Bitcoin faces a challenging market landscape as we kick off a new trading week. In today’s report, we’ll dive into the latest price movements, critical technical levels, and the key on-chain and macroeconomic factors influencing the market.

Here’s what we’ll cover today:

Let’s dive in!

After opening up last week at 82,500 and climbing up to $87,400 on Thursday, Bitcoin saw a decline back to $83,000 on Friday. Over the weekend, bitcoin managed to climb higher once again and closed yesterday’s candle above our short-term key interest level at $84,300. Early this morning, the price kept climbing and is now trading at $87,100. Traditional markets saw volatility as well with the S&P 500 trading in a range between $5,600 and $5,700 throughout the entire week.

It’s worth noting that this consolidation is occurring just below a significant key level, making a continuation to the downside more likely in the short term, at least from a technical perspective.

Over the past few years, we've seen a major imbalance between government debt and the money supply. In 2020/21, the U.S. government’s debt skyrocketed while the money supply grew even faster, fueled by massive stimulus programs. This led to an "everything rally," but by 2022, liquidity dried up, and the market faced a harsh correction.

Now, we're seeing that the gap between base money (the money in circulation) and debt might have gone too far to the downside. This could signal a shift, with the potential for base money to outpace government debt growth. If this happens, it could provide more stability in the economy and pave the way for Bitcoin to continue its growth. There’s also the possibility that Trump's strategy of reducing government debt could help the private sector grow, giving Bitcoin even more room to rise.

Current market sentiment remains uncertain, and Crypto Twitter is filled with wild price action theories. However, the Fear and Greed Index is showing signs of normalization, currently sitting at 45 points, bringing it back to neutral territory. We use the Fear and Greed Index as a tool to track market sentiment, as it provides an objective, data-driven approach. Otherwise, relying on social metrics can be both challenging and subjective, often resulting in misleading results.

Notably, Bitcoin spot ETF inflows have been net positive throughout the entire past week, with no single day of net outflows, signaling strength and a potential resurgence in retail and Wall Street demand. 

With U.S. markets navigating rising uncertainty around Trump’s tariffs and their full impact on the economy and stock market, we expect price action between traditional markets and crypto to remain closely tied. Until traditional markets find relief and stability, betting on a full-blown crypto rally may carry increased risk for now.

It's going to be a big week ahead for the markets as several key economic reports will set the tone. We'll get a look at the Services PMI and Manufacturing PMI on Monday, giving us early insights into the health of the economy. On Tuesday, the House Price Index, Consumer Confidence, and New Home Sales will provide further clues about the housing market and consumer sentiment. Wednesday brings Durable Goods Orders, a crucial indicator for economic growth. Then, on Thursday, all eyes will be on Q4 GDP, Jobless Claims, and Pending Home Sales, which will give us a sense of the broader economic landscape. Finally, on Friday, the Core PCE Inflation, an essential gauge for the Fed, and Consumer Sentiment data will be released, giving us a clearer picture of inflation trends and consumer outlook.

President Trump's tariff-driven anti-globalization strategy aims to bring industries back home, but faces formidable obstacles. Global supply chains represent decades of development and aren't easily dismantled. While the stated goal is rebuilding domestic manufacturing, both consumers and businesses may suffer lasting consequences.

As April 2nd approaches, the potential impact of these tariff policies becomes more real. The changes are not symbolic, and once implemented, they will have lasting consequences. It’s essential to approach the markets with caution, avoiding overly optimistic expectations and preparing for the potential fallout from these policy shifts.

Looking at the daily chart, we can clearly see Bitcoin’s consecutive downtrend since its second rejection at all-time highs of $110,000 in January. This is illustrated by the red trend line, which we are currently facing as resistance at $87,000 after breaking above the key interest level at $84,300. 

The Bitcoin CME futures left a gap between $84,200 and $85,200 due to the rapid weekend rise. CME gaps often act as magnets, making it likely that price fills this gap before moving higher. Additionally, this gap aligns with a major cluster of leveraged liquidations, as shown on the Bitcoin liquidation heat map, marking a potential area of interest where price could seek liquidity before continuing its trend.

Bullish Scenario: To anticipate further upside and a bullish trend continuation, we’d like to see Bitcoin break above the red trend line and hold above it, as this would signal a potential shift in the overall trend structure from bearish to bullish. However, this doesn’t rule out another retest of our key level at $84,300. In fact, a short-term pullback to this area is likely, especially with the CME gap and liquidation leverage present. Ideally, Bitcoin should hold above this key level to demonstrate strength and bullish demand. This area could present long opportunities, with invalidation occurring if Bitcoin loses $84,300 and closes below it.

Bearish Scenario: In a bearish case, Bitcoin would remain below the red trend line and continue its overall bearish trend, making this recent price increase a lower high within a bearish trend structure. In that scenario, we’d likely revisit the key level at $84,300, take out liquidity, and fill the CME gap, but would probably continue lower as the bearish trend remains intact. In this case, we could be looking at short opportunities on a bearish retest of $84,300 once we fall below said level.

We track altcoins using both the TOTAL3 and OTHERS index charts to get a full view of the market. Today, we’re focusing on the TOTAL3, as we’ve referenced this chart several times before and some interesting developments have unfolded.

From a technical perspective, despite a lack of momentum and attention, the TOTAL3 index is holding above a significant higher time frame support level, which it’s been doing for around ten consecutive days. This suggests strength and demand, and as long as this level holds, it’s becoming increasingly likely that the bottom for altcoins is in.

Note that the TOTAL3 index is currently at a resistance level of $850B, and to shift market structure and break out of the bearish trend, we need to see a reclaim of that level and hold above it. Conversely, if we fail to hold above current support and break below, a retest of the lows around $716B seems increasingly likely, and in that case, our altcoin holdings would likely take another hit again.

Overall, we remain bullish on the altcoin market, and the broader outlook is positive. With global liquidity conditions easing, we expect altcoins to pick up momentum soon, and if the tariff situation becomes clearer and uncertainty decreases, we anticipate the sector to perform well.

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

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

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