Global markets diverged sharply this week as Bitcoin struggles, contrasting the bullish momentum in Asian equities. The Hang Seng Index surged past 24,000 points on renewed optimism surrounding U.S.-China trade talks. Meanwhile, crypto investors remain cautious, watching for inflation data from the U.S.
Hang Seng Jumps on Positive Diplomatic Signals
The Hang Seng Index surged by over 1.3% on Monday, breaking past the 24,000 level for the first time since early March. This bullish movement follows high-profile trade talks held in London between U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng.
Topics covered included:
- Reducing tariffs on high-tech goods
- Resuming rare earth exports
- Cooperation on financial regulation
Investors are betting that warmer relations between the U.S. and China could stabilize global trade and support broader economic recovery in Asia. This has sparked a rally in banking, tech, and real estate stocks across the region.
While Asia celebrates progress, Bitcoin struggles, caught in a period of sideways trading and low momentum.
Bitcoin Struggles with Technical Weakness and Lack of Catalyst
In contrast to the equity euphoria, Bitcoin is showing signs of stagnation. After briefly touching $106,000, BTC retraced and has been hovering in a tight range between $105,000 and $106,000. A doji candlestick on the daily chart underscores the market’s indecision.
Key technical indicators point to:
- 12-month low in volatility
- Weak trading volume
- Lack of breakout signals
Analysts note that Bitcoin struggles due to a lack of near-term catalysts and fading momentum following its recent peak. The upcoming U.S. CPI report is expected to inject volatility, but until then, traders appear to be in “wait and see” mode.
Institutions Accumulate, But Retail Sentiment Remains Flat
Despite this period of weakness, institutional activity in the Bitcoin space remains robust. Corporations like MicroStrategy and MetaPlanet have increased their holdings. Additionally, reports show growing interest from hedge funds and traditional financial institutions.
However, retail investors appear to be holding back. Data from exchanges shows a dip in spot volume and wallet activity among non-professional users. Sentiment on crypto-focused platforms remains neutral to bearish.
This divergence suggests that while Bitcoin struggles in the short term, long-term conviction, especially from institutional investors, remains strong.
U.S. Inflation Data Could Break the Stalemate
The most anticipated event this week is the U.S. Consumer Price Index (CPI) release, scheduled for Wednesday. A higher-than-expected inflation print could lead to hawkish comments from the Federal Reserve, triggering dollar strength and further downside pressure on Bitcoin.
Conversely, a softer CPI could reduce fears of additional rate hikes and provide breathing room for risk assets, including crypto.
For now, Bitcoin struggles, but this macroeconomic data point has the potential to shift market dynamics significantly in either direction.
Conclusion: Diverging Markets Await Macro Clarity
This week’s price action paints a vivid picture of diverging sentiment. Equities in Asia, particularly in Hong Kong, are rallying on optimism over improved U.S.-China relations. Meanwhile, Bitcoin struggles, stuck in a low-volatility limbo as investors brace for inflation data.
Short-term traders may find limited opportunities until clarity emerges. However, the ongoing accumulation by institutions may signal a longer-term bullish setup, one that could activate once macro uncertainty subsides.
