Crypto Market Demonstrates Strength Amid Ongoing Banking Sector Challenges

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Last week, the cryptocurrency market demonstrated a notable growth of 8.31%, reaching a total value of $1.159 trillion from its previous standing of $1.07 trillion. The upward trend was evident across various indices, with BTC exhibiting particularly strong performance in terms of percentage increase. The ongoing challenges in the banking sector, coupled with structural hurdles, reinforce the argument for BTC and cryptocurrencies more than ever before. The primary focus of the week was the Federal Reserve’s anticipated interest rate hike of 25bps, which ultimately marked in as expected. However, what spooked investors was the indication of no interest rate cuts, as reflected in the Summary of Economic Projections’ dot-plot. While the projection for the terminal interest rate did not spike, no rate cuts are being projected for this year. Adding to this uncertainty was the commentary from Treasury Secretary Janet Yellen, clarifying that the support provided to banks is not unlimited or unrestricted, causing concern in markets across the board.

BTC price analysis

Bitcoin Price Analysis:

Bitcoin has been trading above the breakout level of $24,719 for the past week, which is a good sign. The next major resistance zone is between $27,812 and $31,500. If the price falls below the current level or the overhead resistance, the key level to watch is $25,500. If the price bounces off this level with strength, it indicates that bulls have turned $25,500 into support. Following that, the level will serve as a floor during future declines.


Fundamental Updates

The fed’s interest rate hike was on the expected 25 bps mark. The markets were moving to the upside steadily, but conflicting commentary from treasury secretary Janet Yellen and Fed chair Jerome Powell spooked the markets. The difference was on the front of ongoing support that the banks are receiving support under the bank term funding program. Apart from this, Jerome Powell mentioned that while rate hikes are a crucial tool, a few changes on the policy front will be essential in the near future.

Despite these concerns, the Summary of Economic Projections and dot plot indicated that the majority of Fed members still view the terminal rate as being in the 5-5.25 region, providing some relief for market participants who were anticipating a deviation in light of recent events.

rate hikes

Next week, the major highlights will be around the final numbers for GDP QoQ. The readings in the past have been slightly supportive, and if the same continues, it’ll be a good relief in the current tough macroeconomic environment.

Bitcoin returns were 12.05% for this week. The Alpha Blue Chip Focused Strategy returns were 2.81% during the same period (16 MAR – 23 MAR). The Top Cap Digital Assets Strategy and Arbitrage Opportunities and Balanced Strategy returns were 7.7% and -1.38%, respectively.

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