Crypto Market Stabilizes Amid Tariff Relief Hopes
The crypto market has seen a stabilization in recent days following comments from Commerce Minister Howard Lutnick regarding potential tariff relief for Canadian and Mexican imports covered by NAFTA. This development has helped Bitcoin (BTC) bounce back to nearly $90K, with the total crypto market cap rising to the $2.9 trillion mark.
Market Sentiment Reverses Amid Fed Rate Cut Bets
The recent trade war fears and market volatility have reignited bets on Federal Reserve (Fed) rate cuts. According to CME's FedWatch tool, the market is now pricing in at least three rate cuts for this year, while the 10-year Treasury yield has retreated to 4.15%, down from 4.80% earlier this month. This shift in market sentiment has led to a reversal in the crypto market, with BTC and ETH prices rising by over 6% in the past 24 hours.
Tariff Relief Hopes Boost Market Sentiment
The hopes of tariff relief have boosted market sentiment, with investors becoming more optimistic about the future prospects of the crypto market. The stabilization of the crypto market has also led to a decrease in volatility, with BTC and ETH options-based implied volatility term structure showing a significant drop.
Derivatives Positioning Remains Light
Despite the recent price surge, derivatives positioning remains light, with traders continuing to take cautious bets on the market. The basis near 6% indicates that traders are not overly bullish or bearish about the market's future prospects.
Technical Analysis Suggests Further Upside
The technical analysis of the dollar index suggests further losses for the greenback, which could bode well for riskier assets like cryptocurrencies. The German-U.S.-bond yield spread widening in the EUR-positive manner is also a sign that the DXY will continue to fall.
Crypto Equities Perform Well Amid Market Volatility
The recent market volatility has not affected crypto equities, with companies like MicroStrategy (MSTR) and Coinbase Global (COIN) performing well. MicroStrategy's stock price closed at $275.15 on Tuesday, up 9.66% from the previous day.
ETF Flows Show Net Outflows for Spot BTC ETFs
The overnight flows show net outflows of -$143.5 million for spot BTC ETFs, while cumulative net flows stand at $36.73 billion. The total BTC holdings in these funds are approximately 1.139 million.
Chart of the Day: Implied Volatility Term Structure
The chart shows a graphical representation of implied or expected volatilities at different expirations. The big bump higher on March 8 indicates that traders expect Trump's comments at Friday's White House Crypto summit to lead to volatile market conditions.
Other Key Moments
- Japan's Metaplanet announced the purchase of 497 BTC at $88,448 per coin.
- BlackRock's Bitcoin ETF (IBIT) registered its highest trading volume in three months last week.
- Aave DAO proposed a plan to boost AAVE token value and reward users.
The crypto market is expected to remain volatile in the coming days, with traders closely watching the developments surrounding the White House Crypto summit.