03/23 - Macro for Humans

Market Overview

Headline

Crypto Consolidates as Global Markets Seek Direction

Summary

Bitcoin holds steady around $83,800 while traditional markets show mixed signals. The dollar weakens and Treasury yields retreat, creating a cautiously optimistic environment for risk assets.

Mood

The market feels like a coiled spring – there's tension building, but it's unclear which direction we'll snap.

What Changed Recently

Treasury yields have pulled back sharply from recent highs, easing some pressure on risk assets. The S&P 500 is showing signs of life after its recent tumble.

Comparative Market Analysis

Vs 7 Days Ago

Stocks

The S&P 500 has stabilized after last week's drop, now consolidating. This reduced panic is allowing crypto to find its footing.

Dollar

The DXY has weakened over the past week, providing a tailwind for Bitcoin and potentially setting up altcoins for a rally.

Interest Rates

Treasury yields have retreated significantly, easing concerns about aggressive Fed tightening and creating a more favorable environment for crypto.

Bitcoin Dominance

BTC dominance is unchanged, suggesting the market is in a holding pattern as traders assess the shifting macro landscape.

Vs 14 Days Ago

Stocks

The S&P 500 remains below levels from two weeks ago, but the panic selling has subsided. This gradual stabilization is allowing crypto to regain some confidence.

Dollar

The dollar's continued weakness over the past two weeks is a positive sign for crypto, as it often thrives when the USD loses strength.

Interest Rates

While yields are down sharply from their recent spike, they're still elevated compared to two weeks ago. The market is adjusting to this new 'higher for longer' rate environment.

Bitcoin Dominance

BTC dominance has crept up slightly over two weeks, indicating a cautious market still favoring the relative safety of Bitcoin.

Crypto Specific Trends

Current State

Bitcoin Vs Alts

Money is cautiously favoring Bitcoin right now. It's like investors are dipping their toes back into crypto, but sticking to the shallow end of the pool.

Hot Sectors

DeFi and Layer-2 solutions are seeing renewed interest as the market stabilizes and looks for growth potential.

Volume And Activity

Trading volume is below average, telling us that many traders are still on the sidelines, waiting for a clearer signal.

Key Shifts

Week Over Week

The panic selling from last week has subsided, replaced by cautious accumulation, particularly in Bitcoin.

Two Week Trend

We're seeing a gradual shift from fear to cautious optimism as macro conditions improve and crypto holds key support levels.

Notable Reversals

The sharp reversal in Treasury yields has been the most significant shift, easing pressure on risk assets including crypto.

What This Means For Traders

If Youre Bullish

• Look for high-quality altcoins that have held up well during recent turbulence. They may be coiled for a breakout.
• Wait for Bitcoin to decisively break above $85,000 before adding to long positions.
• Consider scaling into positions rather than going all-in, as we're still in a consolidation phase.

If Youre Bearish

• Focus on overbought altcoins that have run up without fundamental improvements.
• Watch for a potential double top if Bitcoin fails to break $85,000 convincingly.
• Be prepared to close shorts quickly if we see a surge in volume and price – this consolidation could resolve to the upside.

If Youre Uncertain

• Dollar-cost averaging into Bitcoin remains a solid approach in this choppy market.
• Keep an eye on the $80,000 support for Bitcoin. A break below could signal more pain ahead.
• An uptick in trading volume coupled with a break above $85,000 would suggest the consolidation is ending.

Evolving Trading Guidance

What Changed

From 7d Ago

A week ago, defensive positioning was key. Now, we're seeing opportunities to cautiously add risk as panic subsides.

From 14d Ago

Two weeks ago, the trend was clearly bullish. Now, patience and selective entry are more important as we navigate this consolidation.

Current Best Opportunities

Look for high-quality projects that have held support levels during the recent turbulence. They may be primed for a bounce as confidence returns.

Approaches To Avoid

Avoid chasing pumps in low-cap altcoins. In this environment, liquidity can dry up quickly, leaving you trapped.

Timing Considerations

This is a market for swing traders and position builders. Day traders might find better opportunities once a clear trend re-emerges.

Key Levels To Watch

Critical Thresholds

Bitcoin $85,000 (resistance) and $80,000 (support). A break of either could signal the next major move.

Recent Breakouts

The S&P 500 reclaiming its 50-day moving average is a positive sign for risk appetite.

Approaching Tests

Watch for Bitcoin to test the $85,000 resistance. A high-volume break could trigger a broader crypto rally.

Final Advice

Main Takeaway

Stay nimble and be ready to add exposure, but wait for clear confirmation before making big moves.

Biggest Change

The sharp reversal in Treasury yields has significantly improved the backdrop for crypto compared to two weeks ago.

Risk Reminder

While conditions are improving, we're not out of the woods yet. Use stop-losses and don't overleverage in this uncertain environment.