BTC Price Steadies With One Eye on Trump’s First Inflation Report

By Omkar Godbole (All times ET unless specified otherwise)

The cryptocurrency market is aiming for a rebound, with bitcoin climbing above $81,000 ahead of tomorrow’s U.S. inflation report. Overall, the recovery from the lows seen overnight is primarily driven by layer-1 and layer-2 tokens, along with a rise in gaming coins.

This uptick occurs amidst signs of “peak fear” within Wall Street, a phenomenon usually observed during market bottoms.

Notably, the gap between one- and six-month futures linked to the VIX, often referred to as Wall Street’s fear gauge, surpassed zero on Monday, marking an unusual positive signal and reflecting expectations of higher short-term volatility compared to six months ahead. Volmex’s Bitcoin volatility index exhibits a similar trend, although this inversion is more common within the crypto sphere.

“Is the worst over? It’s difficult to determine,” highlighted a senior global market strategist in communication. “However, the risk-reward scenario for entering long positions in U.S. equities appears to be improving. The VIX index has become significantly inverted, suggesting that shorter contracts are being priced higher than longer-term ones. This indicates stress in the market, but it can also point to extreme sentiment levels.”

Concurrently, excessive bullish sentiment in the yen indicates that the safe-haven currency’s rally may soon taper off, potentially aiding risk assets as a result.

According to the Truflation U.S. Inflation Index, which provides a daily and real-time measure of inflation using data from over 30 sources and 13 million price points, the rate has fallen to 1.35%, extending a decrease from February’s peak of over 2%. This trend signals the progress on inflation that the Federal Reserve seeks before contemplating rate cuts.

On Wednesday, the Bureau of Labor Statistics is anticipated to report a month-over-month increase of 0.3% for February, a marked decline from January’s worrying 0.5%. A weaker reading could affirm traders’ hopes for accelerated rate cuts starting in June, potentially sparking a renewed appetite for risk. However, it’s crucial to understand that the Fed’s Chair has indicated that clarity regarding new policies from the administration is necessary before any decisive move, suggesting that CPI data alone may not suffice.

Conversely, a CPI report that exceeds expectations could undermine recovery prospects, setting the stage for a potential deeper drop in bitcoin and the overall crypto sector. Some analysts even foresee bitcoin tumbling to around $74,000.

“A bearish pattern remains on daily timeframes, indicating a growing sell-off after failing to stay above the 200-day moving average. The likelihood of a pullback to the $70,000 to $74,000 band still appears to be the most plausible scenario,” stated a senior market analyst via email. Remain vigilant!

What to Watch

• Crypto:
• Macro
  • March 11, 8:00 a.m.: The Brazilian Institute of Geography and Statistics (IBGE) will disclose January’s 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 is set to release 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.: The President of the European Central Bank will deliver 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) will publish February’s 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) is set to report February’s 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 will announce its interest rate decision followed by a press briefing 45 minutes later.
    • Policy Interest Rate Est. 2.75% vs. Prev. 3%
  • March 12, 12:00 p.m.: Russia’s Federal State Statistics Service will release the February consumer price inflation figures.
    • Inflation Rate MoM Est. 0.8% vs. Prev. 1.2%
    • Inflation Rate YoY Est. 10.1% vs. Prev. 9.9%
• Earnings (Estimates based on FactSet data)
  • March 17 (TBC): Bit Digital (BTBT), $-0.05
  • March 18 (TBC): TeraWulf (WULF), $-0.04
  • March 24 (TBC): Galaxy Digital Holdings (TSE: GLXY), C$0.39

Token Events

• Governance votes & calls
  • GMX DAO is conducting a vote on the decentralization and automation of the fee distribution process within the GMX ecosystem to ensure “real-time, trustless, and verifiable fee allocations.”
  • Frax DAO is reviewing a proposal for upgrading the protocol, which includes renaming FXS to FRAX, positioning it as the gas token on Fraxtal, implementing the Frax North Star hard fork, and introducing a tail emission plan with reducing emissions over time alongside other enhancements.
  • Uniswap DAO is discussing the continuity of treasury delegation to maintain governance stability and ensure active delegates, featuring a revamped framework and structures for expiration and allocation mechanisms.
  • March 13, 10 a.m.: Mantra is set to host a Community Connect call with its CEO and Co-Founder to go over various significant updates.
• Unlocks
  • March 12: Aptos (APT) will unlock 1.93% of its circulating supply, valued at $63.33 million.
  • March 15: Sei (SEI) will unlock 1.19% of its circulating supply, valued at $10.65 million.
  • March 16: Arbitrum (ARB) will unlock 2.1% of its circulating supply, valued at $30.76 million.
  • March 18: Fasttoken (FTN) will unlock 4.66% of its circulating supply, valued at $80 million.
  • March 21: Immutable (IMX) will unlock 1.39% of its circulating supply, valued at $12.29 million.
• Token Listings
  • March 11: Bybit will delist Bancor (BNT), Paxos Gold (PAXG), and Threshold.
  • March 11: Cookie DAO (COOKIE) will be listed on Coinbase.
  • March 11: PancakeSwap will discontinue its crypto options product.
  • March 11: Mystery (MERY) has been listed on the Crypto.com app.
  • March 31: Binance will 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 linked to xAI’s Grok AI, was launched on Base utilizing trading mechanisms from Bankr and Clanker.
• The token’s AI-controlled wallet reportedly generated over $200K in fees shortly after its launch.
• This was further highlighted by an official post from Base’s account on social media, which stated, “In case you missed it, @grok launched a token on Base,” positioning it as an innovative move where “AI is managing wallets, shaping markets, and generating income.” This created an impression of endorsement from Base’s leadership.
• The announcement led to frustration among Base developers like Kawz, the founder of Time.fun, who expressed disappointment over the lack of recognition for their own projects, remarking that their efforts over months on app development had not received a single mention from @base.

Derivatives Positioning

• The ETH CME futures basis has decreased to a 5% annualized rate, its lowest since July.
• BTC’s basis has stabilized between 5% and 10%, indicating a positive trend for the market.
• BTC options display a similar expectation pattern to that of gold, while ETH and other cryptocurrencies resemble the expectation patterns of equity investors, as per data from BloFin Academy.
• BTC and ETH risk reversals show a preference for protective puts with expirations extending to the end of May.
• The $100K strike call has become the most sought-after BTC option on Deribit, shifting from the $120K call that was popular just weeks ago.

Market Movements:

• BTC is currently up 2.87% from 4 p.m. ET on Monday at $81,425.03 (24hrs: -0.93%)
• ETH has risen 2.84% to $1,917.00 (24hrs: -8.65%)
• The CoinDesk 20 index is up 3.05% at 2,531.70 (24hrs: -3.66%)
• Ether CESR Composite Staking Rate is up 10 basis points at 3.11%
• The 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 has risen 1.12% to $32.49/oz
• Nikkei 225 closed down 0.64% at 36,793.11
• Hang Seng ended flat at 23,782.14
• FTSE dipped 0.25% at 8,578.37
• Euro Stoxx 50 rose 0.48% to 5,413.02
• DJIA closed down 2.08% at 41,911.71
• S&P 500 closed down 2.7% at 5,614.56
• Nasdaq fell 4% to 17,468.32
• S&P/TSX Composite Index closed down 1.53% at 24,380.71
• S&P 40 Latin America fell 2.73% to 2,297.38
• The U.S. 10-year Treasury rate decreased by 4 bps to 4.21%
• E-mini S&P 500 futures fell 0.28% to 5636.50
• E-mini Nasdaq-100 futures declined 0.41% to 19533.25
• E-mini Dow Jones Industrial Average futures decreased by 0.21% to 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 formed a higher low, indicating a potential bullish divergence or a positive shift in momentum.
• Traders focusing on charts may feel encouraged to explore long positions as prices approach the critical support level of the March 2024 high of $73,757, providing an appealing risk-reward ratio.
• This may, in turn, accelerate the recovery.

Crypto Equities

• Strategy (MSTR): closed on Monday at $239.27 (-16.68%), currently up 4.57% to $250.20 in pre-market
• Coinbase Global (COIN): closed at $179.23 (-17.58%), currently at $186.55, up 4.09%
• Galaxy Digital Holdings (GLXY): closed at C$17.46 (-7.32%)
• MARA Holdings (MARA): closed at $13.41 (-16.29%), currently at $13.59, a rise of 1.34%
• Riot Platforms (RIOT): closed at $7.56 (-9.68%), currently increases to $7.75, up 2.51%
• Core Scientific (CORZ): closed at $8.01 (+2.96%), currently at $8.30, up 3.62%
• CleanSpark (CLSK): closed at $7.98 (-9.63%), currently back at $8.10, up 1.5%
• CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $14.48 (-11.27%), currently at $14.92, up 3.04%
• Semler Scientific (SMLR): closed at $32.74 (-11.97%), currently unchanged in pre-market
• Exodus Movement (EXOD): closed at $24.60 (-16.33%), currently down 5.65% to $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 illustrates the difference in yields between the 10-year U.S. and Japanese government bonds.
• The gap has sharply decreased, dropping below a five-year-long upward trend line.
• This contraction in the yield spread is expected to strengthen the yen, recognized as a safe-haven currency.

While You Were Sleeping

• Global Markets Steady After Slowdown Fears Hit Wall Street (Financial Times): Global stock markets steadied as investors reassessed their concerns over a potential recession in light of significant losses on Wall Street. Meanwhile, shares in European defense and infrastructure sectors continued to rise amid expectations of increased government spending.
• Bitcoin and Nasdaq Could Stabilize as Bull Positioning in Yen Appears Stretched: Excessive bullish positioning on the yen may trigger a reversal, which would provide relief to risk assets, although the yen’s broader uptrend still appears 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: States may have the option to oversee stablecoin issuers with a market cap under $10 billion, while larger entities could remain under state supervision contingent on meeting specific criteria.
• Dormant Ether Whale Moves $13M in ETH to Kraken: A wallet that has held ether since the cryptocurrency’s inception transferred 7,000 ETH to Kraken after being inactive for five months, coinciding with the price hitting its lowest level since October 2023.
• Citi Downgrades U.S. Stocks, Raises China as America First Fades: Citigroup has downgraded its rating on U.S. equities to neutral, expecting “more negative data” from the U.S., while upgrading China to an overweight position owing to appealing valuations and governmental support for the tech sector.
• Ukraine Hits Russia with Major Drone Attack Hours Before Talks: In a significant escalation, Kyiv launched its largest drone strike on Moscow just hours before a high-level U.S.-Ukraine meeting in Saudi Arabia, amid ongoing discussions on possible peace efforts.

In the Ether