Trading Desk Insights
Macro and geopolitical pressures weighed on risk assets heading into the second week of March as Bitcoin initially slipped toward the mid-$60,000s after failing to hold its latest breakout above $74,000. Escalating tensions in the Middle East pushed oil prices sharply higher, raising concerns about a potential supply shock and its impact on global inflation. However, markets saw some stabilization at the start of the week, with Bitcoin rebounding back toward the $69,000 level as traders reacted to reports that major economies could coordinate a release from strategic petroleum reserves to ease pressure on energy markets.
Oil volatility has quickly become the dominant macro theme for markets. Fears surrounding potential disruptions near the Strait of Hormuz have driven a rapid move higher in crude prices, with some estimates suggesting that the current shock could remove more than 20 million barrels per day from global supply if the situation escalates. Rising energy prices are particularly important for markets because they tend to feed directly into inflation, which could complicate the Federal Reserve’s policy outlook in the coming months.
This dynamic creates a challenging environment for risk assets. While recent economic data has shown signs of softening growth, which would normally support expectations for interest rate cuts, a sustained surge in oil prices could reintroduce inflationary pressure and delay any shift toward easier monetary policy. As a result, upcoming inflation data such as CPI and PCE will be closely watched to determine whether energy costs begin translating into broader price pressures across the economy.
From a technical perspective, Bitcoin continues to struggle to sustain breakouts above its recent trading range. The move above $71,000 last week was quickly rejected, reinforcing a pattern seen multiple times in recent months where price briefly trades above resistance before retracing. These repeated deviations suggest that liquidity above the range is often being used as an opportunity for traders to exit positions rather than as confirmation of a sustained bullish breakout.
Despite this cautious price structure, broader market positioning suggests the selloff may still be relatively contained. Onchain data indicates that large investors have not significantly increased exchange inflows during the recent volatility, implying limited profit-taking from long-term holders. For now, Bitcoin appears to remain caught between macro uncertainty and resilient underlying demand, with traders likely to continue treating rallies as short-term moves until clearer signals emerge from inflation data and Federal Reserve policy expectations.
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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
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