Matrixport Market Observation: Intensified Bull-Bear Struggle, Fed's Dovish Signals Boost Market Sentiment

BTC has risen for two consecutive weeks, with intensified long and short market battles, overall showing a trend of fluctuating upward movement. Last week, the BTC price opened at $81,133.53, climbed to $87,032.24 on the 19th, and then slightly retreated to $83,134.01 due to the impact of the Federal Reserve's interest rate decision. Starting from the 23rd, BTC rose for two consecutive days, reaching a high of $88,781.22, and is currently stabilizing around $87,000, with a maximum weekly increase of 9.42%.

ETH remains in a consolidation phase this week, overall showing an upward trend. Currently, the ETH price hovers around $2,000, with a maximum weekly increase of 12.43% (the above data is from Binance spot, real-time data as of March 25, 17:00).

The three major U.S. stock indices have stabilized. As of the close on March 24, the Nasdaq rose over 2%, the S&P 500 increased by 1.76%, and the Dow rebounded nearly 600 points, returning above 42,000 points.

Market Interpretation

S&P 500 Breaks Above 200-Day Moving Average, Positive Technical Signals Emerge

On March 24, the S&P 500 index broke above the 200-day moving average (200 DMA) for the first time since March 10, indicating that the market may be entering a new trend shift. BTC also broke its 200-day moving average, with the breakout point at $85,046, and the current price is close to $88,000, with the next target being the short-term holder realization price of $93,245. This price level is often seen as a key technical resistance level in the market.

After experiencing an adjustment of about 10%, the S&P 500 rose 1.7% on March 24, breaking above the 200-day moving average, indicating a recovery in stock market sentiment. BTC's performance corresponds with the stock market rebound, showing positive technical signals. Overall, the recovery in the stock market supports BTC, and the market exhibits certain upward potential from a technical perspective.

BTC Spot ETF Inflows Rebound, Price Bounces Back

After five consecutive weeks of decline, BTC Spot ETF saw inflows this week, indicating a rebound in market demand for BTC. Data shows that this week, BTC Spot ETF recorded a total net inflow of $1.05 billion over five trading days. This influx of funds supports the rebound in BTC prices. Meanwhile, inflows of stablecoins also reached $958 million, with total inflows amounting to $1.95 billion, indicating that despite panic in the market, funds are still flowing and providing support.

ETH Exchange Supply Drops to Ten-Year Low, Market Liquidity Tightens

On March 24, Santiment data showed that the available supply of ETH on exchanges dropped to 8.97 million, the lowest level in nearly a decade, accounting for about 7.5% of the market cap. This change indicates tight market liquidity, as DeFi and staking products attract funds, leading to a reduction in the supply of ETH in the market. Although selling pressure has eased, the tightening supply has also increased price volatility, making the market more sensitive to large transactions.

At the same time, in March, ETH ETF experienced an outflow of $401 million, accounting for 5.9% of total assets, while BTC ETF saw an outflow of $893 million, accounting for 0.9%. Year-to-date, ETH has dropped 37%, while BTC has declined 7.5%. Although there was a slight inflow into ETH ETF in early March, the overall inflows have been far below the previous two months, and there is a significant gap compared to BTC ETF. Since March, ETH prices have decreased by 8.5%, while BTC has risen by 3%. Overall, market sentiment is weak, with continued outflows of funds leading to relatively poor performance for ETH.

Market Enters Consolidation Phase, On-Chain Activity Cools Down

According to Glassnode data on March 24, BTC on-chain activity has decreased, with a reduction in transaction volume, indicating that the market has entered a consolidation phase. The "Hot Supply" metric for BTC dropped from 5.9% to 2.8%, a decline of over 50%, reflecting a decrease in active capital in the market.

Additionally, the share of BTC miners in on-chain transactions fell to 4.23%, the lowest since November 2022, indicating that miners have reduced their selling behavior, easing selling pressure. The total open interest in the futures market decreased from $57 billion to $37 billion, a drop of about 35%, showing a significant reduction in speculative activity.

These data indicate that recent market liquidity has tightened, and short-term activity has decreased, but this phase may provide a foundation for subsequent accumulation and recovery in the market.

Market Highlights

Federal Reserve's Dovish Signals Support Market Stabilization, Stocks and Bonds Rebound

At the March 19 interest rate meeting, the Federal Reserve made a decision in line with market expectations, keeping the benchmark interest rate in the range of 4.25%-4.5%. At the same time, the Federal Reserve hinted at plans to lower rates by 50 basis points in 2025 and announced adjustments to the pace of bond reduction, lowering the cap on U.S. Treasury bond reductions from $25 billion per month to $5 billion.

Federal Reserve Chairman Powell stated that economic growth expectations have been downgraded and emphasized the impact of tariff policies on inflation. Despite structural issues in the economy, the Federal Reserve's dovish stance has provided support for the market, driving the stock market's rebound. Last week, the U.S. dollar index rose by 0.25%, while the Nasdaq, S&P 500, and Dow Jones rose by 0.17%, 0.51%, and 1.2%, respectively. Meanwhile, the yields on 2-year and 10-year U.S. Treasury bonds fell by 1.59% and 1.39%, to 3.9670% and 4.2580%, respectively.

SEC Confirms PoW Mining Not Subject to Securities Law Regulation, Providing Legal Basis for PoW Token ETF Approval

On March 20, the U.S. Securities and Exchange Commission (SEC) issued a statement clarifying that cryptocurrency mining activities based on the proof-of-work (PoW) mechanism do not constitute a securities offering and do not need to be registered under the Securities Act. This statement reduces the legal uncertainty for PoW tokens (such as Litecoin) and may pave the way for future approvals of PoW cryptocurrency ETFs (such as Litecoin ETF).

Trump Promises to Make the U.S. a BTC Superpower

On March 20, U.S. President Trump stated at the Blockworks Digital Assets Summit that he plans to make the U.S. a "BTC superpower" and end the previous government's regulatory restrictions on cryptocurrencies. He called on Congress to pass legislation to establish rules for stablecoins and market structure to promote innovation and investment. At the same time, Trump mentioned initiatives such as the White House Digital Assets Summit and establishing a strategic BTC reserve to enhance the U.S.'s global leadership in the cryptocurrency space.

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