Market update | March 20th, 2026
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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.
