Midday Market Analysis: Macro Expectations Rebound Coexist with Structural Divergence

Today's midday cryptocurrency market continues the recent pattern of volatility and consolidation. Bitcoin is building support near a key psychological level, while Ethereum shows relative weakness. On the macro front, marginal improvements in Federal Reserve policy expectations and sustained institutional accumulation provide dual support. However, the selling pressure on altcoins has reached a five-year high, indicating increasing internal market divergence. In the short term, the market is at a critical juncture for direction, and it is recommended to maintain a defensive stance and monitor key price breakouts.

1. Market Overview and Key Data

Recent market dynamics show Bitcoin prices remaining at relatively high levels with oscillations. According to previous data, Bitcoin faces significant technical resistance around $91,000, which has become a focal point for both bulls and bears. Ethereum, on the other hand, is more weakly positioned, having broken below the $3,000 psychological level, with a dip below $2,000 in mid-February, and a 24-hour decline of over 3%.

Notably, institutional funds continue to flow into the crypto market. The spot Bitcoin ETF has seen a net inflow of $6.63 billion over the past five weeks. BlackRock’s crypto investment portfolio has surged from $54.77 billion at the start of the year to $102.09 billion, nearly doubling. This data indicates that despite short-term price volatility, long-term capital allocation remains steadily increasing.

2. Macro Environment Analysis

Marginal Warming of Monetary Policy Expectations

The latest adjustments in the Federal Reserve’s interest rate policy support market liquidity. The December FOMC meeting eliminated the standing Repurchase Agreement (SRP) limit of $500 billion daily, allowing banks to borrow from the Fed using unlimited government bond collateral. This policy change significantly increases market liquidity supply. Meanwhile, expectations for rate cuts in 2026 are being re-priced, and the continuation of quantitative easing is bullish for risk assets like Bitcoin.

Regulatory Environment Continues to Improve

The departure of SEC "anti-crypto" commissioner Caroline Crenshaw signals a further softening of regulatory attitudes. Additionally, Bernstein research reports that a "perfect storm" of political and regulatory forces is creating ideal conditions for US stablecoin legislation. Major financial institutions are evaluating how to incorporate stablecoin issuance or settlement into their business models. Clarifying regulatory frameworks will reduce institutional uncertainty and lay a foundation for long-term market health.

3. Technical Analysis

Bitcoin: Building Momentum Before Key Resistance

From a technical perspective, Bitcoin has formed a complete macro bull cycle structure since the March 2024 low of $61,000. The current level of $91,000 is not only a previous high resistance but also a psychological barrier. From the distribution of holdings, the market needs sustained momentum to effectively break through this resistance. During midday, prices remain within recent oscillation ranges, with declining volume indicating the market is waiting for a new catalyst.

Initial support levels are at $85,000–$87,000, an area of previous heavy trading and a key defensive line for bulls. If broken, the price could retest the $80,000 round number.

Ethereum: Weakness Awaiting Repair

Ethereum’s technical pattern is more fragile compared to Bitcoin. The $3,000 psychological level, once lost, has a significant negative impact on market sentiment. Current prices are deviating from long-term moving averages, with short-term oversold conditions, but rebound momentum is weak. On-chain data shows whales holding $126 million worth of ETH have been continuously withdrawing assets from exchanges, indicating large holders are still accumulating on dips but have yet to establish effective support.

4. Market Sentiment and Capital Flows

Altcoin Selling Pressure Hits Five-Year High

It is noteworthy that the market shows clear structural divergence. Recent data indicates that altcoin selling pressure has reached a five-year high, with funds shifting from high-risk small-cap tokens to leading assets. This trend contrasts sharply with the broad rally in late 2021, suggesting market participants’ risk appetite has significantly decreased and investment logic has become more rational.

DEX Trading Volume Share Hits Record High

Decentralized exchanges (DEX) spot trading volume share has exceeded 20% for the first time, setting a new record. This structural change reflects declining trust in centralized trading platforms and rising demand for transparent on-chain transactions. In the long run, this trend will accelerate the development of DeFi infrastructure, though it may increase market volatility in the short term.

5. Strategic Recommendations

Position Management: Maintain a Defensive Stance

Given the current market environment, a "gold + Bitcoin" barbell strategy is recommended. Based on previous asset allocation frameworks, allocate 30%-40% of the portfolio to gold as a risk hedge anchor, with the remaining funds invested in Bitcoin and quality mainstream coins. This allocation captures the long-term growth potential of crypto assets while providing effective downside protection in extreme conditions.

Bitcoin Trading Approach

• Short-term traders: Focus on the breakout of the $91,000 resistance. If volume confirms a breakout, consider adding to positions with targets around $95,000–$98,000; if multiple attempts fail, watch for pullback risks and look for buying opportunities near $87,000.

• Medium- to long-term investors: Current levels are mid-bull market, so dollar-cost averaging is advised to build positions gradually, avoiding heavy single-position exposure. Pay close attention to ETF fund flows and institutional holdings as key indicators of market trend.

Ethereum Trading Approach

• Do not blindly bottom-fish at current levels; wait for clear stabilization signals. Watch the $2,800–$3,000 resistance zone; if prices can recover and hold above $3,000, consider participating in rebounds.

Risk Management

• Set strict stop-losses, limiting individual trade losses to 5%-8%.

• Avoid high leverage trading; current market volatility is high, increasing leverage risks.

• Monitor US stock market close and Fed officials’ speeches in the evening, as they may trigger market swings.

6. Market Outlook

Looking ahead, the core variables for the crypto market remain macro liquidity conditions and institutional capital flows. Bernstein research predicts this crypto bull market could extend until 2026, with stablecoins and tokenized securities becoming main growth drivers. Mainstream platforms like Robinhood are expected to triple their crypto trading volume by 2026 compared to 2024, reflecting ongoing retail and institutional inflows.

However, in the short term, the market still needs to digest multiple uncertainties: the Fed’s policy path swings, geopolitical risks, and technical adjustments. Investors are advised to remain patient, accumulate quality positions during oscillations, and wait for clearer trend signals before increasing exposure.

Disclaimer: The above analysis is for reference only and does not constitute investment advice. Cryptocurrency markets are highly volatile; please invest cautiously and make decisions based on your risk tolerance.