Mar 23
Week 12, 2024 - Weekly Market Outlook
The weekly market outlook article provides a brief analysis of the past week's market performance and an outlook for the upcoming week.
Introduction
In this weekly market outlook, we examine the most recent updates in the cryptocurrency ecosystem. With an emphasis on Bitcoin and the macro environment, we analyze recent price action. We evaluate the global cryptocurency market cap, DeFi stablecoin flow and do a short review of the crypto market's biggest gainers and losers. Finally, we evaluate the performance of the Flagship Portfolio Vault.
Macro
At its March 2024 meeting, the Federal Reserve (Fed) decided to keep the overnight federal funds rate between 5.25% and 5.5%. This is the fifth time in a row the Fed has chosen not to change rates, maintaining them at their highest level in over 22 years. Chairman Jerome Powell stated the Fed is dedicated to reducing inflation to its 2% goal. He mentioned significant progress towards the Fed's dual mandate, noting the reduction in inflation and a strong labour market, which he described as very positive developments.
Market experts had expected the Fed to maintain current rates, influenced by recent labour market data and inflation rates. The Federal Open Market Committee (FOMC) did not specify when rate cuts might occur, though predictions suggest the first cut could be in June. The Fed continues to project three rate cuts in 2024, but this is subject to change based on incoming data. Powell highlighted a data-dependent approach, evaluating each decision one meeting at a time.
The FOMC's post-meeting press conference shed light on its current thinking and potential next moves but provided little certainty on the timing for rate reductions. Despite high-interest rates, economic growth has been strong, and inflation has decreased significantly over the last year, leading to raised growth and inflation expectations for 2024. However, Powell pointed out that inflation is still above the target and the labour market is overly tight, adding that the economic outlook remains uncertain.
Powell indicated that while interest rates might have reached their peak for this cycle, any reduction would only happen once there is greater confidence that inflation is steadily moving towards the 2% target. He also mentioned the Fed's readiness to keep rates steady for an extended period if necessary, to ensure inflation decreases significantly. Powell considered achieving a soft economic landing uncertain, yet noted that the risks to the Fed's employment and inflation goals are becoming more balanced, thanks to the recent moderation in the labour market and inflation.
Bitcoin
The Bitcoin ETFs are currently seeing their largest three-day outflow since their inception. This reversal from the previous massive inflows comes after Bitcoin reached an all-time high of $72,000 last week. The outflows totalled over $742 million this week, with the Grayscale Bitcoin Trust experiencing $1.4 billion in outflows alone, in addition to slower inflows into the BlackRock and Fidelity offerings, which are the second and third most popular products, respectively.
Despite the success of spot Bitcoin ETFs, they cannot attract new investments every day. The outflows from GBTC, in particular, seem to be driven by early investors seeking to capitalize on recent all-time highs. Grayscale acknowledged that its diverse shareholder base might engage in various strategies affecting the trust's flows, including gains harvesting, arbitrage trading, and share liquidation for debt repayment in bankruptcy cases.
Top Gainers and Losers
As a top performer this week: BOME with over a 100.8% gain. BOME is a Solana memecoin that’s been causing a stir in the crypto community. So, what sets BOME apart from other memecoins on the market? Well, for starters, it offers a comprehensive suite of features designed to empower meme creators and preserve meme content for years to come.
The worst performing asset this week is Space ID.
Global Market cap
The total market capitalization of the cryptocurrency ecosystem dropped from $2.7 trillion to $2.5 trillion
Stablecoin Flows
The total market capitalization of stablecoins has risen to around $145 billion.
Flagship Portfolio Vault Performance
Over the past 7 days, the share price of the Portfolio Vault went from $66.74 to $72.74, which is a 8.99% increase.
We have decided to remain ultra-bullish Bitcoin as our indicators are flashing an ultra-bullish crypto environment. While it's not an alt-season environment, we are observing certain altcoins outperforming the market. Consequently, we have decided to not rebalance our vault and let our winners ride. Therefore, our risk profile can be classified as ultra-bullish.
If you’d like to access Flagship’s portfolio Vault, click here.
Disclaimer: Nothing on this site should be construed as a financial investment recommendation. It’s important to understand that investing is a high-risk activity. Investments expose money to potential loss.
