he Asia crypto trading session on March 25th saw positive momentum for major cryptocurrencies like Bitcoin and Ether. BTC rose nearly 5% to trade around $67,000 while ETH gained over 4.5% to surpass $3,400. This uptick came as central banks implemented dovish policies that could buoy risk assets.
Most notably, the Swiss National Bank shocked markets the prior week by cutting its policy rate. As the first major central bank to move, the SNB signaled the beginning of a global easing cycle. Soon after, Mexico's central bank followed suit with its own rate cut. Comments from the US Federal Reserve, European Central Bank, and Bank of England laid the groundwork for forthcoming liquidity injections as well.
The coordinated monetary easing sparked optimism that easy money policies could support equities, real estate, gold, and cryptocurrency prices moving forward. As one fund manager observed, stocks and gold had recently reached all-time highs in line with this onset of looser financial conditions around the world. Central bank actions appeared to be a prime catalyst for the crypto market's gains at the outset of the March 25th session in Asia.
BlackRock Makes a Move
Another development-boosting crypto sentiment was BlackRock's foray into blockchain-based products. The world's largest asset manager is targeting the tokenized assets space with a new fund focused on building on Ethereum.
Dubbed "BUIDL", the fund intends to invest in projects developing decentralized protocols, applications, and markets. It represented a major acknowledgement of credibility for the crypto industry given BlackRock's dominance in traditional finance. Market players cheered the institutional adoption, with one analyst attributing it to helping digest the gains seen that day.
Short Liquidations
As Bitcoin and Ether prices rose, short traders faced mounting losses. Data from analytics platform CoinGlass showed over $100 million in leveraged futures positions getting liquidated in the prior 24 hours. Around $60 million of those losses fell upon short BTC positions, with $42.8 million from short ETH trades closing out as well.
The uptick in short squeezes suggested increasing bearish bets had contributed additive buying pressure as shorts rushed to cover failing positions. It underscored how sentiment could turn swiftly from doubt to optimism on unexpected positive developments in the crypto sector.
Remaining uncertainties
While macro factors aligned favorably for crypto with easing rates and institutional moves, key risks still loomed. Regulatory clarity absence in most jurisdictions posed ongoing challenges. Economic uncertainties from high inflation and spiking energy costs also raised questions about the strength and sustainability of any recovery in risk assets.
Crypto volatility also meant priced could just as easily fall back down as rise further. The market had yet to undergo needed corrections after substantial runs in 2021-early 2022. Overall sentiment therefore remained cautious despite the day's upswings in Bitcoin, Ether and other major cryptocurrencies to kick off the week.
