This is the Kvarn Pulse newsletter, where we explore the latest developments in the cryptocurrency markets and macroeconomic trends.
Week by numbers
In the past week, the crypto market has been on an upward trend. The price of the largest cryptocurrency, bitcoin, rose about eight percent, and the price of the second-largest cryptocurrency, ether, about seven percent. The total value of the rest of the crypto market (excluding the largest stablecoins) rose about eight and a half percent.
Bitcoin dominance, which describes bitcoin’s share of the total value of the crypto market, rose during the week by about one percent (about 0.6 percentage points). The ETH/BTC ratio, which describes the relationship between the two largest cryptocurrencies, on the other hand, fell by about two percent.
The biggest weekly climbers in Kvarn X trading service's token selection were HNT (+33%), FLR (+32%) and JASMY (+32%). In a generally upward week, the biggest price decliners were XTZ (-13%), EOS (-8%) and ENA (-6%).
Markets recover from tariff shock
When the previous Kvarn Pulse newsletter was published on Thursday 10.4.2025, the stock and crypto markets had just experienced a sharp drop triggered by the tariff war that began on “Liberation Day”, and a bounce back triggered by the pausing of the tariffs on Wednesday 9.4.2025.
Compared to this roller coaster, the last week in the markets has been somewhat calmer. In tariff and trade policy, there have been some market-pleasing news (especially regarding Apple) and on the other hand, some less than pleasing (especially regarding Nvidia). Overall, the week can be seen as a recovery from the shock that followed “Liberation Day”.
In terms of the crypto market, the situation looks quite similar. The price of the largest cryptocurrency, bitcoin, rose about fifteen percent in a few days after the tariffs were put on hold. However, on Sunday, the altcoin market began to weaken against bitcoin (OTHERS/BTC ratio turning downward). This gave a hint that there might not be much more room for bitcoin’s dollar price to rise, and in recent days we have indeed seen mainly sideways movement.
What’s next?
The strong rally during past week, especially in the stock market, naturally raises the question of what kind of price movements could be expected next?
One possibility, of course, is that the rise seen in the last week simply continues. In this scenario, the panic selling triggered by “Liberation Day” would have already formed the bottom of the bear market near the 200-week moving average. The next direction would again be sustainably upwards, towards the all-time price records seen in January and perhaps beyond.
Everything is, of course, possible. Before giving more weight to this hypothesis, we must set a couple of necessary threshold conditions. Until any of these are seen, we must approach the new upward trend with considerable caution.
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”.
The next test would be about 5670 points. This was the level at which the markets closed on Tuesday 2.4.2025, i.e. the last day before “Liberation Day”. If this level were surpassed, it would already be a relatively strong signal that the markets had let go of the worries caused by the tariff war started by “Liberation Day”.
The third and final threshold would be getting over the local top of March (about 5800 points). Getting over this level would, in our view, indicate strong optimism, and once surpassed, we would be willing to bet on the new all-time high.
At the moment, none of these conditions are yet met. In addition, it seems that neither the market euphoria triggered by the halting of “reciprocal” tariffs on 9.4.2025 nor the tariff reliefs concerning especially the large company Apple on Monday 14.4. were enough to bring the S&P 500 index even to the very first threshold. In the short term, it seems that breaking through this 5500-point limit may be quite tough, unless some clearly market-encouraging news is received in the trade war (which, of course, could happen any day).
What about cryptos?
With the S&P 500 index currently bouncing around the 5400-point area, unable yet to break through it sustainably but not turning into a downward trend either, we are trying to sniff out the next move in the investment markets by examining the price of the largest cryptocurrency, bitcoin.
From the graph below, we can see that bitcoin’s price has in recent days formed a “range”, with a sustainable break above 86,000 dollars proving insurmountable on two occasions.
We are currently near the bottom of the range, and the price development in the coming days could be quite informative. As long as the lower edge of the range around 83,000 dollars holds, it is possible to see justification for the continuation of last week’s upward movement. A fall below this level, on the other hand, would be a strong indication of the end of the upward movement.
If the price rise stopped around this area, it would draw a new “lower high” in the downward trend that has lasted about three months.
Then our next interest would be whether the previous local bottom around 74,000 dollars holds, or whether even lower figures would be seen.
Sideways movement ahead?
This brings us to the final point of this week.
“Liberation Day” and the triggered tariff war created historically exceptional volatility in the markets, and caused, for example, an unusually large drop in the S&P 500 index in three days.
From the perspective of technical analysis, this means that the stock index now has an exceptionally large range of movement between the opening price of Thursday 3.4.2025 and the intraday bottom of Monday 7.4.2025, before strong conclusions can be drawn about long-term movements. In principle, changes in the S&P 500 index between 4800 and 5500 could be interpreted as mere noise without a trend.
It is of course a rather staggering idea that movements equivalent to typical annual changes in a stock index should be interpreted as mere noise, but the fluctuation range within this range is indeed nearly 15%.
The lower edge of the range (S&P around 4800) represented quite maximal pessimism regarding tariffs, and we do not consider it most likely that it would be breached very soon. On the other hand, as stated earlier, exceeding the 5500-point and especially the 5800-point levels would require a clear change in market sentiment, which we do not expect unless there is a clear easing seen in the tariff war (which, as said, may happen any day).
Our base assumption is that in the coming weeks we could see more sideways movement within this range, rather than a trend that would lead out of it. This means that for a trader, “mean reversion” trades (buys at the bottom of the range, sells at the top) might be more fruitful than strategies based on following a trend.
For bitcoin’s price, the upper end of the range seems to be near 89,000 dollars, and the lower end around 74,000 dollars. However, we note that in our opinion, bitcoin’s price is still quite high given the environment, so we would advise to also keep an eye out for the scenario where bitcoin’s price could still fall out of the lower end of its own range, even if the S&P index remains within its own.
With these thoughts, we leave the reader to follow the quite interesting situation of the investment markets, as stock and crypto prices recover from the initial shock of the tariff war.
We will return again next week with the Kvarn Pulse newsletter, so stay tuned!
