BTC has continued to rise from the low of $81,500 last night, and after the Feds interest rate decision meeting in the early morning, it touched $87,000 again this morning. The panic seems to have slowly subsided, and the market is slowly passing the lowest point. In the past 24 hours, a total of 101,662 people were liquidated worldwide, with a total liquidation amount of $353 million, mainly short orders. BlockBeats collected some community members views on the market rise and summarized three reasons for the rise.
The Fed turns dovish: The liquidity floodgates open
The monetary policy of the Federal Reserve plays a key role in the crypto market. On March 20, the Fed decided to keep interest rates unchanged at 4.25-4.50% and sent a dovish signal, suggesting that interest rates may be cut later this year due to slowing inflation data and growing concerns about economic growth. In line with market expectations. At the same time, it announced a significant slowdown in the pace of balance sheet reduction QT to ease market liquidity pressure. Fed Chairman Powell reassured investors that the risk of recession is not high, the US economy is still strong, and the job market is still solid.
The dovish Fed has reduced the opportunity cost of holding non-yielding assets, driving funds from low-yielding bonds to risky assets. Todays rally may reflect institutional investors and ETF providers reallocating funds to Bitcoin in anticipation of looser monetary conditions. As liquidity poured into the market, Bitcoin prices broke through resistance, triggering FOMO among investors.
In fact, institutional bullish sentiment seems to have returned, with BlackRock showing renewed confidence in BTC despite Bitcoin’s 11.4% drop over the past 30 days. The world’s largest asset manager recently added 2,660 bitcoins to its iShares Bitcoin Trust, IBIT, the fund’s largest inflow in the past six weeks. After a period of uncertainty in IBIT flows since early February, this significant purchase suggests that institutions are once again positioning for a potential upside as market conditions develop.
Market analyst IncomeSharks believes that Bitcoin rebounded at the super trend support level and still maintains a buy signal. Looking back at BTCs performance at the OBV On-Balance Volume resistance level and the diagonal resistance level, the follow-up at the arrow is an obvious strong bullish signal.
Note: OBV is a technical analysis indicator that predicts changes in stock or cryptocurrency prices by using volume flow. OBV increases volume on days when prices are rising and decreases volume on days when prices are falling, thus forming an accumulation line that reflects buying and selling pressure. Investors pay more attention to volume-based indicators during times of increased institutional activity and market volatility.
Arthur Hayes also posted on social media that Powell has stated that quantitative tightening (QT) will basically end on April 1. The market needs a real bullish signal next, either an exemption from the supplementary leverage ratio (SLR) or a restart of quantitative easing (QE). Bitcoins $77,000 is likely to be the bottom.
RSI is oversold, fear sentiment is declining
As of March 2025, Bitcoin futures funding rates have remained negative for several months, indicating that leveraged traders are bearish, but this also creates a potential springboard for a rally. Negative funding rates mean that short holders pay longs, which usually occurs during falling prices or oversold conditions.
As panic has declined in recent days, Bitcoin is emerging from a panic-driven consolidation, driven by stable gold prices, reduced trade war concerns, and Trumps friendly signals towards cryptocurrencies. Historical data shows that negative funding rates often predict rising price dynamics. Todays gains may be the result of longs accumulating at these discounted prices, and prices are pushed higher as panic subsides and optimism returns.
Trader MerlijnTrader believes that a Bitcoin rebound is imminent, pointing out that the RSI indicator is oversold and that Bitcoin has just hit an important bottom signal. Historically, every time this signal appears, BTC will rebound strongly.
Global M2 continues to rise: inflation hedging becomes more attractive
At the beginning of 2025, global M2 has been rising steadily due to coordinated easing policies from the Federal Reserve, the European Central Bank, etc. This expansion, driven by low interest rates and bond purchases, reflects the environment in which Bitcoin has emerged as a hedge against fiat currency depreciation.
As global liquidity increases, Bitcoins limited supply becomes more attractive as a store of value, especially as concerns about the hegemony of the US dollar and Trumps tariff policy arise. Bitcoin is theoretically able to offset the erosion of asset value by inflation, and todays gains may reflect institutional and retail investors pouring into BTC as a hedge against rising M2, pushing prices toward new highs.
Analyst Crypto Raven hiRavenCrypto believes that the comparison between M2 and BTC price is usually proportional. But there has been a gap recently, indicating that BTC price has not caught up with M2. This means that $BTC price is about to surge, and it may reach at least 100K.
Despite the lingering uncertainty, as the Fed releases dovish signals, the current market has shown obvious bottom characteristics: institutional return, oversold RSI, negative funding rate and technical indicators bottoming out. Large institutions such as BlackRock are actively increasing their holdings, and more government agencies (Arizona passed two more BTC reserves yesterday) are beginning to consider Bitcoin reserves, and market confidence is returning.
