Two Key Indicators Suggest a Potential Bitcoin Price Surge by Quarter's End

By Omkar Godbole (All times ET unless specified otherwise) Following a two-day period of market stability, bitcoin briefly surpassed the $84,000 mark, topping its 200-day simple moving average. This was partly driven by Wednesday's softer-than-expected U.S. CPI release, which supported traders' expectations of four interest-rate cuts by the Federal Reserve this year. Over the past 24 hours, the memecoin sector led the recovery, followed by tokens from layer-1 and layer-2 blockchains, as well as AI tokens, according to data from Velo. Despite this, concerns such as President Trump's tariffs, U.S. recession fears, and bond-market volatility continue to cast a shadow on the market's recovery. However, two key factors suggest a potential upswing. The first factor is the upcoming quarter-end rebalancing. With the Nasdaq and S&P 500 down 6% and 4.8% respectively this quarter, and the 10-year Treasury note up 5%, funds are now overweight in bonds. As the quarter draws to a close, they are likely to rebalance by purchasing equities and selling bonds. This could lead to higher bond yields and stock prices, potentially benefiting bitcoin and the broader crypto market, given the strong correlation between BTC and tech stocks. The second factor is the yen, which has come under pressure. As CoinDesk previously noted, the potential for renewed crypto market stability could be supported by the yen's overstretched bullish positioning. The yen, seen as a safe-haven investment, may remain under pressure as quarter-end rebalancing lifts U.S. bond yields, potentially ending the risk-off sentiment and unwinding of yen carry trades. Additionally, increasing net global liquidity could support risk-taking. Two Prime, an SEC-registered investment adviser, stated in a Telegram chat, "Net global liquidity, driven by China and the U.S., is on the rise. This could counteract some effects of the yen trade's unwind. As the U.S. gains better control over its rates and inflation, which has been trending down over the past few months, it will reduce pressure on other central bank bonds and slow rate growth on yen borrow." However, traders should remain vigilant for potential volatility. Deribit's BTC-listed options market, tracked by Amberdata, shows significant negative dealer gamma between $81,000 and $87,000. Dealers may trade in the direction of the market to maintain their exposure, potentially amplifying price swings. The U.S. is set to release the February producer price index (PPI) report and weekly jobless claims later today. A higher-than-expected PPI could inject downside volatility into risk assets, so it's essential to stay alert. Key Events to Watch Token Events Conferences Token Talk By Shaurya Malwa Derivatives Positioning Market Movements: Bitcoin Stats: Technical Analysis Crypto Equities ETF Flows Spot BTC ETFs: Spot ETH ETFs Source: Farside Investors Overnight Flows Chart of the Day While You Were Sleeping In the Ether