BlockBeats Market Observation | March 24: Cryptocurrency Market Mildly Rebounds, But Sustainability Remains to Be Seen

The cryptocurrency market saw a mild rebound over the weekend, with Bitcoin breaking through $85,000 and Ethereum surpassing the $2,000 mark. This increase was mainly driven by a strong performance in U.S. stock futures, leading to a slight recovery in market risk appetite.

Although concerns about an economic recession have not dissipated, the cautious remarks from Federal Reserve Chairman Powell during the FOMC meeting alleviated some market anxiety. The Cryptocurrency Fear and Greed Index rebounded from 32% (Fear) last week to 45% (Close to Neutral 49%), indicating an improvement in investor sentiment.

Notably, the inflow of funds into the spot Bitcoin ETF has seen a significant rebound, with a net increase of 8,775 Bitcoins worth approximately $744 million last week reversing the previous trend of continuous outflows. This suggests that institutional funds may be flowing back into the crypto market. Moreover, this round of price increase has been primarily driven by spot buying rather than leverage—Open Interest (OI) in perpetual contracts remains low, and funding rates are stable, indicating a relatively healthy market structure that avoids the severe liquidation risks associated with high leverage.

However, there remains uncertainty about whether the market can sustain its upward momentum: the tariff escalation set to take effect on April 2 may once again dampen sentiment towards risk assets. The implied volatility (IV) in the options market continues to decline, and risk reversals for various maturities are trending flat, suggesting that investors are not strongly betting on a one-sided market, contrasting with last week's bearish sentiment.

The QCP team stated that they will closely monitor whether this week's trend will repeat last week's pattern—i.e., a weekend rebound followed by a rapid decline within 48 hours. Although the current market shows signs of warming, whether it can form a sustained increase still requires further observation.