Weekly Crypto Market Update - March 25, 2024

LAST WEEK RECAP:

• U.S. Federal Reserve keeps key rate unchanged for 5th straight time, signals 3 rate cuts this year.
• Bitcoin spot ETFs hit 4 consecutive days of outflows.
• Ethereum Foundation faces inquiry from “state authority” and Fortune reported SEC is investigating ETH.
• Japan’s GPIF, the world’s largest pension fund, explores bitcoin as an investment.
• BlackRock launches first tokenized fund on ethereum blockchain.
• Coinbase Derivatives will begin futures trading on DOGE, LTC, and BCH on April 1.
• Bank of Japan raises interest rates for first time in 17 years.

LEGACY MARKETS – DXY

DXY is still within the larger range 106-100. Although it picked up a bit to 104 with strong US inflation data, the Fed sent a rather clear message that some resilience in inflation data won't be a barrier to cutting as long as inflation shows downward momentum.

DXY’s gain is mostly done and a potential downside move could provide foundation for risky asset rally.

LEGACY MARKETS – VIX

VIX retreated from its recent gains after Fed gave the dovish message, and is likely to continue its low level until surprised inflation data. Historically in an election year, VIX tends to stay low in first half of year and then picks up into the Q4.

BTC WEEKLY VIEW

BTC has found short term local bottom at $62K and then rallied after dovish Fed. Although we save consecutive outflow in BTC spot ETF, the volume was not significant and mainly came from Grayscale, resembling more of a consolidation. Additionally, Grayscale's current holdings have decreased to 350K BTC, less than half of the ETF's total holdings of 820K BTC.

ETH WEEKLY VIEW

ETH is still consolidating with market now pricing out a May ETF approval given recent developments including Ethereum Foundation investigation. But once BTC dominance ratio (BTC.D) stabilizes after halving, ETH is likely to catch up quickly with restaking narratives.

ETH/BTC

ETH/BTC is back to retest 0.05 key support level, ETH/BTC is likely to consolidate at this level until May’s spot ETH ETF hope is fully priced out and BTC.D stabilizes.

TOTAL3 USD MARKET STRENGTH

TOTAL3 continues with breakout with L1/L2 and BTC ecosystem leading, with meme coins cooled down, we expect liquidity to rotate back to more broad altcoins especially after liquidity improves when we’re closer to halving and Fed showing dovish stance.

TOTAL3 BTC MARKET STRENGTH

ALT/BTC is still in the uptrend even though liquidity is still low and mainly absorbed by previous meme coins. With meme coins cooled down and BTC entering halving, we expect more broad liquidity pick up across alts sectors.

SUMMARY

• Federal Reserve signalled 3 cuts in 2024 despite sticky inflation, this dovish stance helped risky assets including crypto rally and BTC formed short-term bottom.
• With the halving approaching and the Fed signaling dovishness, the establishment of the bull market in its early stages has once again been confirmed.

DISCLAIMER:

The information in this report is for information purposes only and is not to be construed as investment or financial advice. All information contained herein is not a solicitation or recommendation to buy or sell digital assets or other financial products.

This post is prepared by Kairon Labs Traders: Joshua van de Kerckhove, and Patrick Li

Edited by: Marianne Dasal