Increased possibility of a market correction
Thank you for joining us again for our weekly analysis of last week's economic and cryptocurrency news to see how this week's events will affect your investments and trades.
Summary: A lot happened in the economy and the crypto sector last week. President Trump's statements continue to drastically affect the market, and the S&P 500 suffered one of the fastest corrections in history. From a global perspective, the economy is expected to slow down due to trade tensions and protectionist policies in various countries. The crypto sector paused its recovery after some corrections last week, while altcoins continue to show no upward momentum. The market is very volatile ahead of next week (mark April 2nd as a key day).
Main economic news of the week:
Tariff policies in the United States are being softened. The president, in a press conference, focused on the possibility of imposing tariffs only on certain sectors and proposed that some countries have exceptions. This positively impacts the state of trade relations and slightly reduces tensions in the financial markets (which is why they are opening sharply higher today, Monday).
The SEC, under its new leadership, is focusing on traditional financial sector problems.
The U.S. Securities and Exchange Commission announced that, under its new chairman, it will focus on more traditional cases (a respite for crypto). The main emphasis will be prosecutions against fraudulent individuals and operations, fraud against the elderly population, fraudulent trading based on insider information, and misappropriated accounting and contract transactions.
This signal of planning updates previous policies in the sector and will likely also influence the regulation of the upward trend in the technology and cryptocurrency sectors.
Financial Markets Suffer Recession Fears.
In the U.S., the risk of entering a recession remains, although investors could reallocate market resources if macroeconomic data, such as today's CPI, show signs of slowing inflation. Investment funds warn that uncertainty will remain until the Trump-led tariff moves are revealed. February CPI
According to available data, the headline CPI increased by 0.2% seasonally adjusted in January. Headline inflation also stood at 2.8% seasonally adjusted over the past twelve months, down from 3.0% the previous month. On the other hand, the core CPI also grew by 0.2% seasonally adjusted in February, and by 3.1% over the past year, which shows signs of more resilient inflation.
Although the data reveal growing signs of slowing inflation, pressures remain for the financial sector. The data were in line with analysts' estimates, who expected headline inflation around 2.9% and a more modest month-over-month inflation rate. The question for investors now is how much this data will be worth to the Federal Reserve in the May interest rate discussions.
Key news from the crypto space:
MicroStrategy Surpasses 500,000 Bitcoins on Its Balance Sheet
MicroStrategy acquired 6,911 bitcoins for approximately $584.1 million between March 17 and 23, bringing its total bitcoin holdings to 506,137 units. To date, MicroStrategy has purchased bitcoins totaling approximately $33.7 billion, equivalent to approximately $66,608 per unit. The current value of the investment is expected to exceed $44 billion.
The latest batch of bitcoins was acquired through two common stock seller programs – $325.30, an increase of 7%, outperforming the S&P 500's 1.7% gain.
Over the same period, the price of Bitcoin rose 3.9%, reaching $88,349. Cryptocurrency-related investments, including Coinbase Global, +6.2%, and Robinhood Markets, +9.7%, also grew significantly. MicroStrategy remains the largest corporate holder of Bitcoin, allowing investors to indirectly own the digital asset.
Bitcoin and Ethereum Price Surge
Thanks to President Trump's latest tariff comments, Bitcoin and other cryptocurrencies rallied today, Monday. The price of Bitcoin rose from $84,000 on Friday to $89,000, while the price of Ethereum plummeted from $1,860 to $2,090.
Fed Chairman Jerome Powell announced that the tariffs would have a "transitory" and short-term inflationary effect. BTC ETFs saw inflows of $644 million last week, ending a five-week streak of outflows. Bitcoin impressed with inflows of $724 million, although Ethereum also experienced outflows with $86 million.
iShares and Fidelity products appear to be experiencing heavy trading but continue to struggle with outflows since the beginning of the month. Cryptocurrency-related stocks and ETFs, such as Coinbase and Strategy, remained profitable on Monday, but Strategy added even more Bitcoin to its portfolios.
Eighteen US states will compete to establish their own Bitcoin reserves. Economically speaking, these states already surpass Mexico and Spain in terms of gross wealth, and their Bitcoin adoption promised to widen that imbalance.
Volatile Financial Markets
Over the past week, financial markets have been quite volatile due to trade tensions and concerns about economic growth. Currently, the traditional volatility index is still above 20 points for the second consecutive week, suggesting the high volatility in the area.
Fear and Greed
Over the past week, the Fear and Greed Index was 45, suggesting that trading sentiment is subdued, but we are moving out of the fear zone, which can be interpreted as a good sign.
The 5 winning cryptocurrencies of the last 7 days:
Bitcoin (BTC) Increased 3.9% this week.
Dogecoin (DOGE) Increased 7.7% in the last few days.
Polkadot (DOT) Increased 6.3% for the week.
Litecoin (LTC) Increased 3.3% in value.
Uniswap (UNI) Increased 6.1% in the last seven days.
The 5 losing cryptocurrencies of the last 7 days:
Ethereum (ETH) Lost 4.6% this week.
BNB (BNB) Decreased 2.0% in value.
Solana (SOL) Decreased 8.7% for the week.
Polygon (MATIC) Decreased 5.2% in the last seven days.
COMBO (COMBO) Decrease of 30.4% in the last seven days.
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