Key Insights:
- Crypto news revisits bullish prospects as the total crypto market cap sits on 2% weekly upside, ending its 6-week bearish reign.
- On-chain data reveals how the bullish relief affected the DeFi landscape.
- Is the market at risk of more downside? Here’s what the prediction markets and analysts say about the matter.
The first week of March is a wrap, and it kicked off with a wave of positive crypto news. The week marked the most serious bullish attempt after the sideways and low-volatility price action in February.
Crypto news turned bullish, albeit briefly, in the first week of January. For context, the total crypto market cap bounced back by roughly 14% from $2.16 trillion ON 28 February to $2.48 trillion at its peak on 4 March.
The total market cap has since cooled down to $2.28 trillion, signaling that short-term profit-taking was still at play. This was largely driven by the high market uncertainty, on account of the ongoing geopolitical instability.
Nevertheless, the brief rally did make for some interesting crypto news at a time when the bears had overextended their stay. The market was so bearish that the bears maintained overall weekly dominance for 6 consecutive weeks.
The crypto market achieved a 1.72% net gain thanks to the demand resurgence in the first half of the week. This is the first time that the market has recorded a net weekly gain since early January.
Upbeat Crypto News Triggers Optimism And Boosted DeFi Activity
Numerous positive crypto news stories might be responsible for the green weekly close. For example, Crypto ETFs, especially for Bitcoin, kicked off the week with significant inflows.
The Trump administration also brought back the regulatory narrative. Moreover, crypto appeared to be gaining momentum despite the geopolitical situation. This was likely because the markets were already oversold.
The excitement in crypto market also manifested in the DeFi segment. According to Sentora, the total value locked in DeFi grew by $4 billion. The segment also received about $2.3 billion worth of stablecoin inflows.
Moreover, Ethereum maintained TVL dominance at 59.38%. Interestingly, RWA TVL was up about $770 million during the week.
These key data points revealed that price activity was not driven solely by speculation. It was backed by healthy growth in value, and part of that growth was rooted in real-world assets.
What’s Next For The Crypto Market?
A surge in DeFi activity this week was a sign of crypto market health despite being pummeled heavily by macro factors. However, it may also reflect market participants testing the waters.
The macro-outlook still leaned heavily on uncertainty, which is traditionally considered a bearish sign for risk-on assets. The world’s uncertainty index just clocked its highest levels in decades.
As per the latest crypto news, while uncertainty may have cooled slightly, it remained elevated. As such, investors may opt to wait on the sidelines to see how things will unfold before they make investment decisions.
It is worth noting that elevated uncertainty means investors remain focused on short-term profit-taking. This may be the reason why the bears regained dominance in the second half of the week despite a promising bullish start.
The Jury is still out on the crypto market performance in March. Some analysts believe that the market will resume its downside.
According to ZX Squared Capital, Bitcoin price may extend its downside by as much as 30% from its current levels.
Polymarket predicted an 80% chance that Bitcoin price could fall to $65,000 in March. The predictions market also predicted a 44% chance that it will rally to $75,000 and a 42% chance of a $60,000 price retest.
In other words, predictions suggest that it may take a while before Bitcoin reclaims the $100,000 price level. And since Bitcoin is a huge part of the crypto market, then altcoins will likely mimic BTC price moves.