Macro Interpretation: Today is the weekend, and market volatility is low, but some macro-level dynamics are worth discussing regarding the crisis of Federal Reserve independence, regulatory vacuum, and subtle changes in Bitcoin's technological form, which together construct a new narrative framework for the development of the crypto market. Behind these seemingly scattered events lies a core clue that could reshape the value logic of digital assets.
The Federal Reserve is currently facing an unprecedented test of trust. Potential candidates for the next Federal Reserve chair, including former governor Kevin Warsh, sharply criticized the current policies during the IMF annual meeting, resonating with rumors of the Trump administration's attempts to dismiss Powell. This risk of administrative intervention in central bank independence is shaking the fundamental confidence of the market in the stability of the dollar system. Notably, there have been unusual fluctuations in the U.S. Treasury market—30-year Treasury yields have dropped 30 basis points from their April highs, and a net inflow of $19 billion in a single week has set a historical record. This reflects rising risk-averse sentiment and suggests that institutional investors are restructuring their asset portfolios.
The cryptocurrency market in the fog of regulation presents a contradictory picture. SEC Commissioner Hester Peirce used the metaphor 'the floor is lava' to vividly depict the awkward position of U.S. financial institutions in the crypto business. This regulatory uncertainty has led traditional institutions to adopt a 'stay off the ground' evasive strategy, while the derivatives market, on the other hand, shows an alternative prosperity: the open interest in Bitcoin perpetual contracts has surpassed 218,000, increasing by 15.6% since early March. Even though the average funding rate has turned negative, indicating a dominance of shorts, the active leverage trading still suggests that the market is brewing a turning point.
From a technical perspective, Bitcoin presents intriguing dual signals. While the price has regained the 200-day moving average, releasing a positive signal, a 'death cross' at the daily level looms. Historical data shows that among the 10 similar formations since 2009, only some triggered bear markets, and this contradiction in technical indicators resonates with the current market sentiment's fragmentation. Notably, Bitcoin has broken through the $95,000 mark against the backdrop of persistently weak U.S. stocks, and its correlation with traditional risk assets is undergoing a historic test.
The Bitcoin unit reform proposal put forward by core developer John Carvalho has unexpectedly become a barometer for market sentiment. The BIP proposal advocating for the abolition of the 'Satoshi' unit and a redefined measurement system appears to concern technical details but actually touches on the core narrative of Bitcoin as a store of value. Opponents worry that this would dilute the concept of the scarcity of 21 million coins, while supporters believe that lowering the cognitive threshold will accelerate mass adoption. The essence of this debate is the challenging balance that Bitcoin strikes between its dual attributes of 'digital gold' and 'payment currency.'
The bearish signals in the derivatives market stand in stark contrast to the strength of spot prices. Coinank data shows that despite Bitcoin's weekly gain exceeding 12%, the funding rate for futures has dropped to -0.023%. This divergence suggests that professional traders are building hedging positions. Coupled with the upcoming April non-farm payroll data and core PCE price index, the market seems to be accumulating energy for potential volatility. Interestingly, Bitcoin's implied volatility has dropped to 45%, a year-to-date low, creating a dramatic contrast with the 'lava' undercurrents in the options market.
The ongoing fermentation of policy uncertainty is reshaping the hedging logic of crypto assets. As the Trump administration tightens federal agency job approvals through the Office of Personnel Management, demonstrating a strong tendency for administrative intervention, the decentralized characteristics of Bitcoin gain new value support. Historical data shows that the multiplicative effect of Bitcoin prices and the Nasdaq index is weakening. If this 'decoupling' signal is confirmed amid the Federal Reserve independence crisis, it could herald a new era in the pricing of digital assets.
In this struggle between traditional finance and the crypto world, market participants need to be wary of several risks: liquidity crises that may arise from the loss of the Federal Reserve's policy credibility, delays in institutional entry due to regulatory vacuum, and the potential transformation of Bitcoin's narrative logic. It is worth noting that the World Gold Council is about to release a demand report for the first quarter, which may provide a key reference for the revaluation of 'digital gold.' When the lava begins to solidify, those who can build castles on the newly formed land may determine the power dynamics of the next crypto cycle.
BTC Data Analysis:
Coinank data shows that Bitcoin's spot price recorded a 12% rebound on a weekly basis, but the derivatives market is sending warning signals. The funding rate for futures has decreased to -0.023%, forming the most significant short premium structure in nearly six months, with contract prices relative to spot widening to 1.2%, indicating that professional traders are using derivatives to build hedging protections. Open positions in perpetual contracts have risen to 218,000 BTC, expanding by 15.6% from quarterly lows, marking the largest single-week leverage exposure increase since February 2024.
We believe that this round of divergence between spot and futures exposes three layers of risk logic: the expansion of leverage exposure and price rebound creates an 'asymmetric risk exposure,' which could trigger a $3.5 billion chain liquidation when price volatility exceeds 3%; additionally, the continued negative funding rate indicates the accumulation of 'short squeeze' risk, with the current concentration of short positions reaching 92% of CME's historical percentile; moreover, the surge in market makers' delta hedging demand is causing liquidity mismatches in the spot market, with buy-sell spreads widening to a three-month peak.
For the crypto market, this structural pressure may delay the momentum to break through key resistance levels while giving rise to cross-exchange arbitrage opportunities. However, caution is needed regarding the liquidity spiral triggered by black swan events in a high-leverage environment. Historical data shows that after similar periods of divergence between spot and futures, there is a 79% probability that the volatility center will rise by 58% within 30 days. The current market is entering a highly sensitive and fragile period.
