This is the Kvarn Pulse newsletter, where we explore the latest developments in the cryptocurrency markets and macroeconomic trends.
Week by numbers
The last week has been strongly bullish in the crypto market. The price of the largest cryptocurrency, bitcoin, rose by about nine percent, as did the price of the second largest cryptocurrency, ether. The total market cap of the rest of the crypto market (excluding the largest stablecoins) rose by about seven percent.
As bitcoin’s price developed slightly better than the alt-coin market, bitcoin dominance rose by about one percent. As the prices of bitcoin and ether moved in sync, there was no significant change in the ETH/BTC ratio.
During the upward-trending week, there were some quite substantiaö price increases in individual alt-coins. Among the tokens in Kvarn X trading service, the strongest weekly gains were made by IMX (+37%), FET (+34%), and STX (+30%). The few tokens that remained in the red during overall bullish week included MNT (-1%).
Headline Shake The Stock Market
Stock markets have fluctuated in recent days in step with the news flow. On Monday, April 21, 2025, U.S. stock indexes saw a sharp drop when rumors began over the weekend that U.S. President Donald Trump was considering firing Federal Reserve Chairman Jerome Powell.
Even though both the seriousness of the president's intentions and their legal feasibility remained quite unclear, markets became concerned about the possibility that the central bank’s political independence could be at risk.
On Tuesday, the markets sighes relief when Trump said he was not intending to fire Powell. Additional relief came from the president’s statements about tariffs, which were widely interpreted as a de-escalation in the ongoing trade war. Driven by this positive news, the S&P 500 stock index rose more than 4.5 percent from Monday’s close to Wednesday’s close.
While stock markets fluctuated back and forth, the price of the largest cryptocurrency, bitcoin, behaved in a rather interesting way, that may be worth noting. Unlike the stock markets, bitcoin's price appeared to react positively to the rumors of Powell's dismissal. In this respect, its behavior resembled more that of gold (gold price also rose on Monday) than that of stocks.
This phenomenon has been widely interpreted as a sign that bitcoin might begin to show the characteristics of gold, acting as a safety valve through which investors could seek “insurance” against uncertainties related to the U.S. dollar.
While bitcoin's price rose on Monday like gold, the very next day it moved again more in line with the stock market. On Tuesday, bitcoin’s price rose sharply alongside stock indexes, as Trump’s calming remarks regarding both Powell and China restored market risk appetite.
Thus, this week we have seen bitcoin’s price reacting positively to both so-called good and bad news. We find this quite interesting. It is worth observing to what extent bitcoin’s future price behavior resembles that of tech stocks, which thrive on risk appetite, and to what extent that of gold, which rises in times of uncertainty. The past few days have offered the positive sides of both.
What’s Next?
The sharp price rises in recent days naturally prompt the question of where stock and crypto markets might be headed next.
Regarding the stock market, in last week's Kvarn Pulse newsletter, we identified the 5500-point level of the S&P 500 index as the first interesting threshold. We wrote then:
“The first and most important threshold condition would be that the S&P 500 index should rise above the 5500-point level. This is the level from which the stock markets opened on Thursday 3.4.2025. It is therefore the highest level seen in the S&P 500 “since Liberation Day”.'”
From the graph below, we can see that just like the “relief rally” seen on April 9, 2025, the rise on Wednesday, April 23, 2025, also brought the index right to this 5500-point threshold, from which it now appears to be rejected again.
As long as the 5500-point threshold remains unbroken, we maintain our base assumption that the direction of the stock market would still be downward.
Below, the first interesting level could be the opening price on Tuesday, April 22, 2025, at 5200 points. If this level holds, it would form a new “higher low” and increase expectations for a new rise.
We see the range of 5200 to 5500 points forming a range, the breach of which in either direction would be the next more informative event. The range 5200–5500 appears primarily as noise, from which we are cautious to draw strong conclusions. Of course, it is quite exceptional for a six percent fluctuation range to be considered noise, but the recent weeks' volatility has been exceptional indeed.
What About Crypto?
Regarding the stock market, the situation looks fairly well interpretable from a technical analysis perspective. As mentioned above, the largest cryptocurrency bitcoin has partly followed the stock market and partly clearly diverged from it. This makes its price behavior slightly more ambiguous.
First, it must be recognized that while the stock market has fluctuated back and forth, bitcoin’s price has been in a consistent upward trend over the past two weeks.
Second, it should be noted that its dollar price has made a clearly higher high compared to the March-end peak of about $89,000.
Third, it is good to be aware that despite the volatility seen in between, bitcoin’s dollar price is now clearly higher than before “Liberation Day” and the trade war that started with it.
Based on the BTC/USD price, the situation appears unambiguously as if the bottom has been seen, a new “higher high” made, and a new upward trend clearly begun.
The certainty of the interpretation, however, weakens if we change either part of the BTC/USD pair.
If, instead of bitcoin’s price, we look at the total value of the rest of the crypto market, excluding the largest stablecoins (TOTAL2-USDT-USDC), we can see that, unlike bitcoin, it is currently still drawing a clearly lower high.
If, instead of bitcoin’s dollar price, we look at its euro price, we can see from the graph below that unlike the dollar price, the recent price increase has brought it just slightly above the March peak. Over the past month, the U.S. dollar has weakened significantly against the euro, which should be kept in mind when following dollar prices.
So are we in an uptrend or not?
Technically, the largest cryptocurrency bitcoin is in an uptrend. However, the trend still contains several factors causing uncertainty. The clarity of the “higher high” depends heavily on the fiat currency used as the benchmark; the new “higher high” was made with a one-off impulsive move, and the alt-coin market still shows no signs of a trend reversal.
The coming days may shed more light on the matter. In the short term, bitcoin’s price seems ready for a correction. The Relative Strength Index has clearly risen into overbought territory and has since turned downward.
Following this correction may be useful. If it ends above the approximately $85,000 area seen over the weekend, it would clearly be a “higher low.” This would significantly increase confidence in a new upward trend.
Such a first “higher low” after a first “higher high” has often represented a good buying opportunity, offering a fairly good risk/reward ratio with high potential and a clear invalidation point. The price development over the next week is therefore worth watching closely.
With these thoughts, we leave the reader to follow the very interesting situation in the crypto market, as bitcoin makes its first “higher high” since January.
We will return again next week with the Kvarn Pulse newsletter, so stay tuned!
