According to most analysts, there are still no structural factors supporting a sustained recovery in the sector, and the recent price increase is seen largely as a technical correction. Some experts warn about the possible formation of a so-called “bull trap,” similar to the situation observed in January. At that time, the temporary recovery was interpreted by investors as the beginning of a new bullish cycle, encouraging them to open long positions, but the market subsequently reversed sharply downward. Overall, medium-term fundamentals remain negative for the crypto industry.

Geopolitical tensions in the Middle East continue to escalate and may enter a prolonged phase. While the Pentagon initially expected the military operation to last only several weeks, sources cited by Politico now suggest it could continue for at least 100 days. This significantly increases the risk of a global economic slowdown due to rising energy prices, which have already climbed by more than 5.0%. As a result, traders are shifting capital into safe-haven assets while reducing exposure to riskier assets such as cryptocurrencies.

At the same time, the US dollar is receiving additional support because the Federal Reserve may keep interest rates elevated for longer or even raise them if inflation accelerates further. Recent comments from Fed officials suggest a pause in policy adjustments while authorities assess the economic consequences of tensions in the Persian Gulf. Even before the escalation of hostilities, the US labor market remained resilient: unemployment declined from 4.4% to 4.3% in January, while consumer price inflation stood at 2.4% and producer prices at 2.9%, both above the target level.

Later today at 15:30 (GMT+2), new employment data for February will be released. If the report confirms further job growth and stable unemployment, the likelihood that the Federal Reserve will keep monetary policy unchanged in March will increase significantly, putting additional pressure on assets that compete with the US dollar.

Some analysts, including BitMEX co-founder Arthur Hayes, have suggested that the Fed could expand the money supply to support government spending, similar to previous geopolitical crises in the Middle East. However, amid tensions between the Republican administration and monetary authorities, such a scenario currently appears less likely.

Among the positive developments for the cryptocurrency sector is renewed momentum around the proposed US crypto market structure bill known as CLARITY, which has received support from Donald Trump. In a post on Truth Social, Trump called for the rapid adoption of the legislation, arguing that it is essential for the development of the crypto industry in the United States. He also criticized banks opposing the initiative, which fear deposit outflows if digital exchanges are allowed to offer yields on stablecoins. Presidential support has increased expectations that the bill could be approved by the summer, potentially attracting new institutional investment into the market.

Meanwhile, the US Securities and Exchange Commission (SEC) has reached a settlement with Tron and its founder Justin Sun in a case related to alleged securities law violations. The agreement requires Rainberry Inc., a company associated with the Tron project, to pay a $10 million fine, while claims against Sun, the Tron Foundation, and the BitTorrent Foundation will be dismissed.

In addition, the institutional platform Ripple Prime, which manages assets worth about $3 trillion, now allows clients to clear cryptocurrency futures on the Coinbase exchange. These include BTC, SOL, ETH, and XRP contracts available for trading around the clock.

Overall, conditions in the digital asset market remain challenging. According to SoSoValue, over the past four months Bitcoin-based funds have recorded outflows totaling $6.39 billion — the longest losing streak since these instruments were launched. The Crypto Fear and Greed Index has improved slightly to 18 but still remains firmly in the “extreme fear” zone.

Under such conditions, most crypto assets may continue consolidating or resume their decline in the coming week.