Friday, 3 April: US Non-farm Payrolls (NFP)
US March employment data is expected to show growth of between 40-85,000 jobs, with consensus sitting at 60,000. It will mark a welcome relief from February, which was negative 92,000, a sharp miss against the consensus expectation of positive 60,000, and was one of the worst prints relative to the previous four readings. We’re inclined to treat the February figure as an outlier.
For crypto markets, the reaction matrix isn’t simple. An upward correction in jobs data could bring some confidence back to risk assets broadly, but a second consecutive negative number, could change the outlook significantly. It would raise expectations of a rate cut, historically a net positive for longer-term cryptocurrency inflows, but it could also stoke recession fears. We see the probability of recession as low, given the capital expenditure and R&D spending by top S&P 500 companies, further bolstered by government expenditure. We’ll watch whether the market reads weakness as a buying opportunity or as a signal to de-risk entirely.
Thursday, 9 April: US Personal Consumption Expenditures (PCE) Price Index
This is the Federal Reserve’s preferred inflation metric, and it lands roughly a week before the Federal Open Market Committee (FOMC) blackout period begins on 18 April. The most recent numbers came in well above the Fed’s two percent target. Given the ongoing energy price pressure from the Middle East conflict and persistent services inflation, we expect these readings to remain elevated or drift higher as the data begins to capture rising fuel costs. Rising fuel costs make everything else more expensive, without exception.
If inflation stays above target for longer, expectations of a rate cut diminish further. In that environment, bonds become more attractive on a relative yield basis, and the risk-to-reward calculus shifts against speculative assets such as crypto. Investors facing higher rates and increased macro uncertainty tend to widen their allocation horizon, choosing to rotate towards safer instruments or diversifying across asset classes where the return is more certain.
Friday, 10 April: US Consumer Price Index (CPI)
The February number came in at 2.4 percent year-on-year on the headline, mostly driven by shelter, food, and energy costs, keeping the prospect of a near-term rate cut suppressed. Given the ongoing Middle East conflict and elevated oil prices, we expect CPI to trend higher as the March and April data begin to capture this pressure. A rapid end to the conflict could paint a different picture, but that seems unlikely right now.
Higher-than-expected CPI, accompanied by the PCE reading the day before, would reinforce the no-cut narrative.
28-29 April: FOMC Rate Decision
The FOMC meets on 28-29 April. The market clearly expects no change, and the only thing traders will pay close attention to is the tone of officials in the press conference and what it signals about the timing of a future cut.
On-chain Metrics
How We Know We Aren’t Overvalued
The Market Value to Realised Value (MVRV) ratio currently sits somewhere between 1.2 and 1.8, but either way it remains far below the 3.5-4.0 zone that has historically marked cycle tops. We aren’t in overvaluation territory. The MVRV Z-Score has compressed sharply from the cycle peak of 3.8, confirming that the speculative froth has been wrung out of the market.
Where the pain shows up more clearly is in the 365-day MVRV, which isolates the cost basis of buyers within the last year. That metric sits at roughly negative 28.5 percent, meaning the average buyer over the past 12 months is sitting on unrealised losses of nearly a third. That level of pain among recent buyers is comparable to what we saw during the 2022 bear market. The overall MVRV, however, remains above 1.0, which tells us the broader holder base is still modestly in profit.
In short, this is a correction, not a capitulation, and certainly not overvaluation. We estimate that more than 60 percent of supply remains in profit.
Exchange Reserves
Exchange-held bitcoin (BTC) has fallen to 5.88 percent of total supply, a seven-year low. Coins are likely moving into long-term storage and exchange-traded fund (ETF) custody rather than sitting on order books for sale. The stablecoin market capitalisation of $316 billion is also at an all-time high (ATH). The correlation isn’t perfect, but this also points to the dry powder available for re-entry. It signals a long-term belief in cryptocurrency amongst holders.