Bitcoin broke its all-time high again after 4 months, reaching a high of $111,980.
Before Bitcoin broke through, some data performance had already shown signs: Bitcoin spot ETFs had a large net inflow for five consecutive days, of which IBIT had a net inflow of $537 million in one day, and the transaction volume reached $6 billion, the second highest in history. This transaction volume level is second only to January 23, the date when Bitcoin last hit a high point.
As the largest and second largest stablecoins, Tether once again issued 2 billion USDT on the Tron network, and USDC Treasury minted 498 million new USDC within 3 hours, bringing sufficient liquidity to the market.
In the cryptocurrency world, we often see some data indicators/events appearing in the news together with the rise and fall of the market, as if the changes in these data indicators are the rise and fall of the market.
In the previous live broadcast, we talked about: Federal Reserve interest rate, CPI/PCE, NFP, and US stocks. This live broadcast will interpret: US dollar index, US bonds, stablecoin supply, and ETF fund flow. We will still interpret from the perspective of the logic that affects the rise and fall of the cryptocurrency circle and how to use these data indicators to better predict the rise and fall of Bitcoin and the cryptocurrency circle in the future.
US Dollar Index (DXY)
1. Definition
The US dollar index (DXY) is a comprehensive index calculated by weighting the exchange rates of the US dollar and other major currencies, usually calculated by the geometric mean method. It is an indicator that measures the change in the value of the US dollar relative to a basket of major foreign currencies (usually including the euro, yen, pound sterling, Canadian dollar, Swedish kronor and Swiss franc), reflecting the overall strength of the US dollar. It is an important tool for measuring the international purchasing power of the US dollar and is updated in real time during the global foreign exchange market trading hours.
Trading hours: During normal trading hours of the U.S. stock and global foreign exchange markets (usually a 24-hour market, with the U.S. trading hours being particularly active), DXY data is continuously updated and can be viewed in real time by investors through trading platforms or financial information websites.
2. How does it affect the cryptocurrency market?
When the US dollar index rises, it means that the US dollar is getting stronger. In this case, funds may tend to invest in the US dollar and other relatively stable assets, thereby reducing the demand for high-risk assets (such as Bitcoin); market liquidity may tighten, risk appetite may decline, causing pressure on the currency circle, and prices may fall.
When the U.S. dollar index falls, indicating a weak dollar, investors may seek other assets as a means of storing value, and Bitcoin is sometimes regarded as "digital gold"; funds flow out of the U.S. dollar market and partly turn to the crypto market, which may drive the currency market up.
Market sentiment and risk aversion demand, the US dollar index also indirectly reflects global economic and political uncertainty. When risk aversion rises, although the US dollar is usually favored, some investors may also use Bitcoin as another safe-haven asset. Therefore, the relationship between the two is not absolute and other macro factors need to be considered comprehensively.
US Treasury Bonds
1. Definition
U.S. Treasury bonds are national bonds issued by the U.S. Treasury, representing U.S. government debt, and are divided into three categories: short-term (less than 1 year), medium-term (2-10 years), and long-term (more than 10 years). Their yields reflect market expectations for the economy, inflation, and policies, and are considered the benchmark for global risk-free interest rates.
The main characteristics of U.S. Treasury bonds are: safe-haven properties. U.S. Treasury bonds are a safe haven for global capital. When the economy is in turmoil, demand surges, pushing up prices and lowering yields; inflation indicators. Long-term U.S. Treasury bond yields imply market expectations of inflation. For example, the 10-year U.S. Treasury bond yield is highly correlated with core PCE inflation; policy linkage. The Federal Reserve directly affects the supply and demand of U.S. Treasury bonds through interest rates and bond purchase policies, and indirectly regulates market liquidity.
2. How will it affect the cryptocurrency market?
From the characteristics of U.S. Treasury bonds, it can be seen that the specific data and factors that affect the rise and fall of the cryptocurrency circle are mainly the yield of U.S. Treasury bonds, liquidity of the U.S. dollar, and feedback on inflation.
When U.S. Treasury yields rise, risky assets such as Bitcoin are sold off and fall. When U.S. Treasury yields soar (such as in January 2025 due to non-farm data exceeding expectations), investors tend to sell high-risk assets such as Bitcoin and turn to U.S. Treasury bonds for risk aversion; the yield curve steepens, suppressing valuations. The rise in long-term U.S. Treasury yields (such as the 10-year yield breaking through 4.3%) will push up the risk-free interest rate in the DCF model, causing highly valued assets (such as technology stocks and Bitcoin) to come under pressure and fall.
The demand for U.S. Treasuries affects the strength of the U.S. dollar. Rising U.S. Treasury yields attract global capital to flow into the U.S. market, pushing up the U.S. dollar index (DXY), and thereby weakening the attractiveness of dollar-denominated assets such as Bitcoin.
Debt is unsustainable, driving the long-term narrative of Bitcoin's alternative demand. The expansion of the US debt scale (such as debt repayment in 2030 will exhaust US fiscal revenue) may weaken the credit of the US dollar, and some funds will turn to Bitcoin as "digital gold". BlackRock CEO Larry Fink warned that Bitcoin may replace the US dollar as a reserve currency.
The data that need to be monitored for U.S. debt mainly include:
Yield curve shape, 2-year/10-year spread (predicting recession), the difference between the 2-year and 10-year US Treasury yields (i.e., the yield curve) is often seen as a leading indicator of the economic cycle. Generally speaking, when short-term interest rates (2 years) are higher than long-term interest rates (10 years), the yield curve inverts, which usually indicates an increased risk of recession and is bearish for the cryptocurrency market.
5-year/30-year interest rate spread (inflation expectations); the interest rate spread between longer-term (such as 5-year and 30-year) U.S. bonds reflects the market's expectations for future inflation and economic growth. If the interest rate spread widens, it usually means that investors expect future inflationary pressure to rise; conversely, it may indicate that inflation expectations are slowing down. If the 5-year/30-year interest rate spread shows that inflation expectations are rising, on the one hand, it may prompt some investors to configure Bitcoin as an anti-inflation tool; on the other hand, it may also trigger a tightening of monetary policy, reduce market liquidity, and put pressure on the cryptocurrency circle.
The scale and demand of U.S. Treasury auctions, such as the issuance of new 2-year, 5-year, and 7-year bonds each month; the results of U.S. Treasury auctions are directly related to the cost of market funds. When the scale of new bond issuance is large and demand is insufficient, bond yields may rise, which will increase market tightening expectations and affect the liquidity of cryptocurrencies.
If there is a risk of default in the US debt ceiling negotiations, it may cause sharp fluctuations in safe-haven assets.
3. Related websites
Federal Reserve official website: interest rate decision, economic forecast summary. (https://www.federalreserve.gov/)
U.S. Treasury Department: U.S. Treasury issuance plan and auction results. (https://home.treasury.gov/)
TradingView: Real-time U.S. Treasury yield curve, technical analysis. (https://www.tradingview.com/)
Investing.com: Global macroeconomic calendar (non-farm payrolls, PCE, etc.). (https://www.investing.com/)
Glassnode: On-chain data (whale holdings, exchange traffic). (https://www.glassnode.com/)
CoinGecko: coin price, market capitalization, ETF fund flow (such as BlackRock IBIT holdings). (https://www.coingecko.com/)
U.S. debt affects the cryptocurrency market through the triple mechanisms of risk appetite, dollar liquidity, and long-term credit narratives. At present, we need to keep a close eye on the implementation of tariffs in April, core PCE data, and the signal of the Fed's policy shift. In the long run, Bitcoin's anti-inflation properties and the dollar credit game are still the core variables, but we need to guard against short-term sharp fluctuations caused by repeated policies.
Stablecoin supply
1. Introduction and function
The supply of stablecoins refers to the total size of stablecoins in circulation in the market, reflecting the liquidity and capital activity of the crypto market. Stablecoins maintain value stability by being linked to fiat currencies (such as the US dollar), commodities (such as gold) or algorithmic mechanisms, becoming an important trading medium and hedging tool in the cryptocurrency market.
Main role: As a liquidity indicator, supply growth usually indicates that funds are flowing into the crypto market, and vice versa, it may trigger liquidity tightening. As a market confidence signal, a surge in supply may reflect investors' demand for crypto assets.
2. Mainstream stablecoin types and characteristics
As of the end of March 2025, the total market value of stablecoins is US$211.9 billion.
Fiat-collateralized: USDT (Tether), the largest stablecoin, accounts for 68% of the market share (US$144.3 billion), is pegged to the US dollar at a 1:1 ratio, but its reserve transparency has long been controversial; USDC (issued by Circle), with a market value of US$60.1 billion, is known for its US dollar reserves and compliance and is favored by institutions; TUSD: an emerging fiat-currency stablecoin that focuses on specific scenarios (such as exchange trading).
Decentralized collateral type: DAI, with a market value of US$5.3 billion, is generated through over-collateralized cryptocurrencies and relies on smart contracts to maintain anchoring.
Commodity-collateralized: XAUT, a gold-backed stablecoin, each coin corresponds to 1 ounce of gold, suitable for anti-inflation needs.
Algorithmic stablecoins: USDD, FRAX, use algorithms to adjust the supply and demand balance, but are easily decoupled due to market fluctuations.
3. How does it affect the cryptocurrency market?
With the increase in supply and abundant funds in the market, stablecoins are the main trading medium in the crypto market. Their issuance (such as USDT's issuance of $1.8 billion in a single day) can directly inject liquidity and drive up the prices of assets such as Bitcoin. With the shrinking supply, the selling pressure is intensifying. If the inflow of stablecoins slows down (such as the trading volume falling to 25% of the bull market peak in March 2025), the market may enter a consolidation period, and the short-term rise of Bitcoin will be difficult to sustain.
Risk preference and market sentiment, safe-haven demand. When the market is turbulent, investors convert their assets into stablecoins for safe havens, leading to a sell-off of Bitcoin (such as when the price of gold soared to $3,080, Bitcoin came under pressure to fall).
Policies and regulations are linked, and the compliance process is in progress. If regulations are tightened (such as Japan classifying crypto assets as financial instruments), it may inhibit the circulation of stablecoins and drag down the cryptocurrency market.
4. Related websites
Glassnode: Analysis of whale holdings and stablecoin exchange traffic. (https://www.glassnode.com/)
Artemis Terminal: Real-time update of total stablecoin supply and sub-item data. (https://www.artemisterminal.com/)
Industry reports: Market analysis by Matrixport, CoinFund and other institutions. (https://www.matrixport.com/zh) 、(https://www.coinfund.io/)
The supply of stablecoins is the "barometer" of the crypto market, and its changes affect the cryptocurrency market through liquidity, policies and market sentiment. In the long run, the compliance and scale expansion of stablecoins may provide support for Bitcoin, but we need to be vigilant against regulatory risks and sudden changes in market liquidity.
ETF Fund Flows
1. BTC ETF
BTC ETF fund flows refer to the net inflow or outflow of funds caused by investors buying or selling Bitcoin spot ETF shares. This type of ETF allows investors to indirectly hold Bitcoin through traditional stock accounts. Its fund flows directly reflect the allocation demand of institutions and individuals for Bitcoin and are an important indicator of market sentiment.
2. How does it affect the cryptocurrency market?
Direct supply and demand relationship: when funds flow in, investors buy ETF shares, and the issuer needs to buy Bitcoin in the spot market to meet the position demand, pushing up the price. When funds flow out, investors redeem shares, and the issuer needs to sell Bitcoin, causing price pressure.
Market sentiment transmission, confidence indicators, and continuous net inflows enhance market optimism, while negative inflows lead to wait-and-see attitudes. Leverage effect, ETF fund movements and futures market linkage, for example, when BTC ETF funds had a net inflow of $83 million on March 24, 2025, the market long-short ratio rebounded to 1.06, and short-term sentiment stabilized.
Policies and liquidity are linked. Fed policies, interest rate cut expectations or balance sheet reduction plans may affect US dollar liquidity and indirectly affect ETF fund flows. Regulatory dynamics, the US SEC's approval or restrictions on ETFs may change the direction of fund flows.
3. Related websites
Lookonchain: Real-time tracking of ETF fund flows and holdings (e.g. BlackRock holds 573,000 BTC). (https://www.lookonchain.com/)
Artemis Terminal: Analyze on-chain data and market sentiment. (https://app.artemis.xyz/)
BitMart: Publish market situation reports (such as total market value, long-short ratio). (https://www.bitmart.com/)
AiCoin: Provides ETF fund flow and price correlation analysis. (https://www.aicoin.com/)
BTC ETF fund flows affect the cryptocurrency market through direct supply and demand, market sentiment and policy linkage. In the long run, the compliance and scale expansion of ETFs may provide support for Bitcoin, but we need to be vigilant against the risks of capital outflow and policy uncertainty.
Summarize
The rise and fall of the cryptocurrency market is the result of the combined influence of multiple factors. Therefore, the judgment of the rise and fall of the market also needs to be viewed comprehensively. Do not be afraid of trouble, persist in observation and verification, and form your own methodology.
For example, real-time monitoring through multiple channels can be used to judge the rise and fall at a macro level. Use authoritative platforms (such as Investing.com, TradingView, Glassnode, CoinMarketCap, Matrixport, etc.) to obtain real-time data and analysis reports, and keep a close eye on data such as the macro economy, bond market, gold market, stablecoin supply, and ETF fund flows.
Learn technical and fundamental analysis to make specific judgments on market fluctuations. Combine technical analysis (charts, trend lines, trading volume) with fundamental data (economic indicators, policy dynamics) to form a more comprehensive market judgment. Regularly review and optimize investment strategies to adapt to the ever-changing market environment.
Stay flexible and prudent, stay highly alert to macroeconomic and policy changes, adjust operating strategies in a timely manner, and avoid emotional decisions. This multi-dimensional monitoring and strategy adjustment can allow you to capture opportunities, avoid risks, and establish a scientific investment strategy that suits you.