Market Commentary

Geopolitics: The Strait of Hormuz Remains Closed

Operation Epic Fury enters its fourth week. Oil topped USD 103/bbl on Tuesday as U.S. allies remained reluctant to escort tankers through the Strait of Hormuz. Trump is struggling to build a coalition to reopen the Strait, keeping the geopolitical risk premium elevated. A cautiously positive signal emerged Monday when the first non-Iranian cargo tanker transited the Strait with its transponder active, though Iran continues retaliatory strikes on UAE, Israeli, and Qatari targets. Goldman Sachs has raised its 2026 inflation forecast by 0.8 percentage points to 2.9% and cut GDP growth by 0.3pp to 2.2%, assigning a 25% recession probability in the worst-case scenario.

Energy and Commodities

WTI closed Tuesday at ~USD 96.21/bbl (+2.9%) and Brent at ~USD 103.42/bbl (+3.2%), reversing a temporary Monday respite. The IEA authorized the release of 400 million barrels from strategic reserves — temporary relief, not a structural solution. Gold holds near USD 5,000/oz (range USD 4,999–5,025), consolidating after correcting from its all-time high of USD 5,589 set during the early-March Hormuz panic.

Equities and Volatility

U.S. equity markets posted back-to-back gains for the first time in weeks. The S&P 500 closed Tuesday at 6,716 (+0.25%) after a stronger Monday session (+1.01% to 6,699). The Nasdaq Composite finished at 22,479 (+0.47%). The Dow closed at 46,993 (+0.10%). The VIX dropped sharply from ~27 to the 22.75–23.50 range — its largest single-session decline in weeks. However, S&P futures retreated after Tuesday’s close, signaling pre-FOMC caution.

U.S. Macro — Key Data for the Week

The only notable data release so far was the NY Empire State Manufacturing Index, which surprised to the downside at -0.2 (vs. consensus +4.0 and prior 7.1) — the first negative reading of 2026. The 10-Year Treasury yield sits around 4.21%, slightly lower. The DXY retreated to the 99.63–99.80 range, pulling back from 10-month highs near 100.5 last week. The RBA (Australia) surprised with a 25bp hike to 4.10%, a signal that the global energy shock is forcing central bank action in some jurisdictions.

Bitcoin (BTC)

BTC opened the week strong, extending Week 11’s momentum. On Monday it rose ~4%, approaching the USD 75,000 level for the first time in six weeks. Tuesday’s Asian session saw an intraday high of USD 75,912, but the derivatives-led rally reversed quickly and BTC pulled back below USD 75,000, stabilizing at ~USD 74,300 by noon ET. The USD 74,564 level (38.2% Fibonacci retracement of the Oct-25/Feb-26 decline) and the USD 75,000 zone (USD 3,000MM short gamma identified last week by 10x Research) continue to act as resistance. Immediate support sits at USD 72,000–73,000 (50-day moving average). The advance marks four consecutive weeks of gains from the February lows (~USD 60,000).

Ethereum (ETH)

ETH was the strongest performer among the three, with a +13.3% seven-day advance. The ETH/BTC ratio broke out bullishly on Monday (+5% on the session), signaling institutional rotation toward the market’s second-largest asset. BlackRock’s staking ETF (ETHB) launch attracted significant flows in its first trading days, and BitMine Immersion Technologies’ corporate purchase (~60,999 ETH last week) reinforce the renewed institutional demand narrative. Structural resistance sits at USD 2,464.

Solana (SOL)

SOL advanced +6.74% on Monday, surpassing USD 91, before consolidating around USD 94 on Tuesday. The weekly range spans USD 88–96. SOL options began trading on Derive on March 16, expanding the asset’s derivatives ecosystem. The USD 96 level is key resistance; a daily close above it would open technical space toward USD 100–116.

Leverage Level: Moderate — Significant Short Squeeze

BTC experienced a rally that tested the USD 75,000 level in a significant short squeeze. Total liquidations reached ~USD 609MM, of which ~USD 486MM were short positions (80% of total). This dynamic was driven by the massive closure of USD 60,000 put options and market-maker delta hedging.

Aggregate BTC futures open interest sits at ~USD 23,300MM, having declined from its USD 24,290MM peak on March 4 despite rising prices — an OI/price divergence suggesting the rally is driven by spot buying and short covering rather than new leveraged longs. Paradoxically, this is a constructive signal: the advance is built on less leveraged foundations, reducing the risk of cascading liquidations.

BTC funding rates reached their lowest levels since early 2023, with 25 of the last 30 days recording negative funding. Rates have barely turned positive at +0.0017% per 8-hour interval.

Implied Volatility and Expiries

BTC DVOL is estimated in the 45–55% range. A critical liquidation corridor exists: USD 1,790MM in long positions clustered around USD 70,180 and USD 1,680MM in short positions near USD 77,211. The March 28 quarterly options expiry — Q1’s largest — approaches as a key volatility event.

BTC: The six-day inflow streak is the longest of 2026 and decisively reverses the five-week outflow stretch from January-February totaling ~USD 3,800MM. BlackRock’s IBIT captured 70% of Monday’s flow, consolidating its position as the dominant institutional vehicle. Three-week cumulative flows (Feb 24 – Mar 13) total approximately USD 2,100MM, with all-time BTC ETF inflows surpassing USD 56,100MM. The consistency of inflows — more than their magnitude — is the key signal: it indicates institutional capital remains in accumulation mode despite geopolitical uncertainty.

ETH: Monday showed a mixed pattern at the fund level: Fidelity’s FETH led inflows, while Grayscale’s ETHE and BlackRock’s ETHA recorded one-off outflows. The net positive of +USD 35.9MM marks the fifth consecutive inflow day. The prior week (Mar 9–13) closed at +USD 160.82MM — three consecutive weeks of positive flows, the best streak since October 2025. BlackRock’s staking ETF ETHB, launched March 12, opens a new pathway for institutional exposure with built-in yield; ETHA (pure spot) outflows may reflect internal rotation toward this new product.

SOL: Solana ETFs recorded net inflows of +USD 2.1MM on Monday. Flows are modest in magnitude but consistent: SOL ETFs have accumulated ~USD 34MM in inflows during the first half of March, maintaining over five consecutive weeks of positive flows. This persistence is notable given that the price has been declining for three months, signaling that institutional investors are accumulating at these levels with a medium-term horizon.