Our experts analyzed situation on the crypto market and told how the price of Bitcoin can change

The week of March 25-31 was relatively quiet. The following key factors influenced the crypto market. This is the dynamics of the U.S. dollar, stock indices and futures on them. As well as data on inflation in the U.S., measured by the PCE index, as well as the speech of the head of the Federal Reserve Jerome Powell. News about the accusations against the KuCoin exchange caused concerns and led to a massive outflow of funds from the platform. But it did not have a strong impact on the market either and Bitcoin.

Last week’s analysis

On March 25, bitcoin showed a strong growth of 3.97% and closed at $69,880 per coin. This rise occurred after the bulls were able to overcome an important resistance level at $65,430 on Sunday. And that marked the break of the local downtrend.

On March 26, the BTC/USDT pair rose 0.15% to $69,988, hitting an intraday high of $71,561. Buyers took a pause, retreating to $69,280.

March 27 saw increased volatility. The BTC/USDT pair fell 0.74% to $69,469 after a failed attempt to break above $71,769. The price slipped 5% to $68,359, but did not go below this level.

On March 28, the BTC/USDT pair rose 1.89% to $70,780. The price touched $71,500 three times. But it failed to move higher because of the S&P 500 futures drawdown before the close of trading.

On March 29, trading on the BTC/USDT pair ended with a 1.31% decline to $69,850. Despite the buyers’ attempts to develop upward dynamics, they failed to hold the gained positions. During the U.S. session, the bitcoin rate fell to $69,000.

As on this day the exchanges of the USA and Europe were closed due to Easter holidays. The cryptocurrency market was deprived of the guidelines set by traditional markets. The pressure on prices could be exerted by the published data on inflation in the United States. As well as the speech of the Chairman of the Federal Reserve Jerome Powell.

By the time the trading closed, the bitcoin price recovered to $69,850. And remaining within a four-day sideways trend with a range of $68,350 – $71,550 (the maximum of the week was $71,769).

U.S. inflation data and a speech by Federal Reserve Chairman Jerome Powell

According to the released figures, inflation in the US, as measured by the change in the price index of personal consumption expenditures (PCE). And rose to 2.5% year-on-year in February. The core PCE price index also showed an increase. These data were in line with expectations. However, they did appear to have put some pressure on the market. As traditional exchanges were down, it was mostly bitcoin that reacted.

Rising inflation and Jerome Powell’s words about the need to keep rates high could mean the following. That the Federal Reserve will be cautious about changing rates. Market conditions and new employment data will be key factors for future Fed decisions between April 1 and April 7.

Important events expected this week and possible BTC price changes

This week will be full of publication of important macroeconomic indicators. Therefore, we should expect increased volatility in all markets. On April 3, Jerome Powell will make another speech.

Currently, bitcoin is in a sideways with a range of about 5% or $3450. The technical picture remains on the side of buyers. The only potential negative factor could be the strengthening of the dollar after the long weekend.
Possible technical resistance levels could be $72,650 and $73,800. According to BitRiver estimates, on the sellers’ side, $65,800 and $60,800 levels are the targets.

Our experts note that issuers of nine new spot bitcoin-ETFs. Which were launched on January 11, currently own more than 500 thousand BTC worth $35.2 billion at the current exchange rate. The first place by number of coins in the vault is occupied by BlackRock with about 250 thousand BTC. And in second place is Fidelity with about 150k BTC, and the top three is rounded out by Bitwise with 50k BTC. Before the upcoming halving, the demand for bitcoin remains high. And therefore, the support from institutional investors will remain for a long time.

Open interest in BTC futures close to record high in November 2021

Open Interest (Open Interest) futures trading on bitcoin (BTC) exceeded $21 billion. And is approaching the record of $24 billion, recorded in mid-November 2021. And when bitcoin cost $65 thousand, writes CoinDesk with reference to data from the analytical service Coinglass.

In traditional trading under the open interest (Open Interest) is understood as the total number of purchase orders. Which are available at the time of market opening. In futures and options trading, Open Interest is the total number of contracts outstanding at a given point in time. This includes futures contracts that have not yet been exercised, have not yet expired, or have not been settled by delivery of the underlying assets.

Open interest serves as a metric for assessing the level of involvement of market participants in a particular futures contract. An active growth in open interest combined with an increase in the price of the asset may indicate an active upward movement.

The rise in interest in futures has coincided with the BTC price rising more than 25% over the past three weeks. And driven mainly by large-scale investments in spot bitcoin ETFs in the US.

The overall credit load in the market remains low. And that reduces the risk of price collapse and high volatility due to forced closure of long or short positions due to lack of collateral. According to CryptoQuant, bitcoin’s leverage ratio recently increased slightly from 0.18 to 0.20, but is still far from last year’s levels.

Our experts note that  Open interest in bitcoin-denominated futures currently stands at 430,500 bitcoins. And that is well below the October 2022 peak of 660,000 bitcoins, according to CoinGlass data.

Our experts talked about the sources of new capital in the cryptocurrency market. And the trends shaping the demand for cryptocurrency

The interest of users in the cryptocurrency market and the demand for cryptoassets are driven by both global expected events and new trends. Our experts told us what exactly could trigger capital inflows into bitcoin and other cryptocurrencies in 2024.

Halving and new highs

In 2024, one of the most anticipated events for the crypto industry will take place – bitcoin halving. This term refers to the halving of payments to miners – members of the cryptocommunity who mine cryptocurrency.

Halving is a planned halving of the number of newly issued bitcoins that are created and distributed to miners who perform verification and validation of transactions on the network. The procedure is embedded in bitcoin’s program code to ensure that the total number of coins in the network never exceeds 21 million units.

Bitcoin halving occurs about once every four years. The event reduces the inflow of coins to the market by half. But the demand for them at the same time remains unchanged. As a result, there is a shortage of bitcoins, which pushes the cryptocurrency’s rate up. Statistics show that bitcoin updates the absolute maximum value about a year and a half after halving. That is, theoretically, the new peak of the rate will be reached in 2025.

But there are speculations according to which the maximum, contrary to history, can also be registered in 2024. The reason is the likely launch of spot bitcoin-ETFs in the US. The battle of market participants for the approval of the instrument has been going on since 2013. With its appearance, institutional investors’ money may flow into the crypto industry.

New capital sources

The year 2024 has several prerequisites to become favorable for the cryptocurrency market. First, investors are full of positive expectations due to hopes of approval of a bitcoin-ETF by the U.S. Securities and Exchange Commission (SEC). Market participants expect the emergence of a bitcoin-linked exchange traded fund. And that will push asset managers from the world of traditional finance to embrace cryptocurrencies as another tool to diversify portfolios. This will encourage capital to flow into the cryptocurrency market.

Secondly, we can expect to see continued growth in interest in Ordinals, which are now available not only on the bitcoin network. But also in other blockchains. This gaining popularity, which was born in the bitcoin blockchain, is now spreading to other networks as well.

The interest in the new standard also facilitates the flow of capital into the crypto market and contributes to its growth. Above all, the positive impact stimulates interest in bitcoin. And whose blockchain has become the progenitor of the “ordinals”.

The year 2024 could also be a watershed year for the NFT market as a whole. And which has long been dominated by networks such as Ethereum or Solana. In November 2023, the volume of NFT trades in the bitcoin network exceeded that of Ethereum. And this was made possible by the emergence of Ordinals. This will probably be one of the major trends for the NFT market in 2024 – the flow of capital and users to the bitcoin network.

The third trend in 2024 will be the boom of ecosystems and so-called Layer 2 applications. These are focused on infrastructure creation and development of blockchain tokenomics. It is worth paying attention to the DePIN concept. The emergence of new concepts and applications like these. It could help stimulate adoption and demand for cryptocurrency by a wide range of users.

Our monthly feature. Our experts analyzed the state of the market and told about what will happen to bitcoin in the coming month

Bitcoin (BTC) is trading at $34.4k on Tuesday, October 31. And its price has increased by about 28% over the past month. In the first days of October, the rate of the first cryptocurrency was at $27 thousand. And on October 16, the price briefly reached $30 thousand. And in the morning of October 24, bitcoin sharply added 18% in price, reaching $35 thousand for the first time this year.

We are unlikely to see an altcoin season this year

Our experts count November and December as months. Within the framework of which the cryptocurrency market capitalization can grow to at least $1.6 trillion. And ideally – to $1.8 trillion. Historically, the fourth quarter is successful for the cryptocurrency market, and so far October confirms this pattern.

The lack of fresh liquidity given the tight monetary policy (MPC) is certainly affecting the market. But however, demand for current crypto-oriented ETFs, even before spot bitcoin ETFs are approved, could be the reason for capitalization gains. And growth in the most capitalized assets. Expect BTC prices to rise to the $38k level in November, followed by a move into the $40k-$45k zone by the end of this year.

We are unlikely to see an “altcoin season” this year. And we expect market capitalization growth in November-December primarily due to assets from the top-10. The current macroeconomic situation is not suitable for risk-on strategies. And what we can see from the falling US stock market and the rise in gold. As a consequence, mid-cap crypto assets dependent on venture capital, aggressive investments are still experiencing a significant lack of funds. And they are unlikely to show a multiple price growth in the next month or two, our experts believe.

There should be strong new stimulus in the market this year

Now the situation on the cryptocurrency market is influenced by several factors. This is, first of all, investors’ expectations of approval for the launch of bitcoin ETFs. First, that the current spiral of bitcoin growth was triggered by rumors that the U.S. regulator approved a bitcoin ETF from BlackRock. And while the rumors were quickly denied. But the growth continued – reflecting the general positive mood of crypto investors about the prospects of such an approval. Everyone agrees that it will happen soon.

Secondly, bitcoin is affected by the tense geopolitical environment. And which has also triggered a rise in gold prices. Bitcoin is traditionally seen as “digital gold”. And so partly the capital was directed to diversify investment portfolios and in BTC . In addition, market participants expect bitcoin to rise in the run-up to the halving, which will take place in the spring of 2024.

However, there are also a number of negative factors that are restraining market growth. First of all, it is the expectation of stricter regulation of cryptocurrency exchanges and stablecoin issuers in the United States – one of the largest markets for cryptocurrencies. Therefore, we can expect moderate bitcoin growth in November. But a powerful growth spiral or bull cycle should not be expected yet. For this to happen, new powerful incentives must appear, which will be the catalyst for a new rally. Such a stimulus could be the approval of the launch of ETFs. Or either some signal regarding inflation risks in the U.S. from the U.S. Federal Reserve (Fed). For example, a new stock market stimulus package.

Bitcoin price has overcome a number of key resistances what we expect in November

Since Bitcoin belongs to the class of risky assets. And the crypto market is influenced by the dynamics of the dollar and U.S. macro statistics. Among the key events for November, we can highlight the meeting of the U.S. Federal Reserve and the speech of its chairman Jerome Powell at a press conference on November 1. On November 3, data on the labor market in the U.S. will be of interest. On November 14, the inflation report will be released. Data on consumer prices are extremely important. And as investors are interested in the regulator’s future actions on rates in December due to high inflation.

The recent rally of the BTC/USD pair to $35k was triggered by expectations of bitcoin-ETF approval. And it was supported by inflows into crypto funds and increased open interest in bitcoin futures on the Chicago Mercantile Exchange (CME). The court also ordered the SEC to review Grayscale’s application for a spot bitcoin-ETF. Therefore, any published news or rumors (confirmed and unconfirmed) on the ETF will have a strong impact on the market.

During the last rally, the bitcoin price overcame a number of key resistances, testing the $35k level. After updating the high, the price has been in a sideways trend for six days. According to experts’ calculations, the downward correction is expected from November 9 to November 21.
Until November 9, buyers have time to move to the area of $36 th. If the price closes below $32.7 th before November 9, it may herald the beginning of correction. The target level for correction is $31.7 th.

Investors should be alerted by the lack of price growth after the Fed meeting on November 1 and Powell’s speech. And again, the less the price falls during the correction. The stronger will be the growth after November 21.

Our weekly feature. Our experts analyzed the market situation and told how it may change in the coming week for Bitcoin and the market as a whole.

On Sunday, October 29, bitcoin ( $BTC ) is trading at $34.2k. And its price has increased by 14.5% since the end of the previous week. Our experts have analyzed the situation on the market and assessed the prospects of bitcoin rate movement for the next seven days.

Last week’s analysis and highlights:

• Bitcoin price rose to $35,280 amid optimism around bitcoin-ETF approval.
• The SEC has been officially mandated to review Grayscale’s application to launch a spot bitcoin-ETF.
• SEC Commissioner Hester Pearce stated that the spot bitcoin-ETF should have been approved 5 years ago.
• The DXY dollar index hit a one-month low but was able to recoup all of its losses.
• After the rally, the price entered a consolidation between $33k and $35k.

Bitcoin has been trading in a range of $32,400 to $35,280 this week. On Monday, the price rose to $34,741. And on Tuesday, it reached a high of $35,280. This was followed by a correction to $33,390 on Friday.

On October 23, bitcoin rose 10.26% to $33,069. The rise was driven by several factors. First, the DXY dollar index hit a one-month low on the back of falling US government bond yields. Second, a U.S. court upheld the SEC’s review of Grayscale’s application to launch a spot bitcoin ETF. Thirdly, the rally was supported by technical factors – liquidation of short positions worth $161 mln and breakthrough of important resistance levels.

On October 24, the price of bitcoin rose 2.58% to a high of $35,280. Among the growth factors is the decision of the U.S. court obliging the SEC to reconsider Grayscale’s application. As well as news that BlackRock has assigned a ticker to a bitcoin-ETF pending approval. In addition, support came from a weakening dollar. However, by the evening, the dollar index reversed upward, stopping the bitcoin price growth.

On October 25, the price growth slowed to 1.69%, to the level of $34,496. Amid expectations of bitcoin-ETF approval, investors ignored the strengthening of the dollar and the decline in stock indices. Investors’ attention was drawn to the upcoming halving. Bitcoin’s share of the crypto market rose to 51.4%.

On October 26, the price of bitcoin fell by 1% to $34,151. The market was pressured by the strengthening of the dollar and the fall of technology stocks in the United States. The Nasdaq index fell by 2% and the S&P 500 fell by 1.2%. US 10-year bond yields fell to 4.88%. Fears of recession in the US have increased.

On October 27, the BTC/USDt pair fell by 0.76% to $33,892. During the U.S. session, the price declined to $33,390 amid falling stock indices. Since the end of July, the S&P500 index has fallen 10.2% to 4137. This week, US Q3 GDP data beat expectations, showing the economy accelerating at the fastest pace since mid-2021. Despite US Q3 GDP and expectations of a rate hike in December, fears of a recession in the country remain. Inflation continues to worry the Federal Reserve (Fed).

The U.S. Personal Consumption Expenditures (PCE) index showed that consumer price expenditures rose at the fastest monthly pace since May. But the annual PCE fell slightly in September, renewing concerns about high interest rates.

What’s in store for us next week with Bitcoin

We have a busy week ahead of us. The focus of economic data will be on employment numbers, including the ADP private sector employment report on Wednesday. And jobless claims on Thursday. And non-farm payrolls on Friday.

The market expects current monetary policy to remain in place. And despite the strong economy and tight labor market as inflation slows. But remains above the target level. In addition, the ISM Services report on business activity index in the US and China is expected. Geopolitical events also remain key drivers for traditional assets. Investors will continue to analyze the results of corporate reports.

The BTC/USDt pair is trading above $34k. According to the volume analysis, buying has noticeably decreased since Friday. This is understandable, because the price is in a sideways trend for a long time without continuing the rally. And when the price stands for a long time, the two-day flat starts to get on investors’ nerves. At this time short-term speculators, working on the downside, start to get involved.

By cyclic analysis there are no changes. The growth phase should last until November 9. Conditions are still favorable for growth.

An alarm bell for buyers may be the absence of upward movement after the speech of J. Powell on Wednesday after the FOMC meeting. According to the latest data from CME Group, rates will remain in the range of 5.25-5.50 with a 99.9% probability on Nov. 1 and an 80% probability on Dec. 13.

BitRiver forecasts that the decline phase may last from November 9 to November 21. Closing the day below $32,700 is likely to be a precursor to the beginning of the correction phase. For the correction, $31,700 should be selected as a support target level. Conclusions of our experts: We are waiting for the rate decision, Powell’s speech and the US labor market report.

Bloomberg reports on growing faith in Bitcoin among investors who fear a U.S. default

Investors would prefer Bitcoin to the dollar as a means of saving capital in the event of a U.S. government debt default. This is evidenced by the results of a survey Bloomberg Markets Live Pulse. Which was conducted May 8-12 with 637 respondents. 7.8% of professional and 11.3% of retail investors will choose the first cryptocurrency as a protective asset. And while the U.S. dollar will be relied on by 7.8% and 10.2% of investors from the two groups, respectively.

At the top of the list of defensive assets is gold. Despite the fact that the price of the precious metal is currently near its historical maximum ($2,000 per ounce). And it was chosen by about half of surveyed investors from both categories. On the other hand, the report notes the current shortage of alternative assets to gold for hedging.

The second most popular asset to buy in case of default were U.S. Treasury securities. Journalists see a certain irony in this, because it is these debt securities that will probably default. But even pessimistic analysts think. That holders of treasuries will be paid, albeit late, as the article says, which explains the choice of this asset. It will be bought in case of default by 14-15% of respondents.

In third place is Bitcoin, followed by the U.S. dollar, the Japanese yen and the Swiss franc. At the same time, more than 55% of respondents said that a default or even its approach would have a strong negative impact on the dollar as the global world currency. Also, our experts note that another 13.6% of respondents said that significant damage to the U.S. national currency has already been done and it can only increase further.

Two exchange traded ETF funds raised a total of $73.6 million on the eve of their debut on Hong Kong Stock Exchange. Crypto-Upvotes expert review

Two exchange-traded funds (ETF) will begin trading on the Hong Kong Stock Exchange (HKEX) on December 16. They are based on cryptocurrency futures. These are the first funds of their kind in Hong Kong. CSOP Asset Management’s ETF invest in Bitcoin and Ethereum futures. Which are listed on the Chicago Mercantile Exchange (CME Group) in the United States. They are the only cryptocurrency assets allowed by the Hong Kong Securities and Futures Commission (SFC).

Two funds raised a total of $73.6 million before their debut on the Hong Kong Stock Exchange. The larger one, CSOP Bitcoin Futures ETF (3066.HK), raised $53.9 million, according to the management company. That’s more than the ProShares Bitcoin Strategy ETF, the first U.S. Bitcoin futures ETF. Which began trading on the New York Stock Exchange (NYSE) in October 2021 with an initial capital of $20 million.

Crypto-futures ETF demonstrate that Hong Kong remains open-minded about the development of virtual assets. This is despite recent problems in crypto-industry, said Yi Wang, head of quantitative investment at CSOP. He noted that since ETF do not invest directly in Bitcoin and are traded on regulated exchanges in the U.S. and Hong Kong. Investors will have more regulatory protections than tokens traded on unregulated platforms.

The first futures-based Bitcoin-ETF were approved in the U.S. back in 2021. However, the U.S. Securities and Exchange Commission (SEC) has so far rejected all applications to launch a spot exchange-traded fund (ETF). SEC head Gary Gensler attributed this to the fact that applications for such funds do not meet the Securities Act’s standards for cracking down on fraudulent or manipulative practices.