Volatile markets ahead as risk-off sentiment continues in Tradfi

​​$BTC 24 Hour High $39,697  / Low $38,000   |   $BTC -1.0% Past 24 hours; -0.5% Past 7 days

Good morning. Panel selling swept the DeFi space yesterday and sank dozens of tokens after prolific developer Andre Cronje and Anton Nell called it quits. As risk-off sentiment overtake the spotlight with intensifying geopolitical tensions and the FED meeting in mid-March, we should buckle up as the digital assets markets are likely to remain highly volatile.

$BTC crabbed sideways over the weekend when the bears stopped it from breaking into the $40,000 level again. If $BTC loses the support at $38,200, the 0.382 Fibonacci retracement level which is holding currently, $37,100 is the immediate support we need to keep an eye on. Any plunge below this level may extend the short-term pullback. The YTD trading activity has been high and suggests stronger support. But given the current market sentiment, a drop lower is not entirely unlikely. Equity futures traded significantly lower while DXY is continuing its move higher as demand for USD soars. It’s worth noting that $BTC’s correlations to NASDAQ and S&P bounce back to 0.7, while the DXY sits at -0.28. 

Compared to $BTC, $ETH is more sensitive to the Tradfi markets and is now inching towards the support level at $2,500, followed by the crucial support at $2,457 and $2,300. Based on the neutral RSI level, a slip towards $2,300 is very plausible, especially when we are very close to the 1.618 Fibonacci extension of the current price rollover. As the sentiment flips from bullish to bearish and back so quickly these days, the key is to buy at support and sell at resistance for potential opportunities. Funding rates are slightly negative across the board, implying hedging has been used in the futures markets. Yet the overall spot trading volumes are very low, suggesting not many market participants are selling their physical ETH actively at this moment. 

Market interest in NFT has also receded dramatically over the past 30 days, according to CryptoSlam’s data. February sales dropped by more than 30%, compared to January’s. To dampen the mood further, the SEC is scrutinizing the NFT market amid concerns that some of these collectibles may have broken securities laws – they might have raised money like traditional securities. However, February was coming off the back of a record hot January, where the trading volume on OpenSea stood at $4.95 billion, eclipsing the high made in August 2021 of $3.4 billion. In this light, February was still the second-highest month on record, with volumes at $3.6 billion. NFT enthusiasts will have more to cheer about as major exchanges start launching their own NFT marketplace within the next six months.

Learn more from today’s Trader View video

Digital Assets Market

  • Total crypto market capitalization stands at $1.72T, -3.6% from yesterday
  • $BTC is -2.9% at time of writing; 24H liquidations and funding rates: 37.5M, +0.00032% average
  • $ETH is -5.0% at time of writing; 24H liquidations and funding rates: 21.1M, +0.00462% average
  • Stablecoins market dominance: USDT 44.6%; USDC 29.5%; BUSD 10.0%; UST 7.7%; DAI 5.2%

Alts and DeFi watch:

  • DeFi TVL: $193.2B (-1.2% over last 24h)
  • $SOL -6.4% in the last 24 hours, -1.6% in the past week
  • $SHIB -5.0% in the last 24 hours, +0.1% in the past week
  • $SAND -6.3% in the last 24 hours, -3.2% in the past week
  • $ENJ -6.1% in the last 24 hours, -3.0% in the past week

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OSL Trader View is contributed by Stefan von Haenisch & Ethan Fu.

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