Liquidity improvement Bitcoin oversold Rebound MVRV indicator close to bottom range

Market Observation

Macroeconomics and Liquidity

Currency liquidity is showing signs of improvement. The recent chaotic implementation of tariff policies, regardless of the final outcome, has quickly undermined market confidence in the economic outlook and may continue to affect market trends in the coming months. Bonds and the dollar have fallen into a downward spiral again, while the stock market has experienced a historic surge during the mid-bear market. The cryptocurrency market has also experienced severe volatility following the stock market.

Overview of the Cryptocurrency Market

This week, Bitcoin experienced a sharp rebound after a significant drop, while some low market cap tokens fell sharply due to delisting risks. The market as a whole lacks a clear focal point.

The top five tokens with the highest increase are XCN (110%), FARTCOIN (100%), GAS (60%), LAYER (40%), and UXLINK (30%). The biggest declines include BERA (40%), EOS (20%), MEW (20%), W (20%), and NEAR (20%).

It is worth noting that:

1. BERA, as a decentralized financial public chain, has fallen to a new low, breaking through the long-term oscillation support level. In the past week, its on-chain stablecoins have decreased by 300 million USD.

2. FARTCOIN is a meme coin on a certain public chain that surged several times against the trend during a market downturn, becoming the leader of this round of rebound.

3. BABY is a staking representative in the Bitcoin ecosystem, and after its listing, its market value returned to the $800 million level of the last round of institutional investment. The feasibility of the re-staking track is under scrutiny.

On-chain Data Analysis

The inflow of funds into the Bitcoin market has stagnated. Liquidity is rapidly contracting, resulting in the total market value of altcoins dropping from $1 trillion at the beginning of the year to around $600 billion. This decline has widespread effects, with various sectors experiencing significant devaluation.

Institutional funds experienced a slight net outflow, and a sense of panic is prevalent in the global market. The market value of stablecoins has slightly decreased, reflecting a significant increase in investors' risk-averse tendencies.

The long-term trend indicator MVRV-Z Score is currently at 1.6, close to the bottom range. This indicator is based on the total cost of the market and reflects the overall profitability situation. When the indicator is above 6, it is usually considered a market top; below 2 is regarded as the bottom range. Currently, the MVRV has fallen below the key level of 1, indicating that most holders are in a state of loss.

Futures Market Dynamics

The funding rate for this period remains at a low level of around 0.00%. Generally speaking, a rate between 0.05% and 0.1% indicates heavy long leverage, which may signal a short-term top; while a rate between -0.1% and 0% suggests more short leverage, potentially indicating a short-term bottom.

The open interest of Bitcoin futures continues to decline, indicating that the main funds in the market are withdrawing. The long-short ratio is 1.9, reflecting a market sentiment leaning towards greed. However, because retail sentiment is often a contrarian indicator, the reference value of the long-short ratio data has diminished.

Spot Market Performance

This week, Bitcoin prices have fluctuated sharply, while altcoins lack new investment logic to support them. Affected by increasing uncertainty surrounding tariff systems, global financial market pressures continue to mount. This weakness has spread to most asset classes, and the cryptocurrency market is also struggling to maintain its independence, deeply trapped in a bear market dilemma.