Decentral Block Post

Cryptocurrency markets have been trading within an unusually tight 5% range since March 17 as conflicting forces continue to pressure the sector. Consequently, in the past 7 days, the total market capitalization gained 3.8%, which was driven mainly by Bitcoin's (BTC) 3.6% price increase and Ether's (ETH) 5% gain.

On March 27, the Commodity Futures Trading Commission sued Binance and Changpeng "CZ" Zhao for allegedly violating trading and derivatives rules, heightening regulatory uncertainty. According to the lawsuit, Binance provided access to leverage for customers trading on the spot and futures markets.

The announcement came just five days after Coinbase received a Wells Notice from the U.S. Securities and Exchange Commission (SEC), which could target the exchange's staking program, listed digital assets, wallet and Coinbase Prime services.

Similar actions occurred outside the U.S., after Japan's Financial Services Agency (FSA) March 31 announcement that several foreign cryptocurrency exchanges, including Binance, Bybit, MEXC Global and Bitget had been operating in the country without proper registration, in violation of the country's laws.

The lateralization trend that began in mid-March has repeatedly tested the crypto market’s $1.14 trillion market capitalization support. The movement suggests that investors are hesitant to place new bets until more information on the lawsuits against Binance and Coinbase is available.

Bitcoin’s (BTC) price initially dipped, but then recovered on April 3. The volatility happened after several OPEC+ members announced plans to cut oil production totaling 1.65 million barrels per day until the end of the year. Some analysts expect this move to tighten supply, resulting in higher prices at the pump. That may in turn boost inflation, warranting a continued hawkish stance from central banks.

Initially, the United States dollar index (DXY) rose but it could not sustain the intraday rally. This suggests that the market participants believe the event will not cause any major deviation in the Federal Reserve’s policy. A weaker DXY is generally considered a positive for risky assets.

Cryptocurrencies have remained strong in the face of adverse macroeconomic news and regulatory action against crypto firms in the past few days. When the price of an asset does not crack with negative news, it shows that traders are not panicking and selling their holdings.

Could Bitcoin overcome the obstacle at $30,000 and start a bull run? Will altcoins also join the party? Let’s study the charts to find out.

S&P 500 index price analysis

The S&P 500 index (SPX) picked up momentum after breaking out of the wedge pattern. Buyers will try to push the price to 4,200 which is likely to act as a strong barrier.

The United States Federal Reserve began its most aggressive quantitative tightening efforts in March 2022, raising benchmark interest rates in the year since from near-zero to 4.75% to 5% annually. While the central bank has successfully brought down inflation to some degree, the increasing interest rates are starting to cause cracks in the global banking industry.

The market expects the Fed to end quantitative tightening and provide favorable liquidity conditions to avoid a global financial crisis as the banks begin to fail. The shift in the Fed’s policy should have significant implications for financial assets.

Jurrien Timmer, the director of global macro at Fidelity, discussed the likely impact of the Fed’s dovish pivot on stocks, gold and Bitcoin.

Market expects the Fed to put an end to interest rate hikes

The Fed is largely expected to either maintain the interest rates at current levels or start cutting rates. CME’s FedWatch Tool shows that the market is currently placing a 50% chance that the March 25 basis point hike was the last one for a while.

If the Fed stops its rate hikes, risk assets like equities can experience a positive rally based on historical data. The average one-year return in the S&P 500 index after the last rate hike since 1984 has been 18.9%.