QCP: The current market rebound may be driven by genuine spot demand rather than leverage.

BlockBeats News, March 24th, QCP released its daily market observation, stating that the cryptocurrency market saw a mild rebound over the weekend, with Bitcoin (BTC) and Ethereum (ETH) breaking through the $85,000 and $2,000 thresholds, respectively. This recovery appears to have been led by the stock market, with stock futures showing a strong rebound.

While concerns about an economic recession still exist, Federal Open Market Committee (FOMC) Chair Powell's remarks at last week's meeting, although cautious, helped calm investor sentiment. The cryptocurrency fear and greed index improved from last week's 32% to 45% this week (49% being neutral), reflecting a general easing of risk aversion sentiment.

A significant highlight comes from inflows into spot Bitcoin ETF, which purchased 8,775 Bitcoins last week (equivalent to $7.44 billion), showing a significant increase. This marks a clear reversal after several weeks of net outflows, indicating that liquidity is starting to flow back into the early stages of the crypto market. With perpetual contract open interest (OI) still low and funding rates stable, this rebound appears to be driven by genuine spot demand rather than leverage, a key distinction, as leverage-driven rallies often see a sudden pullback upon liquidation.

“However, despite the reignition of ETF momentum and today's continued uptrend, we remain cautious about the prospects of a sustained breakout. The tariff escalation scheduled to take effect on April 2nd may once again pressure risk assets. Meanwhile, the options market reflects a more neutral wait-and-see attitude, with implied volatility trending downwards, and risk reversals across all tenors flattening, a stark contrast to the more pronounced bearish skew observed a week ago.

We will closely monitor whether this week's recovery will mirror last Monday's price action, where cryptocurrencies rose on Sunday but quickly retraced within 48 hours.”