Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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Topics covered:

• Friday's Jobs Report.
• Closing of the Strait Pushes Oil Prices Higher.
• Bitcoin Breaks Out Driven By Strong Spot Buying.
• Cryptonary's Take.

Friday's Jobs Report

The attention and focus of markets is currently on the war between the US/Israel and Iran, rather than on tomorrow's jobs report.

Estimates for tomorrow's jobs report are for the Unemployment Rate to come in unchanged at 4.3%, and for Payrolls to show 59k jobs added.

Should these prints come in as estimated, the market would likely take that positively, even though it doesn't aid the argument for cuts, and it actually pushes rate cuts further out. The risk to markets would be if we saw weaker numbers, i.e., an increase in the Unemployment Rate, and lower jobs growth. Markets wouldn't like this as it would signal a potentially weaker labour market, whilst inflationary pressures are likely to come alongside this with the rise in oil prices due to the conflict in the Middle East.

Ultimately, markets will be looking for the numbers to come in line with estimates, with the focus then quickly shifting back to the Middle East war.

Closing of the Strait Pushes Oil Prices Higher

Whilst the onslaught from US and Israeli forces continues on Iran, the Iranians have mostly targeted Israeli military bases and cities, US military bases and consulates in the region, whilst the UAE has also been subject to heavy strikes, which have mostly been intercepted.

Alongside military targets and cities, the Iranians have targeted the Strait of Hormuz, which is now effectively shut. It's not, it's open, but ships are at considerable risk of being struck by an Iranian drone should they try to pass through. This has resulted in Maersk pulling back its ships, with insurers refusing to insure ships attempting to pass through the Strait. This is extremely problematic as nearly 20% of the world's oil flows through this Strait each day. Already, we've seen:

• Qatar is shutting down its LNG liquefaction at the Ras Laffan plant, halting all exports. This is one-fifth of the global LNG supply.
• China has told top refiners to halt diesel and gasoline exports, hoarding for themselves.
• Iraqi producers DNO, Gulf Keystone and Dana Gas have halted output as a safety measure. This removes 3m barrels of oil per day.
• Saudi Arabia's Ras Tanura oil refinery has also been targeted, although production has continued.

This has resulted in the price of Brent Crude Oil moving up to $83. Note, the price of Brent Crude Oil was at $60 back in early January.

Brent Crude Oil 1D Chart

There have been news reports of Iranian intelligence reaching out to intermediaries looking to negotiate with the US regarding ending the war; however, that has been denied from the Iranian's side, whilst the US and Israelis have maintained their willingness to continue with the war.

So, assuming the war continues, and we don't see any viable off-ramps in the near-term, it's likely the Strait of Hormuz will remain closed, as the Iranians can use drone attacks, and only several are needed to stop vessels passing through. Disrupting the transportation of oil through the Strait is perhaps one of Iran's greatest weapons. The reason is the inflationary impact that'll be felt should the price of oil continue to rise. Should the Strait remain closed, Brent Crude would likely move up to $100.

The impact of this would be increased inflation in the US and throughout the world, and this would directly go against the Trump administration's plans to lower inflation, in order for the Fed to reduce interest rates.

A new bout of inflation that sees interest rate cuts pushed out until Q3 at the earliest, is one of the worst outcomes for the Trump administration, and going into the mid-terms in November, it is likely be the case that Republicans will lose those mid-terms.

Currently, the next interest rate cut is priced for the September meeting. The July meeting is priced at a 51.5% chance that the Fed will remain on hold, although these odds are rising. Just a week ago (before the conflict broke out), the market was pricing for a cut in July, with the Fed remaining on hold, price at 33.4%. So, the odds of the Fed remaining on pause through July have increased significantly, and the longer the conflict lasts, and the longer the Strait remains 'closed', the more likely cuts are going to continue to be priced out. This is unsupportive for risk assets.

Ultimately, the longer the conflict in the Middle East lasts, the worse it is for inflation. The Trump administration has guaranteed safety for the vessels passing through, but it's still up to those vessels to make the journey, and currently, they're not willing to.

Target Rate Probabilities for 29 July 2026 Fed Meeting

Bitcoin Breaks Out Driven By Strong Spot Buying

Yesterday (Wednesday 4th March), Bitcoin convincingly broke out of its $71k-$72k resistance, with price touching $74k, before pulling back to test the $71k-$72k zone as new support.

Price was driven higher on strong Spot buying via the ETFs, whilst Shorts were liquidated.

Bitcoin ETF Flows

Short liquidations have been dominant on the price breakout of $72k.

Short Liquidations Dominate

This comes as sentiment has been extremely negative, and this has been reflected in positioning. Funding Rates have remained negative over the last month, if not more skewed to being negative, indicating that leverage traders are paying a premium to be Short. Meanwhile, the Fear & Greed index has been at extreme fear levels, and traders have bought up protection. This is shown in a rising Put/Call ratio. A rising Put/Call ratio shows that traders are fearful of downside and are therefore buying Puts to protect against their portfolio falling in value. When the Put/Call Ratio reaches extreme highs, this can indicate a local low or a major low in prices.

Neutral-to-Negative Funding Rates

Rising Put/Call Ratio

The oversold levels, the poor sentiment, and the fear of further downside have led the market to be overly positioned for further downside, which has resulted in price moving in the opposite direction - as it usually does when the market is overly positioned in a particular direction.

But, with liquidity in markets not at sufficient levels to stimulate risk assets, and with the conflict in the Middle East likely to result in higher inflation over the coming months, this pushes out Fed cuts. This is unsupportive for risk assets, and therefore, the data suggests to us that more likely than not, this move higher in price is likely to be a relief rally.

In terms of resistance levels for price, there are a few:

• True Market Mean Price = $78k
• IBIT Cost Basis = $80k
• ETF Cost Basis = $82k
• Technical Resistance = $80k-$84k
• STH Cost Basis = $86k

Key Cost Basis Models

In terms of identifying a range, we'd be looking at the $78k-$84k zone as being the major resistance zone, and we expect price to reject there, should price even make it there - this will be dependent on continued positive Spot flows.

Cryptonary's Take

Bitcoin has broken out of its key horizontal resistance at $72k, driven by positive Spot buying that has resulted in Short liquidations. The conditions are there for Bitcoin to continue moving higher, but it is dependent on the flows to continue being supportive, whilst a resolution in the conflict in the Middle East would aid this.

However, when assessing the macro backdrop - likely higher inflation to come, pushing Fed rate cuts out further, and for the conflict in the Middle East to likely be multi-week - the upcoming environment isn't supportive for risk assets. With that in mind, there's still upside for Bitcoin in the immediate term, but we expect the price to reject into the $78k-$84k zone. The $78k-$84k zone would be an optimal zone to de-risk at.

Our view remains the same that we expect Bitcoin to bottom between $50k-$60k in the coming months.

Key Dates Ahead

• Mar 6: US Nonfarm Payrolls + Unemployment
• Mar 11: CPI
• Mar 17–18: FOMC meeting

This content is for informational and educational purposes only. Cryptonary is not authorised or regulated by the Financial Conduct Authority (FCA) or any other financial regulatory body. Nothing in this publication constitutes a personal recommendation or advice to buy, sell, or hold any virtual asset. Virtual assets may lose their value in full or in part and are subject to extreme volatility. You can lose all invested amounts and do not benefit from any form of financial protection. Past performance does not indicate future results.