The crypto market has proven resilient during the escalations in Iran, at least for now.
However, Fundstrat’s Tom Lee expects March to be net positive for risky assets.
In a CNBC interview, Lee said said,
“The worst of the sell-off will occur this week. I expect March to be an ‘up month’ for the stock market.”
In a separate social media post, Lee reiterated that crypto could also benefit from the potential recovery of the stock market. He added,
“We understand war headlines are making investors nervous, but we expect stocks to rise in March: led by MAG7, software $IGV and crypto $BTC $ETH.”
For Lee, crypto and MAG7 (tech) saw previous weakness and may be in the final lows, adding that this could lead to an ‘up April’.
Bitcoin vs Iran escalations
Despite Lee’s optimistic outlook, other analysts appeared cautious in the near term.
Singapore-based trading desk QCP Capital reports in its daily market update noted a positive positioning in Options, but remained somewhat defensive.
“Despite the larger scale relative to last June’s strike, the price action is not panic. Saturday’s flows include 1,000x BTC-27MAR26-74k-C and 4,000x BTC-27MAR26-75k-C, suggesting some are positioning for a recovery in March after five straight down months.”
This meant that some advanced players were betting on a continued BTC price increase to $74,000-$75,000 in March. However, QCP analysts warned:
“We remain cautious. The key is whether the conflict remains under control, with escalation pathways and maritime stability in focus, especially the Strait of Hormuz.”
At the time of writing, the market was prices a potential aggressive rate cut is being paused ahead of the Fed’s March 18 meeting, especially if escalations in Iran continue and impact oil prices and inflation.
This could affect risk sentiment and hinder the expected market recovery.
From a seasonal perspective, BTC has achieved an average monthly return of 11.5% in March since 2013. But whether this month will be red or green is 50/50, per historical perspective. facts.
Source: Coinglass
Not surprisingly, the options market was mixed ahead of the quarterly expiration. According to Bitfinex analysts,
“Short-term skew remains defensive, with strong demand for downside protection, while quarterly positioning through the end of March shows a pronounced call bias around $80,000 – $90,000.”
At the time of writing, BTC was trading at $68,000 after testing $70,000 again on Monday, thanks to the strong US BTC ETF buy.
On the other hand, ETH still consolidated firmly between $1.8K and $2.0K. Solana [SOL] and XRP were also stuck in a sideways structure above USD 80 and USD 1.3 respectively.
Final summary
- Tom Lee shrugged off the escalations in Iran and predicted that the crypto market could rebound in March and extend gains into April.
- Positioning in the options market reflected Lee’s view, but QCP urged caution in the near term.