Last week, the cryptocurrency market cap experienced a decline of 3.7%, moving from a market capitalization of $1.109 trillion to $1.068 trillion. The pullback was seen across sectors with BTC, ETH, and US indices like Nasdaq and S&P 500, all ending the week at lower levels. Macroeconomic uncertainty is constantly increasing, with global conflicts being on the rise. Apart from fundamental turmoil, many geopolitical issues are stopping the markets from showing a sustainable positive movement. The slight switch in the commentary to higher interest rate hikes in coming data prints has also made the environment very hawkish. With the next CPI and PPI data set to release in the latter half of the month, the markets can be expected to continue the sideways or consolidation movement for the time being.
Ethereum Price Analysis:
The Sepolia testnet upgrade for the Ethereum blockchain was successful in simulating the March mainnet Shanghai hard fork.The “Shapella” upgrade, which combines the names of the upcoming “Shanghai” and “Capella” hard forks, was successfully added to the testnet on February 28. The upgrade will be made available on the Ethereum Goerli testnet as the final step before the Shanghai fork goes live on the main network. This is expected to commence in March.
The Ethereum token price bounced off the immediate support level at $1560, which shows that the bulls are fighting hard to defend this level.
The ETH/USD pair is still in a range, and it will lean towards the bulls if they push the price above $1,700 and close above it. The pair will then try to break through the resistance level of $1,766 and start moving toward the psychological level of $2,000. But the bearish case can’t be ignored right now. If the price turns down again from around $1,672 resistance, it will show that bears aren’t ready to give up. That may make it more likely that the price will drop below $1,560. The price of the pair could then fall to $1,462 and then to $1,354.
Fundamental Updates
On February 24th, the release of the core Personal Consumption Expenditures (PCE) index had a significant impact on the markets, causing widespread caution and a dip in market activity. The YoY basis data recorded a figure of 4.7, which exceeded the expected 4.3 mark and even surpassed the previous figure of 4.6. This data holds great significance for the Federal Reserve as it influences decisions on future interest rate hikes and other economic factors.The release of this data, combined with other macroeconomic factors, has contributed to an increased probability of higher interest rate hikes compared to previous estimates. The probability of a 50 basis point rate hike is steadily rising, although at a moderate pace.
The US ISM non-manufacturing PMI print will be the main topic of discussion this week. Expectations for US manufacturing and US services have recently diverged as a result of the US’s fragmented post-Covid recovery. The most recent US ISM non-manufacturing print revealed an unexpected reading higher than 55 for January, which was significantly higher than the previous reading, which was sub-50. The print from Friday is a leading indicator, so traders will be paying close attention to it. Stocks will likely be under pressure if it once again exceeds the high expectations of 56, with the price components higher and New Orders 58.2 or better. However, that bias has existed for the entire month of February. The best chance would result from a significant data error. Anything below 52.4 and a decline in the employment component below 50, along with a rise in prices, would be considered risk-positive.
Bitcoin returns were -3.62% for this week. The Alpha Blue Chip Focused Strategy returns were 2.15% during the same period (23 FEB – 02 MAR). The Top Cap Digital Assets Strategy and Arbitrage Opportunities and Balanced Strategy returns were 0.79% and 0.52%, respectively.
