In today’s report, we delve into the implications of these developments on the crypto market, analyze the latest BTC price action, and highlight the technical, macroeconomic, and on-chain factors shaping the current landscape.

Here’s what we’ll cover today:

Let’s dive in!

The current market environment is being influenced by two key factors: rising geopolitical tensions and potential changes in global monetary policy. Tensions between the U.S. and China have intensified, with new measures and rhetoric indicating a possible escalation of the economic conflict.

At the same time, investors are closely monitoring developments in Japan, where the Bank of Japan is approaching an important interest rate decision. After years of maintaining an ultra-loose monetary policy, Japan shifted towards a more normalized rate environment. Market expectations for BOJ rate hikes shifted from March 2025 to April 2026.

The black line represents prior expectations, while the yellow line reflects the current outlook after the latest policy decision. Both lines show increasing odds of rate hikes, but the yellow line is notably lower, indicating a significant reduction in rate-hike expectations since the BOJ's last decision, and suggesting a more gradual tightening path through early 2026.

U.S. Treasury Secretary Scott Bessent noted that “there is a path” to an agreement with China over tariffs, following recent discussions with his Chinese counterparts in Washington. Bessent stated that the talks primarily focused on traditional issues such as financial stability and global economic early warnings, though he was uncertain whether President Trump had spoken directly with President Xi. As of early Today, China denies president Xi Jinping called president Trump as he claimed.

This comes as emerging market assets notably outperform their U.S. counterparts, with both equities and the U.S. dollar facing sustained downward pressure since the beginning of the year.

Overall, global markets are navigating a combination of geopolitical risk, which is contributing to ongoing volatility and a fragile investor sentiment.

Despite these struggles, both bitcoin and gold continued to not only rise since the start of trump’s tariff war, but actually outperform global markets, as can be seen on the chart normalized as of 04/01/2025. 

The crypto fear and greed index, a sentiment metric we’ve been tracking for some time, provides an objective and consistent data set. It currently shows a reading of 54, indicating neutral market sentiment. This comes after we saw a new low of 10, indicating extreme fear, in February, the lowest since the bear market lows of 2022. This suggests a healthy reset and could be an early sign of expansion.

Total Bitcoin spot ETF net inflows have remained positive throughout the past week, with the highest inflows occurring on Tuesday and Wednesday, when prices saw their sharpest increase.

This once again highlights how closely traditional trading appears to be tied to Bitcoin price action, despite recent trends showing some decoupling. Typically, flows align, meaning that good and bad days in stocks tend to reflect in Bitcoin and the broader crypto market.

Despite crypto sentiment turning neutral, traditional investor sentiment has taken a steep dive with the latest AAII survey showing the bull-bear spread falling to -34, one of its lowest points since the 2022 bear market lows. Over the past few weeks, this spread has dropped by more than 50 points, reflecting a sharp rise in bearish expectations.

Today, more than half of survey participants (55.6%) believe the market will fall over the next six months, while only 21.9% are optimistic. On the surface, it sounds like panic is setting in, but when you look closer, the picture tells a different story.

Despite the growing fear, retail investors are still holding onto their stocks.

Stock allocations have slipped just 3 percentage points, down to 67%, still a historically high level. For comparison, during the 2020 crash, stock allocations dropped much deeper, to around 55%.

Even though investors are feeling uneasy, they aren't acting on it. There’s a lot of noise, but very little real selling. Retail investors remain heavily invested, suggesting that beneath the surface fear, confidence in the market’s longer-term potential may still be strong.

On Tuesday, the U.S. will release key data including the House Price Index, JOLTS Job Openings, and the Consumer Confidence Index, offering insights into the real estate market, labor conditions, and consumer sentiment. Wednesday will feature several important reports: the ADP Nonfarm Payrolls, Q1 GDP data, the Employment Cost Index, and the Core PCE Inflation, a key gauge for the Federal Reserve. Additionally, there will be updates on Pending Home Sales, the Chicago PMI, and Personal Spending for March. Thursday will include Jobless Claims and ISM Manufacturing PMI data, along with the Bank of Japan’s Monetary Statement, Interest Rate Decision, and Press Conference, focusing on Japanese monetary policy. Friday’s key release will be the Nonfarm Payrolls report, providing a snapshot of job growth, followed by the Unemployment Rate.

The upcoming Federal Reserve FOMC meeting is taking place against a backdrop of growing market expectations for interest rate cuts. According to Bloomberg's World Interest Rate Probabilities, futures markets are showing increased confidence that the Fed will need to cut rates, with traders pricing in a potential recession this year.

A recent chart tracking market expectations from January 2, April 8, and April 27, 2025, reveals a significant shift in sentiment. Rate cut expectations have risen sharply since January, with markets now anticipating 5-6 total cuts (125-150 basis points) by late 2026. 

The chart highlights that, compared to earlier projections, the market now expects deeper and more frequent cuts, reflecting heightened concerns about economic contraction and the potential need for aggressive easing by the Fed.

Bitcoin Exchange Reserves vs. Price show a striking relationship between Bitcoin's price and exchange reserves from 2022 to 2025. As Bitcoin held on exchanges steadily dropped from 3.4M to 2.5M coins (blue line), price surged from $25K to nearly $100K (white line). This inverse correlation highlights a fundamental market dynamic - when investors move Bitcoin off exchanges into private storage, they're typically planning to hold long-term. This reduces available supply for trading and creates upward price pressure.

The accelerated decline in exchange reserves since October 2024 coincided with Bitcoin's push to new all-time highs, suggesting strong accumulation despite higher prices. For investors, this signals continuing confidence in Bitcoin's long-term value proposition, even as prices approach six figures.

Bitcoin had a strong week, starting off Monday with an upward trend that continued throughout the week, peaking on Friday at $95,800 after a more than 12% move. Price managed to close above $92,000 on the weekly chart, further signaling a potential shift in market structure and suggesting the ongoing downtrend may be invalidated. 

After facing initial resistance around $95,000, Bitcoin closed Friday’s daily candle at $94,700. Since then, it has been consolidating sideways, gradually trending lower, until early this morning when the price began rising again, currently sitting at $94,700, just below the $95,000 resistance.

With the recent move toward resistance, Bitcoin CME futures fully closed the gap between $95,200 and $95,800. Below, between $91,600 and $93,600, there remains another imbalance from Wednesday’s sharp spike, which has only been partially closed. While this doesn’t necessarily predict a downward move to fully close this price gap, it’s worth noting that historically, CME futures price imbalances have often acted like magnets and have been closed.

The Bitcoin liquidation heatmap shows liquidity spread fairly evenly across the chart, with the largest cluster of liquidation leverage worth $71M at $95,800, just above the current resistance. However, this is still not considered a particularly high amount of leveraged liquidations for Bitcoin perpetual futures.

Bullish Scenario: In a bullish case, we’d expect Bitcoin to continue trading higher, further solidifying its uptrend and invalidating any bearish reversal. For this to happen, the price needs to break above $95,000 and continue upwards, ideally targeting the next key level at $98,800. Given that price is still rangebound on lower timeframes, a retest of $92,000 is possible and not concerning. Long opportunities would arise on bullish retests of both $92,000 and $95,000, with invalidation if the price fails to hold either level.

Bearish Scenario: In a bearish case, Bitcoin would face rejection at $95,000, failing to break higher and reversing. Since $92,000 is considered support, the price would need to lose that level and head lower, targeting the previous key level at $88,800. Short opportunities would arise on a bearish retest after price breaks below $92,000, as this level is significant, and a loss would likely signal a bearish shift. The trade would be invalidated if the price reclaims $92,000.

Altcoins have managed to hold their ground, as we discussed in Friday’s altcoin market report, which provided a crucial and in-depth update covering Bitcoin, Ethereum, and Solana, along with trade scenarios and potential setups.

Looking at the TOTAL3 altcoin index, we can see that, despite Bitcoin changing its overall market structure and potentially initiating an uptrend by breaking above lower highs, TOTAL3 is still within an overall structural downtrend and has yet to break above the previous high at 850B. Once this level is reclaimed, the sentiment on altcoins could likely shift, potentially aligning with any monetary policy changes that may come from next week’s FOMC meeting.

We continue to monitor altcoins closely and build our positions within US-based crypto, raw materials, gaming, and AI sectors, while focusing on higher-cap altcoins and established companies. We're not yet getting too risk-on, as global market uncertainty remains high, and the potential for further downside still exists.

Stay tuned for Wednesday’s Altcoin Market Report, where we’ll dive deep into auction markets and analyze key metrics to assess how altcoins are likely to perform in the coming days.

We hope this report provided you with valuable insights into the latest market developments and geopolitical shifts.

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As always, stay informed, stay prepared, and have a fantastic week ahead! 🚀

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