On May 12, Beijing time, the United States and China reached a tariff truce agreement in Geneva, pressing the 'pause button' on years of trade friction. The agreement includes a 90-day suspension of 24% mutual tariffs, retaining a 10% basic tariff rate, and establishing a third-country consultation mechanism. This development directly stimulated the S&P 500 index futures to surge by 3%, and the Nasdaq closed up by 4.35%. However, Bitcoin unexpectedly fell back to a low of $100,700 after touching $105,720, forming a rare pattern of 'divergence between stocks and coins'.
Short-term fund diversion: In the past 30 days, Bitcoin has risen by 24%, while the S&P 500 has only increased by 7%, and gold prices have remained flat. As trade agreements reduce market uncertainty, some funds are flowing back from crypto assets to traditional stock markets, leading to a 30-day correlation between Bitcoin and traditional markets rising to a historic high of 83%.
Institutional holdings 'double-edged sword': MicroStrategy and its affiliated institutions recently increased their holdings by 13,390 BTC, bringing their total holdings to 1.19 million (accounting for 6% of the circulation). Although this is seen as a long-term positive, the market is concerned that concentrated holdings may pose a 'price manipulation' risk, especially as the average cost rises above $100,000, leading to increased short-term selling pressure.
The main reason that this positive trend has not risen is that such news is indeed positive for the market but is more inclined towards U.S. stocks. This is also the main reason why U.S. stocks continue to rise while the crypto market declines.
The crypto market and gold are known to be 'risk assets', so when the environment improves, there is no need for everyone to hedge. This leads to continuous inflows into the stock market. We can see that gold also fell yesterday; in the short term, the crypto market has a certain correlation with gold.
Tonight, the focus will be on the U.S. April CPI data. The previous March CPI recorded 2.4% (below the expected 2.5%). If the CPI data is lower than expected, combined with rising expectations for the Fed to cut interest rates, Bitcoin may quickly recover above $105,000 and challenge the $120,000 mark. Institutional accumulation and ETF inflows will create a 'moat', reducing the probability of falling below $100,000 to less than 20%.
If CPI rebounds and strengthens the dollar, BTC may test the support level of $97,000 to $99,000. However, MicroStrategy's $21 billion capital increase provides it with 'ammunition', limiting selling pressure from long-term holders, and after a correction, it may enter a range of $90,000 to $110,000.
Trading idea: Bitcoin made another spike in the early morning; it should make another spike during the day. This time the pullback is likely limited to within $99,000, and if more aggressive, it could be $98,000. Long positions can be added around $98.5k, with a stop loss at $96.5k and a target of $105k, with a long-term view for new highs.
Ethereum has recently risen very strongly, but it also corrects very quickly, with daily fluctuations of 200 points. Long positions can be established at 2250, with a stop loss at 2200 and a target of 2400, with a long-term view of 2800.
Recently, altcoins that show unusual movements are those with highly concentrated holdings. These types of altcoins typically perform reverse rallies during market declines to attract the attention of retail investors.
Intra-day focus: baby sign wct
