Bitcoin falls below the 107,000 mark as Trump meets rarely.

On Thursday (May 29), the financial markets experienced fluctuations, with uncertainty surrounding U.S. trade policy becoming the focus. The U.S. Court of Appeals temporarily stayed the previous ruling by the trade court that deemed Trump's tariff measures invalid, meaning that the relevant tariff measures are temporarily back in effect. This dramatic reversal triggered market fluctuations, with the 10-year U.S. Treasury yield briefly rising to 4.53% during the session, but then subsequently falling back, ultimately closing at 4.42%, down 5 basis points from the previous day.

However, unlike the volatility of US Treasuries, Bitcoin showed a volatile downward trend throughout the day and fell below the key $107,300 support level in one fell swoop. The analysis points out that this highlights the willingness of Bitcoin bulls to choose to take profits and stay on the sidelines after a sharp rally in the early stage. There is an argument that the attributes of Bitcoin (BTC) are gradually shifting from a risky asset similar to technology stocks to a US dollar asset alternative closer to gold. Therefore, if the market's concerns about US Treasuries and Japanese bonds ease, and the upside risks of inflation do not subside, high US Treasury yields (if they remain above 4.5%) may continue to put pressure on the price of bitcoin.

Inflation Outlook and the Federal Reserve's Hawkish Tone Resurfaces

On the same day, Federal Reserve Chairman Powell held his first meeting with President Trump at the White House since Trump began his second term in January. They discussed topics such as economic growth, employment, and inflation. Powell reaffirmed the Federal Reserve's "independence," emphasizing that interest rate decisions would be based on "non-political" analysis. Trump expressed a different view, stating that not lowering interest rates is a "mistake."

At the same time, Dallas Fed President Lorie Logan made hawkish comments, saying that the Fed "may need to keep short-term interest rates unchanged for quite some time" and stressed the need for more time to observe changes in the balance of risks. After a cumulative 100 basis point rate cut in the second half of last year, the Fed has maintained the target range for the federal funds rate at 4.25%-4.5%. Although the US CPI rose by 2.3% year-on-year in April, indicating that the current level of interest rates is still restrictive and there is room for theoretical downward adjustment (if inflation does not rebound), the market still needs to be vigilant: if inflation rises, its debt-diluting effect combined with the widening fiscal deficit may erode investors' confidence in US Treasuries as a "super safe" asset.

Market Outlook: Focus on Inflation Data, Bitcoin Technicals Weaken

Market focus is shifting towards key economic data, especially the US core PCE price index to be released on Friday (May 30), which will provide clearer clues about the inflation outlook.

On the daily chart, Bitcoin has effectively lost the key support level of $107,300, indicating that short-term selling pressure has significantly increased. If this position cannot be quickly recovered, it currently seems that Bitcoin has likely entered a phase of high-level fluctuation and consolidation, with the risk of a pullback not to be ignored. Investors need to closely monitor the defense of this key support level. However, from a medium-term perspective, the overall upward trend of Bitcoin has not been broken, and the long-term structure still maintains an upward trajectory.