Markets enter the new week caught between short-term relief and longer-term macro pressure. Bitcoin has reclaimed the $72,000 level but continues to trade within a broader range, while equities remain under strain from persistent inflation driven by energy markets.

This report breaks down the key dynamics shaping markets this week: an energy-driven macro regime, fragile but improving sentiment, and Bitcoin consolidating at critical levels with clear directional triggers for the next major move.

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March told a simple story: energy won, everything else lost. The S&P 500 fell 5.09% while the energy sector surged 10.31%, making it the only sector in positive territory. The driver is no mystery, escalating conflict in the Middle East has constrained the Strait of Hormuz and disrupted energy infrastructure. In an inflationary, supply-shocked world, commodity producers are a natural hedge, and March proved it.

That oil-driven inflation spike has had an immediate knock-on effect: the Fed is now frozen. Futures markets, which began the year pricing in two to three rate cuts, have almost completely reversed. The probability of the Fed holding rates steady at its April meeting now stands near 95%, with traders pricing out virtually every cut expected for 2026. A central bank that markets counted on as a tailwind has become a bystander, and that changes the math for almost every other asset class.

Nowhere is that felt more sharply than in tech. With borrowing costs staying high and no rate relief in sight, the S&P 500 Information Technology sector's forward price-to-earnings ratio has dropped to its lowest level since 2022. As the discount rate used to value future earnings rises with Treasury yields, high-growth tech valuations are compressed accordingly. 

The glue holding this all together is the 10-year Treasury yield, which has gravitated around 4.25% since mid-2023 and continues to act as the market's center of gravity. Yields spiked sharply on energy and inflation fears, then pulled back on ceasefire hopes, before settling once again near the 4.3% range. That anchor level matters: as long as the 10-year stays here, the cost of capital remains elevated, valuations stay compressed, and the Fed's hands remain tied.

The throughline is clear. Energy geopolitics are driving inflation, inflation is keeping the Fed on hold, and a frozen Fed is weighing on growth assets, particularly tech. Until the Middle East situation meaningfully de-escalates or inflation cools, this regime is unlikely to shift. Earnings season, now beginning, is the next major test of whether corporate fundamentals can hold up against the pressure.

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Sentiment has shown a slight improvement but remains firmly suppressed. The Fear & Greed Index currently sits at 17, still deep within extreme fear territory. While this marks a modest uptick from last week’s lows, it does little to change the broader picture. Since the start of the year, sentiment has consistently failed to sustain any meaningful recovery, and the current reading continues to reflect a market where confidence remains fragile and participants cautious.

The ETF flow data, however, presents a more constructive shift. After a mixed start to the week, flows turned notably positive into the back end, with Thursday and Friday recording inflows of $343M and $240M respectively. This late-week strength pushed total assets under management back up to approximately $94B. While this does not yet signal a full trend reversal, it suggests that institutional demand is beginning to stabilize after a period of sustained outflows.

Taken together, these data points reflect a market in transition. Sentiment remains deeply negative and has yet to show a convincing recovery, but institutional flows are no longer uniformly weak and are starting to show early signs of improvement. Whether this develops into sustained demand or proves to be a temporary shift will be critical in shaping the near-term outlook.

A macro-focused week ahead, with markets looking for confirmation that the recent relief rally can sustain. With sentiment still weak, incoming data will be key in shaping expectations around growth and rates.

Monday brings March Existing Home Sales, offering a read on housing market conditions under elevated rates. Tuesday’s PPI inflation data is the key release. With rate cut expectations rising, a softer print would support the current risk-on tone, while a surprise to the upside could quickly challenge it. Thursday features the Philly Fed Manufacturing Index and Initial Jobless Claims, providing insight into economic activity and labor market strength. In addition, 10 Fed speakers are scheduled throughout the week, meaning policy commentary could drive volatility at any time.

Overall, this week’s data will be critical in confirming whether the recent macro shift can hold.

Bitcoin reclaimed $72,000 on Friday afternoon and pushed as high as $73,800 on Saturday, before pulling back below that level early Sunday. Price is currently sitting at $71,000.

The two-week liquidation heatmap shows leveraged positions clustered on both sides of current price. To the downside, liquidations concentrate around $65,000, coinciding with a key technical level, while to the upside they sit around $78,300, near the weekend highs. Moves in either direction are possible, and how traditional markets open today will be an important early signal.

Bullish Scenario: Bitcoin reclaims $72,000, with long entries becoming attractive on a bullish retest of that level, targeting $74,400 and invalidated on a loss of the entry level. A clean reclaim and sustained hold of $74,400 opens further long opportunities on retest, with the next target at $78,300.

Bearish Scenario: Bitcoin fails to reclaim $72,000, with short entries valid on a confirmed bearish retest of that level, targeting $65,500 and invalidated on a reclaim above it. A decisive break below $65,500 opens further downside toward $60,700, similarly invalidated on a reclaim of the broken level.

When looking at the bigger picture, TOTAL3 continued trading sideways this past week after bouncing off the $695B technical level on Tuesday, ranging between $705B and $720B without a meaningful breakout in either direction. The next key target to the upside remains $743B, and until TOTAL3 reclaims that level, the broader altcoin market remains suppressed.

ETH/BTC mirrored that price action, drifting sideways between 0.0304 and 0.0316 while holding above the 0.0306 technical level for now. The pair has been in a sustained downtrend since topping at 0.043 last August, and the technical structure remains bearish, the ratio is currently forming a lower high, pointing toward further downside unless 0.0372 is decisively reclaimed.

Investor Implications: Both charts tell the same story: the altcoin market has stabilized, but has not recovered. TOTAL3 holding $695B and ETH/BTC holding 0.0306 are encouraging floors, but floors alone don't justify rotation. With TOTAL3 still capped below $743B and ETH/BTC forming lower highs in a multi-month downtrend, no independent altcoin strength has emerged. Bitcoin-first positioning remains the appropriate stance, and altcoin exposure should stay limited until either TOTAL3 clears $743B with conviction or ETH/BTC breaks its downtrend structure above 0.0372.

We hope this report provided you with valuable insights into the latest market developments and geopolitical shifts.

As always, stay informed, stay prepared, and have a fantastic week ahead! 🚀

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