Welcome to Kvarn Pulse, your go-to newsletter for timely insights into the latest developments in the cryptocurrency markets and broader 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 four percent, and the price of the second largest cryptocurrency, ether, by as much as 34 percent. The total market cap of the rest of the crypto market (excluding the largest stablecoins) rose by about twelve percent.
As the alt-coin market rose more strongly than bitcoin, bitcoin dominance saw a decline of about 3.5 percent. With ether’s price development clearly stronger than the rest of the market, the long-declining ETH/BTC ratio rose by almost thirty percent.
During an overall bullish week, there were some very strong weekly gains in individual tokens. Among the tokens in the Kvarn X trading service, the biggest price increases came from meme coins WIF (+72%) and PEPE (+56%), as well as the aforementioned ether (+34%). Despite the market’s upward direction, EOS (-8%), BCH (-6%), and CRV (-5%) ended the week in the red.
Tariff Pause Triggered Stock Surge
The latest turn in the trade war that began with “Liberation Day” at the start of April came on Monday. After negotiations between the United States and China over the weekend, we heard on Monday that both sides would put their previously implemented import tariffs—so high they effectively resembled a trade embargo—for large part on hold for 90 days.
The stock market received this news quite jubilantly. The S&P 500 stock index jumped up on Monday by about three percent, and the rise continued on Tuesday by about one percent.
Two weeks ago, in the Kvarn Pulse newsletter, we stated that the true test of the recent stock market rally would be seen around the 5650–5800 point range for the S&P 500 index. At that time, we defined the following key levels as our monitoring targets:
- 50-day moving average (then 5613 points)
- The S&P 500 index’s closing price just before Liberation Day (about 5670 points)
- 200-day moving average (then about 5746 points)
- The local high from March (about 5800 points)
Two weeks later, reviewing the situation, we can see that the S&P 500 has risen above all of these key levels. This means we find it justified to revise our base assumptions about the market's general direction to be significantly more optimistic. We are thus currently in an unequivocal uptrend, until price development proves otherwise.
The next level worth monitoring above is naturally the all-time high for the S&P 500 index seen in February, around 6,150 points. Below, a level worth noting could be the local bottom from Tuesday, May 6, 2025, around 5,600 points. Falling below this level could be one of the first reasons to begin questioning the validity of the uptrend.
So the longer-term outlook has turned clearly optimistic in recent weeks. Does this mean now is the right time to go shopping and go “all in”?
At the very least, it is worth considering the possibility of a short-term dip. The S&P 500 index has climbed about fifteen percent in 2.5 weeks—comparable to a good annual return. It would seem quite natural that after such a steep rise, we might see the formation of a local top, and possibly a slight dip down before the rise would continue.
The low-movement, “spinning top”-like daily candle seen on Wednesday, May 14, 2025, in the S&P may point to the market having found a temporary equilibrium.
So, we find “putting on the buying pants” quite justifiable at the moment, but there is probably no urgent rush to execute purchases—at least not in the stock market.
And What About Crypto?
Earlier, we suggested that after a steep rise, the stock market may be facing the formation of a local top and potentially some kind of dip. If we now turn our gaze to the crypto market, we see some signs that this phenomenon may already have begun.
The TradingView “OTHERS” ticker, which represents the total market cap of smaller cryptocurrencies, has in the past 24 hours turned sharply downward, falling below Tuesday’s local bottom.
This downturn in the prices of higher-risk cryptocurrencies could be one of the first signs of a shift in the market's risk appetite.
This reversal is not yet as clearly visible in the price of the largest cryptocurrency, bitcoin. However, we find it useful to monitor the bitcoin price area of about $100,000–101,000. If no support level is found in this range, a deeper dip toward the previous local bottom of about $93,000 could be ahead.
To be clear, however, the price movements of the past 24 hours do not give grounds to question the ongoing uptrend. Bitcoin’s price is still clearly above the trend line drawn from previous lows, and the past day’s downward movement appears mostly as noise.
The most interesting question for the coming week may be the level at which bitcoin’s next local bottom forms. If the local bottom forms above $93,000, this would be a new “higher low,” and a very encouraging sign of the continuation of the uptrend.
Summary
We may therefore head into the next week with the following takeaways:
- The general sentiment of the financial markets appears to have clearly returned to “risk on” mode. This is probably not worth fighting against, until price developments once again give more reason for caution.
- In the short term (next few days), bitcoin’s and the crypto market’s momentum appears to be weakening.
- The next risk/reward-wise ideal opportunity for new crypto purchases may arise if this momentum turns positive again while bitcoin’s price is still above $93,000.
- The stock market looks somewhat overstretched and the it’s rise to be currently slowing, so it’s probably not wise to go in fully until we either see a clear dip or a sign of momentum returning to the uptrend.
As is now already customary, we again remind readers of the significance of individual trade or geopolitical news. The news received on Monday about putting tariffs on hold is the latest example of how headlines can quickly shift the direction of the market.
With these thoughts, we leave the reader to follow the interesting situation in the crypto market, as the investment markets seems to shake off the worries of the trade war.
We’ll return again next week with the Kvarn Pulse newsletter—so stay tuned!
