MARKETS week ahead: March 4 – 9Last week in the news
There have been a lot of developments on financial markets during the previous week. Positive sentiment is still holding among investors. Previous week was the one which marked a higher level for Bitcoin and the crypto market, crossing the $2 trillion market cap. At the same time, easing inflation in the US has pushed yields lower, in expectations of the first Fed's rate cut in this cycle. The same sentiment pushed the S & P 500 to new all time high levels, reaching 5.137 as of the end of the week. The USD lost some of its value, supporting the price of Gold to push its price toward the almost new all time high at 2.082.
The US equity market moved to higher grounds after the latest published economic figures showed that the inflation is on the decreasing track. The Fed's favorite inflation gauge, the PCE Price Index reached 2.4% in January, which was fully in line with the market expectations. At the same time, the core PCE Price Index was standing at a level of 2.8% on a yearly basis, also in line with the market forecast. The latest figures are showing that the inflation in the US continues to slow down, which supported market optimism that the Fed might cut interest rates during the second half of this year. While markets are concentrated on a potential positive future earnings, some economists are arguing that the US debt increase is accelerating at the fastest pace from the previous period. As estimated, it is increasing around $1 trillion every 100 days. Last year Moody's Investors Service Agency decreased the rating of the US Government from stable to negative, amid concerns whether it will be able to service its debt obligations when they come due in the future period. As per currently available data, the US Government debt accounted for 124% of the US nominal GDP in December last year.
As the US economy is supporting market optimism, the Euro Zone economy is struggling with missed targets in an earning season. CNBC is reporting that a half of EU companies have missed earnings expectations, which were already lowered due to the environment of high interest rates, and high energy prices. This represents one of the worst earning seasons for the EU companies since the start of the pandemic. As Sharon Bell, who holds a position as a senior European strategist at Goldman Sachs, noted in a CNBC interview, there is an increasing trend among EU companies of buying back their own shares. In this way, the companies are trying to sustain the price level for their shares. However, it has been noted that sectors like technology and utilities have outperformed forecasts with their quarterly results.
News is reporting that the cash outflows from the Grayscale Bitcoin Trust (GBTC) continued during the previous period, with a spike on Thursday last week. Namely, as reported, the outflow of funds from the fund reached $600 million on Thursday only. The analysts involved in the matter are assuming that this sale was related to the court approval of Genesis to sell 35 million of GBTC shares. On the other hand, inflows into BTC exchange traded funds continue to increase, with BlackRock leading the market with an asset under management exceeding $10 billion.
Crypto market cap
What a week on the crypto market! This could be the short summary of the developments on the crypto market during the previous week. Total market capitalization reached levels above $2 trillion, while the majority of coins managed to gain somewhere between 15% and 50%. Several of them gained even above this percentage within a single week. This could be treated as a sort of postponed effect after the relatively calm market on the news that the first BTC ETF has been approved. However, it should be noted that the majority of investors were reluctant to start investing into riskier assets, considering unclear macroeconomic indicators and the question whether inflation is on the path toward the 2% target, or maybe not. This question was relevant in terms of whether the Fed will cut interest rates or maybe it will be postponed for the end of this year. Still, relatively solid inflation data, which is on a clearly down path supported the investors’ confidence during the previous week. Total crypto market capitalization was increased by 19% within a single week, adding $360 billion into the value of the market. Although this is still not the highest market cap that the crypto market historically reached, still, it represents a significantly close level, which might be breached in the future period. Daily trading volumes remained high during the week, moving around $ 90B on a daily basis. Total crypto market capitalization increase from the end of the previous year, currently stands at $626B which represents a 38% surge from the beginning of this year.
Bitcoin was again leading the market during the previous week`s surge. The coin gained 21.5% in value, adding more than $215B to its market cap. Ether was following the move of the BTC, with a slower pace, but still a high $56B in market cap which was almost 16% surge in the value. During the week, Solana had an extraordinary performance adding almost $12B to its value, increasing it by 26% on a weekly basis. Previous week XRP added $4.7B to its cap, surging by almost 16%. Bitcoin Cash was following the path of BTC, adding $3.4B to the cap, which was a surge of incredible 65% for this coin. DOGE increased its value by $7.6B or 62.5%, another excellent weekly performer. ADA was up by $5.2B in value, or 25%. The surprise of the week was certainly Theta, who reached a price of $2.13, which was an increase of 55.5% on a weekly basis. Theta is not a coin which is known for its sharp moves in price. Among coins which did not have an excellent performing week, like other altcoins, were Maker, with an increase in value of “only” 3.17% and Uniswap with an increase of 3.8%.
Sharp moves with market prices imposed significant activity among coins in circulation. Here Tether should be especially mentioned, as the coin managed to add 1.3% of new coins on the market, while increasing its cap for this value. Polkadot and Polygon were among highest gainers on the market during the previous week, where Polkadot added 2.9% of new coins on the market, while Polygon`s coins increased by almost 3% during the single week. Filecoin added 0.9% of new coins, while the majority of other altcoins increased their circulating coins by 0.1%.
Crypto futures market
In line with the spot market developments, the previous week was an incredible one also on the crypto futures market. By following investors' optimism from the spot market, the future prices were traded at significantly higher levels. BTC futures were increased by some 20% on average for all maturities, while ETH futures were traded higher by 13% on average, also for all maturities.
BTC`s short term futures ended the week around 22% higher from the week before, while futures maturing in December this year were last traded at price $66.305. At the same time, it should be mentioned that futures maturing in December 2025 ended the week at $71.276, which could be treated as a new all time highest value for BTC.
ETH short term futures were traded above 16% higher from the week before. At the same time, futures maturing in December this year were last traded 13.85% higher, and finished the week at price $3.601. Those futures maturing in December 2025 reached the price of $3.774.
