April 7-8 Global Macro Overview and Its Impact on Cryptocurrency (Quick Summary)

Two-day core conclusion: Initial rally followed by correction, sentiment-driven, increased volatility. Geopolitical easing triggered a short-term rebound, while high interest rate expectations and energy inflation suppressed medium-term trends. Cryptocurrency markets experienced volatility alongside leverage risks.

I. Global Monetary Policies (Federal Reserve + Bank of Japan)

- Key signals: On April 7-8, Federal Reserve officials issued hawkish statements, significantly reducing expectations of rate cuts; the probability of a June rate cut dropped below 35%, with market expectations of the first cut possibly in 2027. The Bank of Japan confirmed a rate hike in April (0.75% → 1%), the first in 17 years.

- Impact on crypto: - Short-term: Geopolitical easing improved market sentiment, causing Bitcoin to briefly surge to $72.7k.
- Medium-term: Elevated risk-free rates increased opportunity costs for crypto assets, leading to fund flows toward higher-yield assets.
- Risks: In a high-interest-rate environment, high-valuation crypto assets face valuation pressure and are prone to sharp corrections.

II. Geopolitical Developments (Middle East Ceasefire)

- Key event: On April 7, the US and Iran announced a two-week ceasefire, temporarily opening the Strait of Hormuz. Negotiations began on April 10 in Islamabad.

- Impact on crypto: - On April 8 morning, risk aversion eased, risk appetite rebounded, with Bitcoin and Ethereum rising together. Bitcoin briefly broke $72.7k, and Ethereum surged over 8%.
- Crude oil plummeted over 10%, gold hit a record high (breakthrough of $4,820/oz), with funds flowing out of energy and gold into crypto assets.
- Uncertainty remains: Iran has not fully accepted the ceasefire, negotiations are uncertain, market sentiment fluctuates, and crypto assets are prone to sharp corrections.

III. Global Asset Correlation (US stocks, gold, crude oil)

- US stocks: On April 7, US stock futures plunged across the board, with major indices futures turning lower, chip stocks broadly down, risk appetite cooling, and crypto assets weakening in tandem, with Bitcoin briefly falling below $69k.
- Gold: Ceasefire news drove safe-haven inflows, with spot gold surpassing $4,820/oz, hitting a record high, showing short-term correlation with crypto assets.
- Crude oil: Geopolitical risk premium receded, WTI crude oil dropped over 10%, falling below $98/barrel, energy sector tumbled, funds flowed out of oil, benefiting risk assets.
- Impact on crypto: In the short term, driven by risk sentiment, crypto moves in the same direction as gold and risk assets; medium-term, influenced by US stocks and oil trends, volatility increases.

IV. US Dollar Index and Exchange Rates

- Key trend: On April 7, the US dollar index fell 0.12%, closing at 99.857; the yen strengthened, the euro weakened, and the RMB remained stable.
- Impact on crypto: - The US dollar saw a slight rebound, exerting mild downward pressure on crypto valuation.
- Overall, the dollar remains in a weak zone without a strong downtrend, limiting downside for crypto assets.
- Cross-border capital flows: Middle East easing reduced short-term cross-border settlement demand, and stablecoin cross-border payments declined.

V. Global Regulatory Policies (US, EU, China)

- US: The Senate passed a bill banning the Fed’s CBDC until 2030; the Clarity Act was scheduled for mid-April review, clarifying BTC and ETH as commodities regulated by CFTC, benefiting compliant crypto assets.
- EU: Germany and Italy proposed restrictions on US stablecoins, promoting regional compliant stablecoins, causing some diversion from global stablecoins.
- China: On April 2, eight departments jointly issued Notification No. 42, reaffirming the comprehensive ban on domestic virtual currency activities, prohibiting financial and payment institutions from providing related services, and explicitly banning stablecoins and RWA (Real-World Asset) businesses.
- Impact on crypto: - Stricter global regulation, long-term trend toward compliance, favoring mainstream assets like Bitcoin and Ethereum; adverse for small tokens and illegal projects.
- China’s domestic market further contracts, with funds shifting overseas to compliant platforms, short-term liquidity pressure.

VI. Institutional Funds and Stablecoins

- Institutional holdings: Data from April 8 show institutional buying returned, with a net inflow of $82 million in one day, though weaker than March’s peak, indicating cautious sentiment.
- Stablecoins: USDT/USDC market cap hit a new high, surpassing $165 billion, with liquidity base solid; however, delays in Hong Kong stablecoin licensing temporarily dampened positive sentiment.
- Impact on crypto: - Institutional funds support major coins, with Bitcoin and Ethereum more resilient than smaller tokens.
- Stablecoins as liquidity anchors provide long-term support for the crypto market; in the short term, cautious sentiment slows capital inflows.
- Liquidation risks: On April 8, total liquidations reached 120k positions, totaling $598 million, with $431 million in shorts, and high leverage amplifying volatility.

Summary and Key Tips

Core conclusion: The two days showed an initial rally followed by correction: On April 7, geopolitical easing and institutional buying drove a rebound; on April 8, rate hike expectations vanished, the dollar rebounded, leading to a pullback. Long-term, regulatory compliance and institutionalization remain trends; short-term, liquidity and geopolitical risks increase volatility.

Key operational tips:

1. Short-term (1-3 days): Sell high and buy low, control leverage, avoid chasing highs, focus on support levels at $69k (Bitcoin) and $2,200 (Ethereum).
2. Medium-term (1-2 weeks): Watch April 10 CPI and April 30 core PCE data; if inflation exceeds expectations, crypto assets may face renewed pressure.
3. Long-term: Focus on compliance tracks, including stablecoins, RWA (Real-World Asset Tokenization), and institutional ETFs; avoid unregulated small tokens.