By Omkar Godbole (All times ET unless indicated otherwise)
The crypto market is looking to regain poise, with bitcoin bouncing above $81,000 ahead of tomorrow’s U.S. inflation report. Broadly speaking, the recovery from overnight lows is led by layer-1 and layer-2 coins, with gaming tokens also rising.
The rebound comes amid indications of “peak fear” on Wall Street, a dynamic typically observed at market bottoms.
Interestingly, the spread between one- and six-month futures tied to the VIX, Wall Street’s so-called fear gauge, crossed above zero on Monday, signaling a rare positive reading and reflecting expectations for greater volatility in the short-term than six months out. Volmex’s Bitcoin volatility index shows a similar inversion, although that is more common in the crypto market.
“Is the worst behind us? It’s impossible to say,” noted Ilan Solot, senior global market strategist at Marex Solutions, in an email to CoinDesk. “However, the risk-reward for entering long positions in U.S. stocks is improving. The VIX index for volatility is now significantly inverted, meaning near-term contracts are priced higher than long-term ones. This is an important sign of stress, but it can also indicate extremes in sentiment.”
Meanwhile, bullish positioning in the yen appears stretched, suggesting the haven currency’s rally may soon lose steam, potentially providing relief to risk assets in the process.
The Truflation U.S. Inflation Index, which offers a daily, real-time measurement of inflation based on data from over 30 sources and 13 million price points, has dropped to 1.35%, extending a decline from February’s high of over 2%. This trend hints at the progress on inflation the Federal Reserve is looking for before considering rate cuts.
On Wednesday, the Bureau of Labor Statistics is expected to show a month-over-month increase of 0.3% for February. This would be a notable deceleration from January’s concerning 0.5%. A soft reading could validate traders’ expectations for rapid rate cuts starting in June, possibly leading to renewed risk-on sentiment. However, it’s important to note that Chairman Jerome Powell has indicated the Fed is waiting for clarity on President Trump’s policies before making its next move, suggesting that soft CPI data alone might not be enough.
On the other hand, a hotter-than-expected CPI print could derail recovery prospects, potentially setting the stage for a deeper slide in bitcoin and the broader crypto market. Some analysts even predict bitcoin could drop to $74,000.
“A bearish pattern persists on the daily timeframes, indicating a strengthening sell-off after failing to hold above the 200-day moving average. The scenario of a pullback to the $70,000 to $74,000 range still looks most probable,” said Alex Kuptsikevich, senior market analyst at FxPro, in an email to CoinDesk. Stay alert!
What to Watch
- Crypto:
- Macro
- March 11, 8:00 a.m.: The Brazilian Institute of Geography and Statistics (IBGE) releases January industrial production data.
- Industrial Production MoM Est. 0.4% vs. Prev. -0.3%
- Industrial Production YoY Est. 2.2% vs. Prev. 1.6%
- March 11, 10:00 a.m.: The U.S. Department of Labor releases January’s JOLTs report (job openings, hires, and separations).
- Job Openings Est. 7.75M vs. Prev. 7.6M
- Job Quits Prev. 3.197M
- March 12, 4:45 a.m.: European Central Bank President Christine Lagarde gives a speech at the 25th “ECB and Its Watchers” conference in Frankfurt.
- March 12, 8:00 a.m.: The Brazilian Institute of Geography and Statistics (IBGE) release February consumer price inflation data.
- Inflation Rate MoM Est. 1.3% vs. Prev. 0.16%
- Inflation Rate YoY Est. 5% vs. Prev. 4.56%
- March 12, 8:30 a.m.: The U.S. Bureau of Labor Statistics (BLS) releases February consumer price inflation data.
- Core Inflation Rate MoM Est. 0.3% vs. Prev. 0.4%
- Core Inflation Rate YoY Est. 3.2% vs. Prev. 3.3%
- Inflation Rate MoM Est. 0.3% vs. Prev. 0.5%
- Inflation Rate YoY Est. 2.9% vs. Prev. 3%
- March 12, 9:45 a.m.: The Bank of Canada announces its interest rate decision followed by a press conference (livestream link) 45 minutes later.
- Policy Interest Rate Est. 2.75% vs. Prev. 3%
- March 12, 12:00 p.m.: Russia’s Federal State Statistics Service release February consumer price inflation data.
- Inflation Rate MoM Est. 0.8% vs. Prev. 1.2%
- Inflation Rate YoY Est. 10.1% vs. Prev. 9.9%
- March 11, 8:00 a.m.: The Brazilian Institute of Geography and Statistics (IBGE) releases January industrial production data.
- Earnings (Estimates based on FactSet data)
Token Events
- Governance votes & calls
- GMX DAO is voting on the decentralization and automation of the fee distribution process for the GMX ecosystem to ensure “real-time, trustless, and verifiable fee allocations.”
- Frax DAO is discussing upgrading the protocol by renaming FXS to FRAX, making it the gas token on Fraxtal, implementing the Frax North Star hard fork, and introducing a tail emission plan with gradually decreasing emissions and other enhancements.
- Uniswap DAO is discussing continuing treasury delegation to maintain governance stability and retain active delegates, including a renewed framework and structure expiration and allocation mechanisms.
- March 13, 10 a.m.: Mantra to host a Community Connect call with its CEO and Co-Founder to discuss various major updates.
- Unlocks
- March 12: Aptos (APT) to unlock 1.93% of circulating supply worth $63.33 million.
- March 15: Sei (SEI) to unlock 1.19% of its circulating supply worth $10.65 million.
- March 16: Arbitrum (ARB) to unlock 2.1% of its circulating supply worth $30.76 million.
- March 18: Fasttoken (FTN) to unlock 4.66% of its circulating supply worth $80 million.
- March 21: Immutable (IMX) to unlock 1.39% of circulating supply worth $12.29 million.
- Token Listings
- March 11: Bybit to delist Bancor (BNT), Paxos Gold (PAXG), and Threshold.
- March 11: Cookie DAO (COOKIE) to be listed on Coinbase.
- March 11: PancakeSwap is retiring its crypto options product.
- March 11: Mystery (MERY) was listed on the Crypto.com app.
- March 31: Binance to delist USDT, FDUSD, TUSD, USDP, DAI, AEUR, UST, USTC, and PAXG.
Conferences
Token Talk
By Shaurya Malwa
- Grok Coin, a token inspired by, but not officially affiliated with, xAI’s Grok AI, was launched on Base using trading mechanisms from Bankr and Clanker.
- The token’s AI-controlled wallet reportedly amassed over $200K in fees in the hours after going live.
- It was further amplified by the official Base account on X, which posted, “icymi, @grok launched a token on Base,” and framing it as a futuristic step where “AI is owning wallets, making markets, and generating revenue.” This gave the impression of an endorsement from Base’s leadership.
- The post prompted Base developers like Kawz, the founder of Time.fun, to express frustration over the lack of recognition for their own projects.
- Calling the GrokCoin post unfair and selective, Kawz noted they’d spent months building an app on Base without a single tweet from @base.
Derivatives Positioning
- ETH CME futures basis has dropped to an annualized 5%, the lowest since July.
- BTC’s basis has stabilized between 5% and 10% in a positive sign for the market.
- BTC options show a similar expectation pattern to gold, while ETH and other cryptocurrencies are similar to the expectation patterns of equities investors, data tracked by BloFin Academy show.
- BTC and ETH risk reversals show bias for protective puts out to the May end expiry.
- The $100K strike call is now the most popular BTC option on Deribit, as opposed to the $120K call a few weeks ago.
Market Movements:
- BTC is up 2.87% from 4 p.m. ET Monday at $81,425.03 (24hrs: -0.93%)
- ETH is up 2.84% at $1,917.00 (24hrs: -8.65%)
- CoinDesk 20 is up 3.05% at 2,531.70 (24hrs: -3.66%)
- Ether CESR Composite Staking Rate is up 10 bps at 3.11%
- BTC funding rate is at 0.0001% (0.1% annualized) on Binance
- DXY is down 0.38% at 103.44
- Gold is up 0.66% at $2,911.70/oz
- Silver is up 1.12% at $32.49/oz
- Nikkei 225 closed -0.64% at 36,793.11
- Hang Seng closed unchanged at 23,782.14
- FTSE is down 0.25% at 8,578.37
- Euro Stoxx 50 is up 0.48% at 5,413.02
- DJIA closed on Monday -2.08% at 41,911.71
- S&P 500 closed -2.7% at 5,614.56
- Nasdaq closed -4% at 17,468.32
- S&P/TSX Composite Index closed -1.53% at 24,380.71
- S&P 40 Latin America closed -2.73% at 2,297.38
- U.S. 10-year Treasury rate is down 4 bps at 4.21%
- E-mini S&P 500 futures are down 0.28% at 5636.50
- E-mini Nasdaq-100 futures are down 0.41% at 19533.25
- E-mini Dow Jones Industrial Average Index futures are down 0.21% at 42,036.00
Bitcoin Stats:
- BTC Dominance: 61.95 (-0.24%)
- Ethereum to bitcoin ratio: 0.02354 (-0.80%)
- Hashrate (seven-day moving average): 814 EH/s
- Hashprice (spot): $45.2
- Total Fees: 5.3 BTC / $429,994
- CME Futures Open Interest: 141,395 BTC
- BTC priced in gold: 28.2 oz
- BTC vs gold market cap: 8.01%
Technical Analysis
- Bitcoin’s RSI has carved out a higher low, hinting at a bullish divergence, or positive shift in momentum.
- Traders who rely on charts may feel tempted to try out longs as prices are close to the key support of the March 2024 high of $73,757, offering an attractive risk-reward.
- That, in turn, might see the recovery gather pace.
Crypto Equities
- Strategy (MSTR): closed on Monday at $239.27 (-16.68%), up 4.57% at $250.20 in pre-market
- Coinbase Global (COIN): closed at $179.23 (-17.58%), up 4.09% at $186.55
- Galaxy Digital Holdings (GLXY): closed at C$17.46 (-7.32%)
- MARA Holdings (MARA): closed at $13.41 (-16.29%), up 1.34% at $13.59
- Riot Platforms (RIOT): closed at $7.56 (-9.68%), up 2.51% at $7.75
- Core Scientific (CORZ): closed at $8.01 (+2.96%), up 3.62% at $8.30
- CleanSpark (CLSK): closed at $7.98 (-9.63%), up 1.5% at $8.10
- CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $14.48 (-11.27%), up 3.04% at $14.92
- Semler Scientific (SMLR): closed at $32.74 (-11.97%), unchanged in pre-market
- Exodus Movement (EXOD): closed at $24.60 (-16.33%), down 5.65% at $23.21
ETF Flows
Spot BTC ETFs:
- Daily net flow: -$278.4 million
- Cumulative net flows: $35.93 billion
- Total BTC holdings ~ 1,122 million.
Spot ETH ETFs
- Daily net flow: -$34 million
- Cumulative net flows: $2.69 billion
- Total ETH holdings ~ 3.579 million.
Source: Farside Investors
Overnight Flows
Chart of the Day
- The chart shows the spread between yields on the 10-year U.S. and Japanese government bonds.
- The gap has narrowed sharply, diving below a five-year-long uptrend line.
- The narrowing of the yield spread favors strength in the yen, seen as an anti-risk, haven currency.
While You Were Sleeping
- Global Markets Steady After Slowdown Fears Hit Wall Street (Financial Times): Stocks steadied globally as investors reassessed recession concerns following sharp Wall Street losses, while European defense and infrastructure shares continued to gain on expectations of increased government spending.
- Bitcoin and Nasdaq Could Stabilize as Bull Positioning in Yen Appears Stretched (CoinDesk): Overstretched bullish bets on the yen could trigger a reversal, offering relief to risk assets, though the currency’s broader uptrend remains supported by a narrowing U.S.-Japan bond yield gap.
- Latest Draft of U.S. Stablecoin Bill Aims to Split Power Between State and Federal Authorities (CoinDesk): States can oversee stablecoin issuers with a market cap under $10 billion, while larger issuers may remain under state supervision if they meet certain criteria.
- Dormant Ether Whale Moves $13M in ETH to Kraken (CoinDesk): A wallet that has held ether since the cryptocurrency’s inception moved 7,000 ETH to Kraken after five months of inactivity as the price hit its lowest level since October 2023.
- Citi Downgrades U.S. Stocks, Raises China as America First Fades (Bloomberg): Citigroup downgraded U.S. equities to neutral, citing expectations for “more negative US data prints,” while upgrading China to overweight due to attractive valuations and government support for the tech sector.
- Ukraine Hits Moscow With Largest Drone Attack Hours Before Talks (The Wall Street Journal): Ahead of a high-level U.S.-Ukraine meeting in Saudi Arabia, Kyiv carried out its largest drone strike on the Russian capital, escalating tensions as discussions on potential peace efforts loom.
