The "reciprocal tariff war" has entered the second phase, and global risk assets have begun to bottom out.

Written by 0xWeilan

This week, BTC opened at $78,370.15 and closed at $84,733.07, up 6.84% for the week, with an amplitude of 14.89%, and the trading volume continued to increase significantly. Since late January, the price of BTC has effectively broken through the upper edge of the descending channel for the first time. Approaching the 200-day moving average.

Trump's "reciprocal tariff war" is still the largest independent variable in global macro-finance this week. Its dramatic performance has stunned the world, and China's counterattack has exploded with the strongest counterattack.

In the "collision game", the person who blinks first is likely to lose. The tariff war that has been launched against the whole world has triggered explicit or implicit reactionary forces from global forces, including but not limited to politics, business and capital.

Eventually, capital fled the US market, and the US "stocks, bonds, and currencies" achieved a rare triple kill.

Faced with the huge financial crisis, the Trump administration chose to make concessions, either partially suspending the implementation of reciprocal tariffs, or reducing the intensity to supplement the list of exempted goods, and releasing goodwill to China, its biggest rival, at the level of public opinion. Since then, the "reciprocal tariff war" has gradually entered the second stage, and multiple parties will start negotiations and compromises.

The risk equity market, which had previously plummeted due to the first stage, has rebounded sharply. Perhaps the most terrible stage caused by the "reciprocal tariff war" has passed, but the subsequent chaos will continue to dominate various markets. The reciprocal tariff crisis will neither pass easily nor be easily free from triggering a new crisis. Whether the subsequent "reciprocal tariffs" will escalate conflicts, whether the Federal Reserve will "timely" cut interest rates, and whether the US economy will fall into recession have become the main observation points.

Policies, macro-finance and economic data

Because most countries are unable to counter the "reciprocal tariffs", the countermeasures of China and the European Union have become the main force against US hegemony, with China, which is tit-for-tat, as the mainstay.

After several rounds of confrontation, the US tariffs on China increased to 145%, and China's counter-tariffs on the US increased to 125%. This has actually basically cut off the possibility of normal trade, so China subsequently announced that it would no longer respond to the US's possible subsequent tariff increases.

On April 10, the United States suspended reciprocal tariffs on most countries (excluding China), retained the 10% "base tariff", and started negotiations. US stocks rose sharply as a result, and Nasdaq recorded the second largest single-day increase in history.

China's seemingly passive behavior actually puts tremendous pressure on the United States. On the 12th, the United States exempted some Chinese goods from a 145% "reciprocal tariff", including smartphones, tablets, laptops, semiconductors, integrated circuits, flash memory, display modules, etc.

It is not just China's countermeasures that really push the Trump administration into the "second phase". There is also strong "opposition" from the US political and business circles and the stock, bond and foreign exchange markets.

On Monday, April 7, the three major U.S. stock indexes fell sharply to set adjustment lows, entering or approaching a technical bear market. The next day, the VIX panic index hit a high of 52.33, the third highest peak since the 2008 subprime crisis and the 2020 COVID-19 crisis.

S&P 500 VIX Index

During the same period, the short-end Treasury bond yield fell to 3.8310% on Thursday, while the long-end Treasury bond yield rebounded sharply on Friday, closing at a high of 4.4950%.

U.S. 10-year Treasury bond yield

After the U.S. stock market suffered a large-scale sell-off, U.S. bond funds also joined the sell-off. Coupled with the outflow of funds from the United States to Europe and other places, the U.S. dollar index DXY also fell sharply.

The US dollar index

The "triple kill" of stocks, bonds and currencies forced the Trump administration to release a signal of easing the tariff war and announce an exemption list. At the same time, the Federal Reserve also released a "dovish" signal to the outside world. In an interview with the Financial Times on Friday, Boston Fed President Collins said that the Federal Reserve is "absolutely ready" to use various tools to stabilize the financial market when necessary.

The easing of the tariff war and the Federal Reserve's verbal rescue have temporarily eased the US financial market. On Friday, the valuations of the three major US currencies also rose to end a turbulent week.

EMC Labs judges that the US-China tariff war has entered the second phase, market fears have eased, and gradually began to bottom out, but based on the "irrationality" of the Trump administration and the huge risks of US economic recession and inflation (the University of Michigan Consumer Confidence Index released this week continued to fall to 50.8), achieving a V-shaped reversal is a low probability event.

Selling pressure and selling

This week, the selling pressure on the long and short bracelets has weakened, slightly stopping the panic selling for three consecutive weeks. The scale of on-chain selling for the whole week was 188,816.61 pieces, of which 178,263.27 pieces were short-handed and 10,553.34 pieces were long-handed. On the 7th and 9th, the short-handed group suffered large losses again in the panic of the global market.

Currently, the long-hand group is still playing a stabilizing role, with nearly 60,000 coins held this week, showing that market liquidity is still quite scarce. As of the weekend, the short-hand group as a whole is still at a floating loss level of 10%, indicating that the market is still under great pressure.

Floating profit and loss of the entire market on the chain

Cycle indicators

According to eMerge Engine, the EMC BTC Cycle Metrics indicator is 0.125, and the market is in an upward relay period.