The cryptocurrency market is starting to stabilize after February’s correction, but the continued extremely low sentiment suggests that investors are still unconvinced of the durability of the current rebound.
Bitcoin rate
The past week on the cryptocurrency market brought gradual stabilization after the period of increased volatility observed at the turn of February and March. Bitcoin returned above the $70,000 level, supported by capital inflows into ETFs and improving macroeconomic sentiment. At the same time, the continuing low level of investor sentiment indicates that the market remains cautious and the current rebound is more stabilizing than impulsive.
One of the main factors influencing the market behavior was the inflation data in the United States. The latest reading for consumer inflation was around 2.4% year-over-year, which was in line with economists’ expectations.
While inflation remains slightly above the Federal Reserve’s 2% target, it is significantly lower than in 2022-2023, when it was even above 8%. Such data is usually interpreted as moderately positive for risk assets because it reduces the pressure for aggressive interest rate increases.
Institutional capital and ETFs
The second important factor was capital flows into cryptocurrency ETFs. During the week under review, Bitcoin and Ethereum ETFs recorded approximately USD 170 million of inflows, which indicates the continued interest of institutional investors.
Following the earlier wave of liquidation of positions at the end of February, the level of financial leverage in the market decreased. Lower levels of leverage tend to stabilize the market because they reduce the risk of sudden moves resulting from cascading liquidations of positions.
Bitcoin’s dominance remained around 58-59%, indicating that investors still prefer the market’s most liquid assets. At the same time, some of the capital slowly began to return to selected altcoins.
Bitcoin bounces above $70,000
After a turbulent start to March, bitcoin started the analyzed week near USD 67,000. In the following days, the price gradually increased, again exceeding the level of USD 70,000 and stabilizing in the range of USD 70-72,000.
From a technical perspective, the $70,000 level has once again become an important balance point between buyers and sellers.
During the week under review, Ethereum also tried to rebuild its position after previously falling below USD 2,000. The price of the second largest cryptocurrency moved in the range of USD 1,950-2,120, ending the week near USD 2,100.
Despite the price rebound, market sentiment remains very cautious. The Crypto Fear & Greed Index remained close to 12 points in the analyzed week, which means a state of extreme fear.
Situation on the European market
The week brought stabilization of the cryptocurrency market after an earlier phase of increased volatility. Bitcoin remained around USD 70-72,000, and the capitalization of the entire market remained around USD 2.4-2.5 trillion.
In the coming week, investors will mainly watch further capital flows into ETF funds and further macroeconomic data from the United States.
