Matrixport Market Observation: BTC is more closely tied to macro data, Trump's tariff policy severely impacts the market

In the past week, the prices of crypto assets have been significantly influenced by information. On February 28, BTC hit a low of $78,258, and market sentiment fell into extreme fear. With the Trump administration proposing to "include five tokens in the new strategic reserve," the price of BTC quickly rebounded, breaking through long-term resistance levels, reaching a high of $95,000, and temporarily stabilizing around the resistance level of $92,000 to $93,000.

Following this, Trump's tariff policy was announced on March 3, Eastern Time, leading to a decline in the prices of crypto assets, with BTC leading the way in a rollercoaster market. Currently, the price of BTC fluctuates around $83,000, with a maximum price fluctuation of over 10% within 24 hours. ETH experienced a maximum price fluctuation of over 15% within 24 hours, hitting a low of $2,002 (the above data is from Binance spot, real-time data as of March 4, 16:00).

Although the current market narrative is relatively favorable for crypto assets, macro data and market sentiment significantly impact the price trends of crypto assets. In the current climate of evident risk aversion, investors are advised to closely monitor fundamental information such as U.S. Treasury bonds and wait for macro signals.

Market Analysis

Trump's team manipulates the crypto market, leading to extreme volatility

On March 2, Trump posted on social media that the U.S. would create a cryptocurrency strategic reserve, which would include BTC, ETH, XRP, SOL, and ADA. The news caused a sharp rebound in the cryptocurrency market, with ADA surging over 60%. Although BTC's market dominance has declined, its increase still exceeded 10%.

Since Trump's election and successful inauguration, the crypto market has been an important bargaining chip for him. Based on past events, Trump's team has become increasingly adept at influencing the crypto market through information, whether in terms of timing or technical control. The upcoming first cryptocurrency summit at the White House on March 7 is also highly anticipated. How will Trump maneuver to "ensure that the U.S. becomes the world capital of cryptocurrency"?

February saw record net outflows from BTC ETFs, with poor market performance expected in March

Recently, BTC ETFs have seen net outflows for eight consecutive days, with approximately $2.4 billion net outflow from the market in the past week. Coinglass data shows that February was the month with the most severe outflows in BTC ETF history. The market's risk aversion is evident, and with arbitrage funds exiting, the performance of BTC ETFs in March may not be optimistic. Data shows that on the 3rd, the total net outflow from BTC spot ETFs was $74.19 million.

The ETH market is also under significant pressure. In February, the ETH lending market experienced the most severe liquidation event in 12 months, with nearly $500 million in collateral liquidated, mostly occurring on Aave and Compound platforms. The surge in liquidations coincided with the overall market decline, leading to a substantial decrease in the total market capitalization of cryptocurrencies and triggering a large number of forced liquidations. This was the second-highest monthly liquidation amount in DeFi history, second only to the liquidation amount during the market crash in May 2021.

U.S. crypto regulation welcomes spring, with many institutions recently settling with the SEC

The SEC recently withdrew investigations into companies such as Robinhood, Gemini, UniSwap Labs, MetaMask, and OpenSea, and reached settlements with Coinbase and Kraken. Compared to the Biden administration, there has been a significant shift in the SEC's approach to cryptocurrency regulation.

The SEC announced on Monday that the cryptocurrency working group will hold its first roundtable meeting on March 21 at its headquarters in Washington, D.C. The theme will be "How we got here and how we move forward—defining the status of securities." This will be part of a series of meetings titled "Spring Sprint Towards Clarity in Cryptocurrency."

Macro & Data Sharing

Trump's tariff policy finalized, causing a major shock to U.S. stocks

On March 3, President Trump announced that reciprocal tariffs would begin on April 2, and the 25% tariff policy on goods from Mexico and Canada would take effect on March 4. Trump stated that there was no room for consensus on tariffs with Mexico and Canada. Additionally, Trump mentioned that he would consider reaching a free trade agreement with Argentina.

Under the heavy pressure of Trump's tariff policy, the three major U.S. stock indices fell sharply at the close, with the S&P 500 index recording its largest decline of the year, and the Nasdaq erasing gains since last year's election. Market panic increased significantly, with technology and chip stocks under pressure; Nvidia plummeted nearly 9%, Broadcom fell over 6%, and Amazon dropped over 3%. "Safe-haven asset" gold rose back above $2,900. The market is closely watching the European Central Bank meeting and the non-farm payroll report.

U.S. economic growth shows signs of weakness, and the market urgently needs solutions

Consumer credit and housing market data continue to decline sharply, with new home sales hitting a historic low, and new housing starts also beginning to fall after the post-pandemic boom, intensifying market fears of weak economic growth.

Currently, most U.S. economic surprise indices have turned negative. This is influenced by weak exports (falling from -$29 billion to -$250 billion) and consumer spending (falling from +2.2% to +1.3%). The Atlanta Fed's GDP growth forecast for the first quarter saw a record drop last week, revised down from +2.2% to -1.3%.

Bond market performance varies, with Japanese bonds hitting new highs

On March 4, Jinshi data showed that the yield on Japan's 30-year government bonds rose to 2.37%, the highest level since October 2008. Bloomberg data indicated that the yield on dollar-denominated bonds in the past week has significantly decreased.

Disclaimer: The above content does not constitute investment advice, sales offers, or purchase offers to residents of the Hong Kong Special Administrative Region, the United States, Singapore, or other countries or regions where such offers or invitations may be prohibited by law. Trading in digital assets may carry significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided herein.