (mainly the U.S.), as well as the Bitcoin strategic reserve plans of major countries… the chip structure of Bitcoin seems to be undergoing some fundamental changes or transitions. Theoretically (including from on-chain data changes), the amount of Bitcoin in the hands of retail investors will only decrease, and in the future, Bitcoin's price will only continue to rise (or reach a price range deemed appropriate by institutions to enter a long bull cycle of fluctuations).