Week 10

Welcome to the weekly UpCrypto Trading Newsletter.

Brief Overview

What does Week 10 bring?
This week, markets are focused on key employment data, including Nonfarm Payrolls, ADP Employment Change, and the Unemployment Rate. These will provide insights into the state of the labor market and could influence the Federal Reserve’s interest rate policy. Rising jobless claims and weaker payroll data could fuel expectations for earlier rate cuts, while stronger numbers may keep the Fed cautious.

Weekly Market Wrap:
Extreme fear continues to dominate markets after Bitcoin’s sharp correction and equities pulling back from recent highs. PCE inflation data came in as expected, leading to a slight increase in rate cut expectations for June. Meanwhile, tariff tensions and inflationary concerns remain central themes.

Earnings Highlights:
Key earnings this week include reports from Okta, GitLab, Marvell Technology, MongoDB, Broadcom, and Hewlett Packard Enterprise. These companies’ results could impact sentiment in the tech sector, which remains a major driver of the broader market.

What does week 10 bring?

Monday, March 3:

• ISM Manufacturing Index
  Expected at 50.8, a key indicator for industrial activity.

• Earnings Reports
  Okta Inc. (OKTA), GitLab Inc. (GTLB)

Tuesday, March 4:

• No major economic reports.

• Earnings Reports
  Sea Ltd. (SE), Box Inc. (BOX)

Wednesday, March 5:

• ADP Employment Change
  Expected at 140K, down from 183K – could indicate a slowing labor market.

• Factory Orders
  A critical measure of business spending.

• ISM Services Index
  Expected at 53, showing continued expansion in the services sector.

• Earnings Reports
  Marvell Technology Group Inc. (MRVL), Veeva Systems Inc. (VEEV), Zscaler Inc. (ZS), MongoDB Inc. (MDB)

Thursday, March 6:

• Initial Jobless Claims
  Expected at 340K, up from last week's 242K – a significant jump, which could signal rising unemployment.

• Earnings Reports
  Broadcom Inc. (AVGO), Hewlett Packard Enterprise Co. (HPE), Samsara Inc. (IOT)

Friday, March 7:

• Nonfarm Payrolls
  Expected at 133K, down from 143K, which could point to a cooling labor market.

• Unemployment Rate
  Expected at 4.0% – a rise could push the Fed toward earlier rate cuts.

• Earnings Reports
  No major tech earnings.

Weekly Market Wrap

Markets continued their downward trend last week as economic uncertainty, tariff tensions, and extreme fear in the crypto sector drove volatility.

Key Developments:

• US Consumer Confidence declined – The index fell to 98.3, well below expectations of 102.5, signaling growing economic uncertainty. While this could be bullish for risk assets in the mid-term if inflation cools, a sharp loss of confidence may dampen risk appetite further.

• Bitcoin Fear & Greed Index hit 10 – This extreme fear level, last seen in June 2022, suggests that the market is oversold. However, in 2021, a similar drop was followed by a dead cat bounce before a deeper correction.

• Higher Initial Jobless Claims – Claims rose to 242K last week, higher than the 221K expected, suggesting the labor market is softening. If this trend continues, the Fed may have to cut rates sooner.

• US GDP met expectations at 2.3% – A slowdown from 3.1% in the previous quarter, confirming that economic growth is moderating but still resilient.

PCE Inflation Data (2.5%) was in line with expectations and marked the first decline in inflation momentum since September. Markets breathed a slight sigh of relief, with expectations for a June rate cut increasing.

Meanwhile, market liquidations surged, with $825M in long positions wiped out in 24 hours. This suggests traders attempted to catch the bottom too early, which led to forced selling.

Crypto and Market Outlook for Week 10

This week will be pivotal as the US labor market comes into focus. Weaker job data could reinforce rate cut expectations, while strong numbers may delay any policy shift.

What to watch:

• Nonfarm Payrolls (Friday) – A lower-than-expected number could drive Fed dovishness, while a surprise upside would delay cuts.

• Unemployment Rate (Friday) – If it rises above 4%, it could accelerate rate cut bets.

• Initial Jobless Claims (Thursday) – Expected to jump significantly – could this be the first real sign of labor market weakness?

Bitcoin and Market Sentiment:

• Bitcoin remains highly volatile – Last week’s extreme liquidations suggest a possible local bottom, but caution remains as macro uncertainties persist.

• Fed speakers & rate cut expectations – If market participants see weaker employment data, expectations for a June cut could strengthen, potentially benefiting risk assets like tech stocks and Bitcoin.

Key Themes:

• Tech stocks remain a driver – The Nasdaq has struggled since Powell’s hawkish stance in December, and we are still not seeing clear bullish momentum.

• Geopolitical risk remains – Tariff tensions continue to fuel inflation expectations, making the Fed’s decision-making process even more complex.

Conclusion

This week, job market data will take center stage. A weaker-than-expected labor report could fuel expectations for earlier rate cuts, while strong numbers could reinforce the "higher for longer" narrative.

Bitcoin and risk assets remain in a critical phase. With sentiment at extreme fear levels, the potential for a short-term bounce is increasing, but macro headwinds still dominate.

Key Takeaways:

• All eyes on employment data – Nonfarm Payrolls and jobless claims will set the tone for rate expectations.

• Rate cut expectations increasing – PCE data fueled June cut bets, but labor market resilience could challenge this view.

• Bitcoin’s critical phase – Extreme fear could indicate a short-term bottom, but further downside is still possible.

• Tech sector remains under pressure – Earnings from Broadcom, Marvell, and MongoDB could impact sentiment this week.

Markets remain fragile and volatile. Stay disciplined, manage risk, and keep an eye on key data points.

Here's to a successful week, and stay tuned for more weekly outlooks on the crypto and financial markets.

Best regards,
your UpCrypto Team!

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