The crypto market has been resilient amid the Iran escalations, at least for now.
However, Fundstrat’s Tom Lee expects March to be net positive for risk assets.
In a CNBC interview, Lee said,
“The worst of the sell-off is going to happen this week. I would 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 stock market recovery. He added,
“We understand war headlines make investors nervous, but we expect stocks to be up in March: led by MAG7, software $IGV, and crypto $BTC $ETH.”
For Lee, the crypto and MAG7 (tech) had prior weakness and maybe were in the final bottoming stage, adding that it could lead to an ‘up April.’
Bitcoin vs. Iran escalations
Despite Lee’s optimistic outlook, other analysts appeared cautious in the near term.
In its daily market update, Singapore-based trading desk QCP Capital noted a positive Options positioning but remained somewhat defensive.
“Despite the larger scale versus last June’s strike, price action is not flashing panic. Saturday flows included 1,000x BTC-27MAR26-74k-C and 4,000x BTC-27MAR26-75k-C, suggesting some are positioning for a March rebound after five consecutive down months.”
This meant some sophisticated players were betting on a sustained BTC price move to $74K-$75K in March. However, QCP analysts warned,
“We remain cautious. The key is whether the conflict stays contained, with escalation pathways and maritime stability in focus, particularly the Strait of Hormuz.”
At the time of writing, the market was pricing a potential hawkish rate cut pause ahead of the Fed meeting on the 18th of March, especially if the Iran escalations persist and affect oil prices and inflation.
This could dent risk sentiment and cap the expected market recovery.
From a seasonal perspective, BTC has had 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 data.
Unsurprisingly, the Options market was mixed ahead of quarterly expiry. According to Bitfinex analysts,
“Near-term skew remains defensive, with strong demand for downside protection, while quarterly positioning into late March shows a pronounced call bias clustered around $80,000–$90,000.”
At press time, BTC traded at $68K after retesting $70K on Monday, thanks to strong spot US BTC ETF buying.
On the other hand, ETH was still tightly consolidating between $1.8K and $2.0K. Solana [SOL] and XRP were also stuck in a sideways structure above $80 and $1.3, respectively.
Final Summary
- Tom Lee shrugged off the Iran escalations, projecting that the crypto market could rally in March and extend the gains into April.
- Option market positioning echoed Lee’s stance, but QCP urged near-term caution.
