March 24, 2025
Bitcoin Rebounds Above $88,000 as Spot Buying Returns
Dear Subscriber,
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| By Marija Matic |
Last week, I told you that bearish sentiment in the cryptocurrency market was slipping by the wayside.
Now, things are ramping up, with the Fear & Greed Index rising from an extreme fear reading of 10 on Feb. 27 … to 32 last week. It now hovers at a nearly neutral 45.
This is a plot of the Fear & Greed Index over time. A value of 0 means "extreme fear," while a value of 100 represents "extreme greed":
We’re not in greedy territory just yet.
But the recent climb to an almost neutral mood suggests investors are less pessimistic following Federal Reserve Chair Jerome Powell's relatively balanced comments at the recent Federal Open Market Committee meeting last week.
More exciting is that we’re starting to see this shift reflected in the latest price action. Bitcoin (BTC, “A-”) has now pushed back above $88,000 and Ethereum (ETH, “B+”) reclaimed the $2,000 level.
This upward movement appears to be in line with broader financial markets, as equity futures also posted gains.
Spot Buying is Encouraging
Perhaps the most encouraging signal of what’s to come has been the spot Bitcoin ETFs, which recorded substantial inflows of 8,775 BTC (approximately $744 million) last week.
This influx of institutional capital breaks a multi-week streak of outflows and indicates renewed confidence among larger investors.
Even when looking at the retail data, what makes this rally particularly interesting is its apparent foundation in spot buying rather than leveraged speculation.
With perpetual futures open interest remaining low and funding rates neutral, we're seeing evidence of genuine demand rather than speculative excess.
That is a healthier foundation for sustainable price appreciation.
Bitcoin's ability to establish itself above the breakout level would represent a significant development. Last week's positive weekly close further reinforces the constructive outlook.
And if the No. 1 crypto by market cap can secure a daily close above $87,000, it could target the most important resistance range between $89,000 and $91,000.
Should the current pump extend beyond the typical "Monday effect," we may see a substantial increase in long positions as traders gain confidence in the sustainability of this move.
Trump Embraces Crypto as Stablecoins Gain Economic Clout
Last week's address by President Trump at the Blockworks Digital Asset Summit re-affirmed a crypto-friendly stance from the administration.
By calling on Congress to establish "simple, common-sense rules" for stablecoins and market structure, Trump signaled support for a regulatory framework that could provide the clarity the industry has long sought.
His stated goal to ensure America "dominates crypto and the next generation of financial technologies" suggests a competitive rather than restrictive approach to the sector.
Another intriguing development comes from the stablecoin sector: Tether (USDT, stablecoin) has emerged as a major buyer of U.S. Treasury bills.
According to Tether CEO Paolo Ardoino, the company has become the seventh-largest purchaser of Treasury securities among countries in 2024, surpassing established nations like Canada, Taiwan and Mexico:
This growing economic footprint underscores the increasing systemic importance of stablecoins like Tether to both the crypto ecosystem and traditional financial markets.
As major buyers of U.S. Treasury bills, the economic footprint of stablecoins has grown too substantial for the administration to ignore.
It’s no wonder the U.S. is making the establishment of "simple, common-sense rules" for stablecoins a cornerstone of its new financial technology strategy.
Navigating Market Uncertainty with Strategic Positioning
Despite these positive indicators, caution remains warranted. After all, the upcoming tariff escalations scheduled for April 2 could renew pressure on risk assets across the board, even though the situation is fluid and has a chance to be less severe than expected.
Nevertheless, Bitcoin and other cryptocurrencies have already absorbed substantial downside. And any rally in equities is likely to benefit digital assets disproportionately, given their heightened sensitivity to broader market movements.
Which means this period of uncertainty can create strategic opportunities.
With short positions being crowded around the $70,000-$75,000 range, there's potential for upward pressure if positive momentum continues, as market participants may be forced to reassess their positions.
The key question remains whether this rebound marks a temporary bounce … or signals the onset of a more sustainable recovery phase.
While challenges persist, the confluence of spot buying, improving sentiment metrics and the administration's supportive stance suggests we may be witnessing the early stages of a more durable market recovery.
And my colleague Juan Villaverde’s analysis indicates a similar outlook.
Investors who are able to position themselves now could benefit significantly if this nascent momentum continues to build through the second quarter.
I suggest updating your watchlist and target prices. You’ll want to be ready to hop in once the market well and truly kicks off.
Best,
Marija Matić
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