“Overall this points to a stabilizing but still fragile ETF demand backdrop, where investors are no longer accelerating exits but are gradually repositioning capital, providing a potential floor to downside,” the firm said.
The other notable dynamic is the decoupling of the U.S. two-year Treasury yield, which is sensitive to Fed interest rate expectations, and WTI crude oil futures. While oil prices have collapsed, the two-year yield has strengthened, hovering at 4.21% as of this writing, the highest since February 2025. (Check the Daily Signal.)
The decoupling indicates that oil and geopolitical headwinds for risk assets have been replaced by Fed rate-hike expectations. It’s possible markets expect the second-order effects of the March oil-price spike to keep inflation higher in the near term, raising the likelihood of interest-rate increases.
The Fed’s preferred inflation gauge, the core PCE, is expected to confirm the trend. According to FactSet, it is forecast to have increased 0.37% on the month, lifting the 12-month rate to 3.4%, which would be the highest since May 2024.
Overall, the slower, yet still bleeding ETFs and hawkish hints from bond yields suggest lower odds of a convincing BTC price recovery in the short term.
And there’s also what Strategy, the largest publicly listed BTC holder, does to address concerns about the price volatility of its STRC preferred stock. Stay alert!