BTC Price Set for Worst Q1 Since 2020 as Trump Approaches 100 Days

By James Van Straten (All times ET unless indicated otherwise)

As March approaches its end, the crypto market has experienced a notably challenging first quarter, primarily reflected in price movements. Bitcoin (BTC) has faced a 10% decline, marking its weakest first-quarter performance since 2020. Ethereum (ETH) is faring even worse, having recorded its poorest first quarter since its inception. However, Bitcoin appears stable so far this month.

This period coincides with the last days of President Donald Trump’s initial 100 days in office, a historical timeframe known for generating uncertainty and market volatility, which is anticipated to continue at least until April wraps up.

The London Crypto Club, creators of a trading newsletter, have indicated that as the quarter concludes, the combination of negative liquidity and position management could induce heightened volatility, potentially resulting in erratic price movements.

Despite these short-term downturns, there’s a maintained bullish sentiment for the upcoming quarter. The Federal Reserve’s relatively dovish stance during its March meeting—despite no immediate rate cuts—paired with a weakening U.S. dollar, increased fiscal expenditures in the European Union, and a U.S. economy that is slowing yet not collapsing, provide support for anticipated growth in the next three months.

Bitcoin’s recent sell-off was primarily attributed to President Trump’s lack of specific updates regarding a national Bitcoin strategic reserve or tax-free capital gains for cryptocurrencies. Blockhead Research Network (BRN) stated that market participants were hoping for a much-requested tax-free capital gains framework or a national reserve policy for Bitcoin. Instead, Trump reiterated his general support for the crypto sector while emphasizing the importance of stablecoins in bolstering the U.S. dollar’s global dominance. Although this long-term support is reassuring, the absence of immediate policy developments serves as a bearish signal for the short term.

BRN anticipates that digital assets may struggle to maintain upward momentum, with accumulation continuing at lower levels, particularly for altcoins. They advise investors to remain heavily invested, as market reactions to positive developments could be swift, with support levels not far from current prices.

Market Updates and Key Events

Macro Indicators to Watch

• On March 23 at 8:30 p.m., S&P Global will release the Flash Japan March producer price index (PPI), with these previous figures: Composite PPI 52, Manufacturing PPI 49, and Services PPI 53.7.
• On March 24 at 9:45 a.m., S&P Global will also publish the Flash U.S. March PPI data with prior records indicating Composite PPI 51.6, Manufacturing PPI 52.7, and Services PPI 51.

Earnings Reporting

• March 27: KULR Technology Group (KULR) projected loss of $-0.02 (post-market).
• March 28: Galaxy Digital Holdings (GLXY) expected earnings of C$0.38 (pre-market).

Token Developments

Governance Votes and Proposals

• Aave DAO is considering the activation of Aave Umbrella, an initiative aiming to replace the existing Aave Safety Module. This system will enable users to stake their Aave aTokens, covering potential bad debt while earning rewards.
• Sky DAO plans to cast votes on key executive proposals, including rate changes and budget allocations.
• Compound DAO is discussing the implementation of COMP Staker to enhance governance participation and revenue sharing for COMP holders.

Token Unlocks

• Upcoming unlocks include:
  • March 23: Metars Genesis (MRS) unlocks 11.87% worth $307.8 million.
  • March 31: Optimism (OP) unlocks 1.93% worth $26.81 million.
  • April 1: Sui (SUI) sees 2.03% unlocked, valued at $147.01 million.

Market Movements

• Bitcoin is trading at $83,935.26, down 0.73% from previous sessions, with a 24-hour drop of 1.43%.
• Ethereum sits at $1,960.00, down 1.19%.
• The CoinDesk 20 index reflects a 1.29% decrease, currently at 2,648.64.

Market Positioning

In derivatives, Bitcoin futures open interest has decreased to 628,000 BTC, suggesting that the recent price drop reflects the unwinding of long positions rather than new shorts entering the market. On the other hand, Ethereum open interest remains significantly high, highlighting trader sentiment of shorting throughout the market downturn.

Bearish indicators are emerging in the options market, where there has been an uptick in put-buying activity, signaling a cautious outlook among investors as uncertainty lingers.

The upcoming weeks in the crypto landscape will see a mix of earnings reports, on-chain developments, and macroeconomic data releases that could provide direction amid ongoing volatility. Investors and traders are advised to stay alert for opportunities and potential challenges as the market reacts to evolving narratives and economic indicators.