As the week unfolds, the crypto market is facing renewed pressure after a short-lived rebound lifted investor confidence. Total market capitalization slipped 0.74% to $2.31 trillion on Sunday. The decline followed fresh Bitcoin-led selling as traders reacted to macro uncertainty.
Bitcoin price recently surged above the $70,000 level, breaking through a key resistance zone. The surge was, however, not very long-lasting as it now has $68k. Cryptocurrency-related investments, such as Coinbase, also surged as the wider risk assets rebounded.
Geopolitical tensions and inflation fears soon cropped up, though. The increasing fears of a long U.S.-Iran conflict shook the world markets. Oil prices increased to over $115, which strengthens a cautious tone and inflation expectations.
Analysts are now concerned that volatility will be even greater during the week. A number of significant economic releases will occur within a few days. The traders are anticipating quick responses because there are new data that changes the interest rate expectations.
Key Macro Catalysts That Could Shake Crypto Markets This Week
The first major event is the report issued by the U.S. Consumer Price Index on March 11. Monetary policy expectations are usually affected by the inflation data. Increased readings would postpone possible rate decreases and strain risk assets.
On the other hand, lower figures of inflation can prompt fresh purchases. Inflation rates are also very important to investors to give them indications on the liquidity situation. Crypto assets are generally sensitive to such changes.
The next focus is on the interest rate decision made by the Federal Reserve on March 18. Markets will scrutinize statements from the Federal Open Market Committee. Subtle changes in tone can alter investor positioning across global markets.
A $6.67 billion liquidity injection is also expected this week. Liquidity operations can influence short-term funding markets and investor confidence. Increased liquidity sometimes supports speculative sectors like digital assets.
Japan will release updated gross domestic product figures on Monday. Growth data from the world’s third-largest economy can affect global risk sentiment.
Thursday will bring fresh data on the Federal Reserve’s balance sheet. Analysts track these numbers to understand changes in monetary conditions. Expanding assets may signal easing, while contraction suggests tightening.
The week concludes with the U.S. JOLTS report on job openings. Labor market strength remains central to Federal Reserve policy decisions. Strong employment demand could support a cautious rate outlook.
Bitcoin Price at Critical Support: Will $68K Hold or Break?
The recent pullback of Bitcoin puts emphasis on important technical levels. Analysts point to the range of $67,000 to $66,000 as a significant support range. Above this level would help stabilize short-term sentiment, according to the full Bitcoin forecast report.
A break below could be interpreted as a strong invitation to sell. On-chain analysis shows that there is a level of structural support of $65,000. Violating it may enhance downside momentum.
Institutional flows are also under scrutiny. Spot Bitcoin exchange-traded funds recorded $348.8 million in net outflows on March 6. That shift signals weakening institutional demand after prior inflows.
Source: Sosovalue dataExtreme Fear Signals Bigger Swings Ahead — Crash or Rebound?
Investor sentiment currently reflects deep anxiety. CoinMarketCap Fear and Greed Index stands at 19, and this is an extreme fear value. These have traditionally been linked to high volatility rather than smooth trading.
Confidence is still under the strain of geopolitical risks. Broader inflation concerns have been driven by oil prices exceeding $115. High energy prices can make central banks decision-making complex.
With the most important economic data and central bank signals coming in, volatility seems inevitable. It is unclear whether the crypto market will undergo a sharp correction or a new rally. The macro events that occurred this week could eventually decide the next big step.
Source: https://coingape.com/markets/will-crypto-market-crash-this-week-analysts-predict-timeline-for-volatility/
