Matrixport Market Observation: Cryptocurrency Market Adjustment, Policy and Capital Outflow Affect Price Trends

Last week, the crypto assets were significantly influenced by concerns over a U.S. economic recession. On March 5, the BTC price slightly corrected, peaking at $92,810.64, with a maximum daily increase of 3.81%. After March 6, affected by the first White House crypto summit and the Federal Reserve's interest rate policy, market sentiment turned extremely fearful, and investors showed clear short-term risk-averse behavior. Consequently, the BTC price fell, hitting a low of $77,459.91 on March 10, with a maximum weekly decline of 16.53%.

Due to the outflow of $719 million from BTC spot ETFs last week, the BTC price candlestick showed a long bearish line, indicating heavy market selling pressure. Currently, the BTC price has recovered to around $80,000, forming short-term signs of a bottom near the low of $76,606, but it remains in a downward trend without clear reversal signals. ETH showed an overall downward trend last week, with the price stabilizing around $1,800, experiencing a maximum weekly decline of 21.97% (data from Binance spot, real-time data as of March 11, 14:30).

Due to Trump's remarks in a news interview on the 9th, stating that the economy is in a "transition period," concerns among investors about the potential economic slowdown caused by his policies intensified, leading to declines in the three major U.S. stock indices. As of the close on March 10, the S&P 500 index fell more than 2%, marking the largest single-day drop since 2022, the Nasdaq index dropped over 4% at midday, and the Dow Jones index briefly fell by 1,100 points, with the so-called "fear index" VIX surging nearly 20%.

Market Analysis

Crypto market under pressure, capital outflows and macro policies affecting price trends

As of March 10, the crypto market has retraced most of the gains made after Trump announced the U.S. crypto strategy reserve, with the total market capitalization dropping 14.7% over seven days to $2.7 trillion. The market trend is influenced by multiple factors, including Trump's remarks on trade tariffs, budget cuts, and other policies, which have drawn investor attention to the potential short-term economic impacts. According to a CoinShares report, digital asset investment products experienced capital outflows for four consecutive weeks, totaling $4.75 billion, with BTC seeing an outflow of $756 million last week, causing total assets under management (AUM) to drop to $142 billion, the lowest level since November 2024.

Under the dual impact of capital outflows and macro policies, market sentiment has turned cautious, with the Crypto Fear & Greed index dropping to 10. As a result, BTC experienced a maximum weekly decline of 16.53%, ETH fell below $2,000, and SOL dropped 7.2%. The liquidation scale in the derivatives market expanded, with CoinShares data on March 10 showing a total liquidation of $650 million within 24 hours, of which long positions accounted for $596 million.

Trump's remarks exacerbate market worries, stock and crypto markets both decline

As of the close on March 10, the U.S. stock market saw significant declines, with the S&P 500 index dropping 2.7%, the Nasdaq index falling 4%, and the Dow Jones index initially closing down 2%. Tech stocks such as Tesla, Apple, and Nvidia faced heavy losses, with Tesla down 15.4%, and Apple and Nvidia nearly 5%, reflecting rising investor concerns about a recession. The crypto market was also dragged down, with BTC falling below $80,000 and ETH retreating to $1,800, leading to an overall market capitalization decline of nearly 4%.

This downward trend primarily stems from remarks made by Trump and U.S. Treasury Secretary Yellen. Last week, both Yellen and Trump stated that the U.S. economy is in a "transition period," and the possibility of a short-term recession cannot be ruled out.

As risk-averse sentiment rises, U.S. economic data and policy direction in the coming months will become key factors determining market trends.

Signs of economic slowdown may prompt the Fed to shift to a dovish stance, boosting BTC and risk assets

The non-farm payroll data released on March 7 showed that the U.S. added only 151,000 jobs, below the expected 170,000, raising market expectations for a Fed rate cut. Nexo analysts believe that a rate cut could boost global stock markets and the cryptocurrency market. However, inflation risks from tariffs and supply chain issues may still keep the Fed cautious.

The derivatives market is showing increasingly bearish sentiment, especially with the growing correlation between U.S. stocks and BTC. QCP Capital pointed out that the key short-term support level for BTC is $80,000, and the market remains affected by uncertainty. The Fed is expected to make a rate cut decision at the June meeting.

The upcoming Consumer Price Index (CPI) and Producer Price Index (PPI) will further influence market direction.

ETH price breaks key support line, market sentiment weakens

As of March 10, the ETH price has dropped nearly 21% over the past week, marking the largest weekly decline since November 2022.

According to TradingView data, the price has fallen below the previously supportive $2,100 range and breached a key upward trend line, indicating weakened buying momentum and stronger selling pressure. The next support level for ETH may be near the lows from September to October 2023, around $1,500.

Market Highlights

Trump hosts cryptocurrency industry summit, no substantial policy documents released

On March 7, U.S. President Trump hosted the first cryptocurrency industry summit at the White House, gathering representatives from regulatory agencies such as the Treasury Department and leaders from the crypto industry for closed-door discussions. Although the meeting claimed to "define the regulatory direction for crypto over the next four years," no substantial policy documents were released.

During the summit, Trump announced a delay in stablecoin legislation, aiming to complete it before Congress recesses in August 2025, four months later than originally planned. U.S. Treasury Secretary Yellen also stated that the government would end its regulatory crackdown on digital assets and strongly promote stablecoin policies to maintain the U.S. position as a global reserve currency.

However, the summit did not address key issues such as the SEC's determination of ETH's security status, coordination mechanisms for state BTC reserve bills, and taxation of crypto miners. Trump and his team did not specify a timeline or roadmap for the legal framework of the crypto industry.

Texas establishes BTC reserve fund, becoming the first government-managed cryptocurrency fund in the U.S.

On March 9, Texas officially passed SB 21, establishing a BTC reserve fund, making it the first government-managed cryptocurrency fund in the U.S. According to the plan, the fund will hold BTC and other top cryptocurrencies with a market cap exceeding $500 billion, and will be overseen and guided by a newly established advisory committee.

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