QCP: It is expected that the Federal Reserve will keep interest rates unchanged this week, and market volatility will remain at a higher level

On March 17, QCP released a daily market observation stating that over the weekend, a BTC whale opened a $400 million short position in BTC. This caused market fluctuations on Sunday as some groups tried to liquidate this 40x leveraged position, which would only require a 2.5% price change. Despite these efforts, the position has not been liquidated and has already paid nearly $400,000 in funding fees. Currently, the cryptocurrency fear and greed index is at 32 (fear), reflecting ongoing risk aversion sentiment especially against the backdrop of overall pessimistic stock market sentiment. This further reinforces BTC's role as a macro hedging tool. Despite volatile market sentiments, BTC still holds above $80,000 showing resilience compared to US stocks.

In contrast, U.S stock index futures opened lower this morning due to rising concerns about economic recession. Previously U.S Treasury Secretary Scott Bessent stated that we cannot rule out the possibility of an economic recession which aligns with Trump's previous statements. The focus will be on tonight's release of U.S retail sales data to determine whether January’s 0.9% decline in retail sales is an early sign of slowing consumer spending or just an adjustment after the holiday shopping season in 2024 . As there is currently no strong narrative driving crypto markets , attention remains focused on US stocks . Last week , US CPI data was below expectations , temporarily easing market tensions but it’s unlikely for Fed to turn dovish anytime soon given tariff risks and inflation worries persisting hence interest rate cut expectations remain unclear .

Therefore , we expect Federal Reserve will keep interest rates unchanged at FOMC meeting this Wednesday . However , since markets are looking for any clues regarding future policy direction from Fed particularly under uncertainty surrounding Trump 's policy changes , volatility is expected to remain high.