ETH Touches $3k as Tailwinds Align, Ethena Launch Generates Both Fanfare and Concern

Equity markets are under pressure this morning, with the QQQ and SPX indices dropping over 1% and approximately 0.70%, respectively. This downturn occurs amidst a backdrop of a declining DXY and lower rates, underscoring a continued decoupling between risk assets and the bond market since early January. The crypto market is also experiencing a pullback, following Bitcoin’s premarket attempt to surpass the $53k mark and Ethereum’s notable weekend achievement of reaching the $3k level for the first time in nearly two years. This $ETH momentum is partly fueled by the growing anticipation of ETF approvals and the excitement over the forthcoming Dencun upgrade in mid-March. This fervor is reflected in the recent spike in OI on the CME, nearly back to all-time highs in ETH terms. Despite these developments, $BTC was rejected at the $53k threshold as the US market opened, and ETH has since retraced to around $2920. Layer 2 solutions such as $IMX, $OP, and $STX have retained some of their gains, outperforming the broader market this morning. Looking forward, the week appears light on significant macro data, though the market will receive the release of the FOMC’s meeting minutes on Wednesday, and many investors will be tuned into Nvidia’s earnings call on Wednesday for directional signals on the market and the broader economy.