Matrixport Market Observation: Long-short game intensifies, Fed dovish signals boost market sentiment

BTC has risen for two consecutive weeks, and the game between bulls and bears has intensified, and the overall trend is fluctuating and upward. Last week, BTC price opened at $81,133.53, climbed to $87,032.24 on the 19th, and fell slightly to $83,134.01 due to the Fed's interest rate resolution. BTC has risen for two consecutive days since the 23rd, reaching a high of $88,781.22, and is currently stable at around $87,000, with the largest increase in the week 9.42%.

ETH is still in a consolidation phase this week, with an overall upward trend. Currently, ETH price is hovering around $2,000, with the largest increase in the week 12.43% (the above data comes from Binance Spot, real-time data on March 25 at 17:00).

The three major indicators of US stocks have stabilized. As of the close of March 24, the Nasdaq rose by more than 2%, the S&P 500 rose by 1.76%, and the Dow Jones rebounded by nearly 600 points, returning to more than 42,000 points.

Market Interpretation

S &P 500 breaks through 200 daily moving average, and positive signals appear on the technical side

On March 24, the S&P 500 index broke through the 200-day moving average (200 DMA), breaking for the first time since March 10, indicating that the market may usher in a new trend shift. BTC also broke through its 200-day moving average with a breakout point of $85,046, the current price is close to $88,000 and the next target is $93,245 for short-term holders realization prices. This price is often regarded as a key technical resistance level for the market.

After a 10% adjustment, the S&P 500 rose 1.7% on March 24 to break through the 200-day moving average, indicating that stock market sentiment has rebounded. BTC's performance echoes the stock market rebound, and positive signals appear on the technical side. Overall, the rebound of the stock market has supported BTC, and the market has shown certain upward potential in the technical aspects.

BTC Spot ETF Capital inflows rebound, price bottoms out and rebounds

After five consecutive weeks of declines, the BTC Spot ETF has seen capital inflows this week, showing a rebound in demand for BTC. Data shows that the BTC Spot ETF recorded a net inflow of $1.05 billion in five trading days this week. This inflow of funds supports the rebound in BTC prices. Meanwhile, stablecoin inflows also reached $958 million and overall capital inflows reached $1.95 billion, indicating that despite the market panic, funds are still flowing and providing support for the market.

ETH exchange supply drops to a decade-lowest, market liquidity tightens

On March 24, Santiment data showed that the available supply on the ETH exchange fell to 8.97 million, the lowest level in nearly a decade, accounting for about 7.5% of its market value. This change shows that market liquidity is tight, with DeFi and pledged products attracting funds, resulting in a decrease in ETH supply in the market. Although the selling pressure has been eased, supply tightening has also increased price volatility, and the market is more sensitive to large-scale transactions.

Meanwhile, the outflow of $401 million in ETH ETF in March, accounting for 5.9% of total assets, while the outflow of BTC ETF was $893 million, accounting for 0.9%. Year to date, ETH has fallen 37%, while BTC has fallen 7.5%. Although there were slight inflows in ETH ETF in early March, the overall capital inflow was much lower than the previous two months, and the gap with BTC ETFs was large. Since March, ETH price has fallen by 8.5%, compared with 3% increase in BTC. Overall, market sentiment is weak and capital outflows continue, resulting in relatively weak ETH performance.

The market has entered a consolidation period, and the on-chain activity has cooled down

According to data from Glassnode on March 24, BTC on-chain activity has declined and the number of transactions has decreased, indicating that the market has entered a revision period. BTC's "Hot Supply" indicator fell from 5.9% to 2.8%, a decline of more than 50%, reflecting the decrease in active capital in the market.

In addition, the proportion of BTC miners in on-chain transactions fell to 4.23%, the lowest since November 2022, indicating that miners have reduced their currency selling behavior and reduced selling pressure. The total open contracts in the futures market fell from $57B to $37B, a decrease of about 35%, indicating a significant decrease in speculation.

These data show that market liquidity has tightened recently and activity has decreased in the short term, but this stage may provide a basis for subsequent market accumulation and recovery.

Market hot spots

Dovish Fed signal boosts market stabilization, stocks and bonds rebound

At the interest rate meeting on March 19, the Federal Reserve made a decision that meets market expectations and kept the benchmark interest rate in the range of 4.25%-4.5%. At the same time, the Federal Reserve hinted that it plans to cut interest rates by another 50 basis points in 2025, and announced that it would adjust the speed of bond reduction to reduce the upper limit of US Treasury holdings, from $25 billion per month to $5 billion.

Federal Reserve Chairman Powell said that economic growth expectations were lowered and emphasized the impact of tariff policies on inflation. Despite structural problems in the economy, the Fed's dovish stance supports the market and drives stocks to rebound. Last week, the U.S. dollar index rose 0.25%, while the Nasdaq, S&P 500 and Dow Jones rose 0.17%, 0.51% and 1.2%, respectively. Meanwhile, the 2-year and 10-year U.S. Treasury yields fell 1.59% and 1.39%, respectively, to 3.9670% and 4.2580%.

SEC Statement Confirms PoW Mining is not regulated by the Securities Law and provides a legal basis for the approval of PoW Token ETFs

On March 20, the U.S. Securities and Exchange Commission (SEC) issued a statement stating that cryptocurrency mining activities based on the Proof of Work (PoW) mechanism do not constitute securities issuance and do not require registration in accordance with the Securities Act. This statement reduces legal uncertainty in PoW tokens such as Litecoin and may pave the way for future approval of PoW cryptocurrency ETFs such as Litecoin ETFs.

Trump promises to push the United States to become a BTC superpower

On March 20, US President Trump said at the Blockworks Digital Assets Summit that he plans to build the United States into a "BTC superpower" and end the former government's regulatory restrictions on cryptocurrencies. He called on Congress to pass legislation that would create rules for stablecoins and market structures to promote innovation and investment. At the same time, Trump mentioned that the United States will enhance its global leadership in the crypto field through measures such as the White House Digital Assets Summit and the establishment of strategic BTC reserves.

Disclaimer: The above content does not constitute investment advice, sale offer or purchase offer invitation to residents of the Hong Kong Special Administrative Region, the United States, Singapore, and other countries or regions where such offer or invitations may be prohibited by law. Digital asset trading can have great risks and instability. Investment decisions should be made after careful consideration of personal circumstances and consulting a financial professional. Matrixport is not responsible for any investment decisions based on the information provided on this content.