Over the past week, the prices of crypto assets have been significantly affected by the information landscape. On February 28, BTC hit a low of $78,258, and the market sentiment fell into extreme fear. With the Trump administration proposing to "include 5 tokens in the new strategic reserve," the BTC price rebounded quickly, breaking through the long-term resistance level and reaching a high of $95,000, before stabilizing around the $92,000 to $93,000 resistance level.
Closely following was the Trump tariff policy announced on March 3 Eastern Time, which caused the prices of crypto assets led by BTC to plummet, resulting in a roller coaster ride. Currently, the price of BTC is fluctuating around $83,000, with a maximum price fluctuation of over 10% in 24 hours. The maximum price fluctuation of ETH in 24 hours exceeded 15%, with a low of $2,002 (the above data is from Binance spot, real-time data as of 4:00 pm on March 4).
Although the current market narrative is relatively favorable for crypto assets, the macroeconomic data and market sentiment are having a significant impact on the price trend of crypto assets. In the face of obvious risk aversion sentiment, it is recommended that investors closely monitor basic information such as US Treasuries and wait for macroeconomic signals.
Market Analysis
The Trump team has a grip on the crypto market, and the crypto market is experiencing violent fluctuations
On March 2, Trump posted on social media that the US will create a crypto currency strategic reserve, which will include BTC, ETH, XRP, SOL, and ADA. Affected by the news, the crypto currency market rebounded sharply, with ADA surging by more than 60%. Although BTC's market dominance has declined, its gains still exceeded 10%.
From Trump's election to his successful inauguration, the crypto market has always been an important bargaining chip for Trump. Summarizing past events, the Trump team's ability to influence the crypto market through information has become increasingly proficient, whether in terms of timing or technical control. The first crypto currency summit to be held at the White House on March 7 is also highly anticipated, and how will Trump move to "ensure that the US becomes the world's crypto currency capital"?
BTC ETF net outflows hit a record high in February, and market performance in March is expected to be poor
Recently, BTC ETFs have experienced net outflows for 8 consecutive days, with a net outflow of about $2.4 billion in the past week. Coinglass data shows that February was the worst month for BTC ETF outflows on record. With the risk aversion sentiment in the market and the exit of arbitrage funds, the performance of BTC ETFs in March may not be optimistic. Data shows that on the 3rd, the total net outflow of BTC spot ETFs was $74.19 million.
The ETH market is also under severe pressure. In February, the ETH lending market experienced the most severe liquidation event in 12 months, with nearly $500 million in collateral being liquidated, mostly on the Aave and Compound platforms. The surge in liquidations coincided with the overall market decline, leading to a significant drop in the total crypto market capitalization and triggering a large number of forced liquidations. This was the second highest monthly liquidation amount in DeFi history, second only to the market crash in May 2021.
US crypto regulation is entering a spring, with a large number of institutions recently settling with the SEC
The SEC has recently withdrawn its investigations into companies such as Robinhood, Gemini, UniSwap Labs, MetaMask, and OpenSea, and has reached settlements with Coinbase and Kraken. Compared to the Biden administration, the SEC has undergone a major shift in its approach to crypto currency regulation.
The SEC's statement on Monday said that the Crypto Assets and Cyber Unit will hold its first roundtable meeting at its headquarters in Washington, D.C. on March 21. The theme will be "How We Got Here and Where We Go From Here - Defining the Securities Status." This will be part of a series of "spring sprints towards crypto clarity" meetings.
Macro & Data Sharing
Trump's tariff policy finalized, US stocks shaken
On March 3, US President Trump said that reciprocal tariffs will begin to be collected on April 2, and the policy of imposing a 25% tariff on goods from Mexico and Canada will take effect on March 4. Trump said there is no room for consensus on tariffs on Mexico and Canada. In addition, Trump also said he would consider a free trade agreement with Argentina.
Under the heavy pressure of Trump's tariff policy, the three major US stock indexes fell sharply at the end of the trading day, with the S&P 500 index recording its biggest intraday drop of the year and the Nasdaq erasing its gains since the last election. Market panic sentiment has surged, with technology and chip stocks under pressure, Nvidia plummeting nearly 9%, Broadcom falling more than 6%, and Amazon dropping more than 3%. The "safe-haven asset" gold has also risen back above $2,900. The market is closely watching the European Central Bank meeting and the non-farm payroll report.
Weak US economic growth data is evident, and the market is urgently seeking solutions
Consumer credit and housing market data have continued to decline sharply, with new home sales hitting a historic low, and new housing starts also starting to decline after the post-pandemic boom, heightening market fears of weak economic growth.
Currently, most of the US economic surprise indexes have turned negative. Affected by the weakness in exports (from -$29 billion to -$250 billion) and consumer spending (from +2.2% to +1.3%). The Atlanta Fed's first-quarter GDP growth forecast saw a record decline last week, from +2.2% to -1.3%.
Bond market performance is mixed, with Japanese bond yields hitting new highs
On March 4, Wind data showed that the yield on Japan's 30-year government bonds rose to 2.37%, the highest level since October 2008. Bloomberg data shows that US dollar bond market yields have declined significantly in the past week.
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