Traders have pushed back their bets on when the Federal Reserve will start cutting interest rates from May to June.
Written by: 1912212.eth, Foresight News
On March 9, around 4 PM, Bitcoin turned downward again, dropping from a low of $86,000 to $80,000. Ethereum also fell from around $2,200 to below $2,000, while SOL dropped from $140 to $124. The altcoin market was significantly affected by the overall market decline. According to contract data from Coinglass, the total liquidations across the network reached $614 million in the past 24 hours, with long positions accounting for $537 million.
Since March of this year, the market's fear index has repeatedly fallen below 20, which is quite rare. Even in mid-2024, such panic sentiment has not been observed. With the market continuously declining, is the bull market really over?
Bitcoin Spot ETF Sees Large Net Outflows for 5 Consecutive Days
The data for Bitcoin spot ETFs is not optimistic. There have been multiple large net outflows since February, with significant outflows occurring for five consecutive days since early March.
Among these, on March 4, there was a net outflow of $143.43 million, on March 6, a net outflow of $134.26 million, and on March 7, there was even a rare net outflow exceeding $400 million. The continuous large net outflows have a clear negative impact on Bitcoin's price, leading to a persistent decline as buying pressure weakens.
In terms of Ethereum spot ETF data, there have also been three consecutive days of net outflows. From February 20 to March 7, only March 4 saw a small net inflow of $14.58 million.
Market Bets on Federal Reserve Delaying Interest Rate Cuts from May to June
The timing and extent of interest rate cuts are of great concern to cryptocurrency market traders. The increase in U.S. jobs in February was slightly below expectations, and policy uncertainty is testing the resilience of the labor market. The U.S. added 151,000 non-farm jobs in February, compared to an estimate of 160,000. Average hourly wages rose by 0.3% month-on-month and 4.1% year-on-year. The unemployment rate rose to 4.1%. However, amidst chaotic trade policies and significant cuts in federal government spending that could disrupt economic growth this year, the previously strong labor market is showing signs of cracks. Following the report, short-term interest rate futures traders pushed back their bets on when the Federal Reserve will start cutting rates from May to June, but still believe there will be a total of three rate cuts in 2025.
A highly influential Federal Reserve official, Governor Waller, stated that he would not support a rate cut in March but believes there could be two or even three cuts this year. Waller expressed at the Wall Street Journal's CFO Network Summit that he wants to see more data on economic conditions before implementing further rate cuts, especially considering the backdrop of changes in trade policy under the Trump administration.
After a cumulative rate cut of 1 percentage point in the last few months of 2024, the Federal Reserve remained steady at its January meeting. The market generally expects the Fed to maintain a wait-and-see stance at the upcoming FOMC meeting on March 18-19. Several Federal Reserve officials have indicated that they want to see more progress on cooling inflation before considering another rate cut.
Government's Reserve Turns Out to Be a False Hope, White House Summit Lacks Substance
On March 7, Trump signed a highly publicized executive order officially announcing the establishment of a "Strategic Bitcoin Reserve" in the U.S. This move fulfills part of his campaign promises aimed at incorporating Bitcoin into the national financial strategy. However, a subsequent statement from David Sacks, the White House's head of AI and crypto affairs, sparked intense reactions from the market and public: "The government will not purchase any additional assets for this altcoin digital asset inventory, except for Bitcoin obtained through criminal or civil asset forfeiture procedures."
The market's initial expectation of government accumulation turned into a false hope, leading to a continuous market decline. However, the market quickly shifted its expectations to the White House crypto summit.
The participants in the summit were all influential figures in the crypto industry, including VC partners, well-known project leaders, and exchange founders. The attendees took turns speaking, but most comments were about the series of developments in the crypto space since Trump's administration and praise for Trump himself.
The only noteworthy point was Trump's statement that he expects the House and Senate to pass stablecoin legislation before the "August recess."
The grand spectacle turned out to be a disappointment, shifting market sentiment to pessimism, with BTC dropping from $90,000 at the start of the summit on March 8.
Future Market Trends
Currently, opinions on future market trends are divided. Trader Eugene Ng Ah Sio stated in a TG group that he is not in a hurry to trade at the current price levels. Eugene reiterated that, as mentioned before, the $75,000 level is the only price point he is currently interested in.
WhaleWire founder Jacob King posted that the Bitcoin bear market has arrived. The failure of the Bitcoin strategic reserve clearly indicates that there was never an intention to purchase any other assets besides confiscated Bitcoin. Meanwhile, the narrative of institutional demand has collapsed, evidenced by record outflows from ETFs. All narratives have been shattered—every single one. Bitcoin extremists have attracted new retail funds into the bubble by creating illusions, but they have run out of tricks. Bitcoin is heading into a multi-year bear market, dropping to levels once thought impossible. If you have already invested, I strongly recommend selling all your assets now; you can buy back after a drop of over 85% if you wish.
Jeff Park, head of investment strategy at Bitwise, stated that at this stage, he believes we will first move lower before breaking new highs. I always hope I am wrong, but that is the loneliness and unpaid nature of Alpha trading, which is why you pay attention to me.
Mike Novogratz, founder of Galaxy, tweeted that BTC needs to reclaim $91,000 to attract momentum buying. Until then, it will remain in the $75K-$90K range on the charts. The rest of the crypto market needs retail investors to come in. But what I know is that every time you think they have disappeared, they come back. For the market to reverse, we need to see that. ETH should hold above $2K, and it must hold above $2K. In the medium to long term, this remains very bullish. However, in the short term, there are many counteracting forces at play.
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