Market update | March 20th, 2026

Despite the FOMC meeting, Bitcoin holds stronger than other assets

Despite the relatively sharp price declines in Bitcoin, other asset classes have fared materially worse. Bitcoin remains up 10.7% since the onset of the recent stress period in Iran, while the Stoxx 600 is down 7.7% and gold has declined a notable 9.8%. In relative terms, Bitcoin continues to demonstrate resilience, even if recent price action appears weak in isolation.

We are likely seeing the tail end of a short squeeze unwind, which has contributed to the recent downside volatility. Liquidations appear to have largely run their course, with roughly US$500M of short positions flushed out. That said, whale holder distribution remains significant, with over US$37.5B sold since October 2025, suggesting underlying sentiment remains fragile.

Flows, while still positive, have shown clear sensitivity to macro developments. Net inflows currently stand at US$303M for the week, likely marking a fourth consecutive week of inflows following the prior five-week run of outflows. However, the intra-week dynamics tell a more nuanced story. The first two days of the week saw strong inflows of US$635M, but following the FOMC meeting, sentiment deteriorated, with two consecutive days of outflows totalling US$322M. While the week is still likely to close positive, the reversal highlights how quickly positioning can shift.

Macro has had increased dominance this week. The FOMC meeting delivered a clear hawkish pause. While there was no tightening, the Fed signalled a reduced willingness to ease, with energy linked inflation risks firmly in focus. The implication is that policy will remain restrictive until there is clear evidence forcing a shift.

Rate cut probability keeps falling

Markets responded decisively. Rate cut expectations have been materially repriced, with the probability of a June cut falling to just 1.9%. This shift in the rates outlook has weighed across asset classes and has not been supportive for digital assets.

Beyond macro, geopolitical risk remains an important overlay. Escalation in Iran-related tensions is likely to prove more structurally impactful than the recent short squeeze dynamics. Combined with still-negative funding rates, this suggests positioning remains cautious and that sentiment, while stabilising, has yet to turn decisively positive.