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.

Investors are not in a hurry to part with their BTC at current prices, our experts explain the reasons why

The average value of transactions on the BTC blockchain has decreased significantly from its 2021 peak. And recorded during the bull market. About it writes CoinDesk citing reports from experts.

“There are very few funds moving within the blockchain. And that is a sign of low liquidity and unwillingness of investors to sell their cryptocurrencies.” This is also what Blockware Solutions analysts wrote in a newsletter “No one wants to sell,” the experts added.

According to data from analytics company Glassnode, the average bitcoin transfer volume over the past two weeks was less than $200,000. In 2021, during the cryptocurrency market bull market, this figure often exceeded $1 million.

Experts attribute the decline in transaction volume to the concentration of spot market trading in exchange-traded funds (ETFs). In addition, other market indicators indicate that the share of bitcoins. Which have not moved online in three to five years, continues to grow. And long-term holders are in no hurry to sell their assets, expecting further growth in the BTC rate.

Prospects for BTC price growth

Our experts note that Blockware analysts predict. That in the coming months the price of bitcoin can grow to six-digit values. And the historical maximum may exceed $150 thousand.

Strong price growth will catalyze a sharp increase in transaction volume. Investors will start taking previously purchased coins to exchanges for sale, increasing the liquidity of supply – according to Blockware analysts.

The low volume of network transactions at the moment indicates that the market lacks sellers. Who are ready to part with cryptocurrency at the current price.

Historical data on market cycles and the value of one of the major technical indicators may indicate further Bitcoin appreciation

Bitcoin could surpass the all-time high of $69,000 by the time of the fourth halving, scheduled for the second half of April. About it writes CoinDesk.

Technical indicators

Based on data from the relative strength index (RSI) indicator, which measures the speed and change in prices, Markus Tillen suggested an acceleration of bitcoin’s uptrend.

A week ago, bitcoin’s 14-day RSI exceeded the 80 mark for the first time since December. According to 10X Research, 12 out of 14 times in the past when the RSI exceeded the 70 mark. That bitcoin price rose an average of 54% over the next 60 days.

“It’s worth noting that the previous time this signal appeared, the bitcoin price was at $48k. When considering an average return of 54% over 60 days, bitcoin could rise to the $74,600 level,” noted Markis Tillen of 10X Research.

The bitcoin price is at $52k, as of February 20, which is 25% above the price level at the beginning of the year and 207% above the low reached in November 2022. Bitcoin quotes are just 28% below the all-time high of $69k. And with that, the supply of coins will decrease as a result of the upcoming halving.

The second reason is Market Cyclicality

Our experts note that as previous cycles have shown. Which are related to bitcoin halving, the bottom of bitcoin price often comes 12-16 months before the halving. And then a period of growth follows, both before the event itself and for a year afterward. In the previous three cycles, bitcoin prices rose more than 30% in the eight weeks before the halving.

Based on historical data, bitcoin rises an average of 32% in the 60 days before the halving. “By the time of the halving or even earlier, the value of BTC could be approaching a record high of $69,000,” CoinDesk quoted Marcus Tillen as saying.

The assumptions of other cryptocurrency market analysts coincide with the predictions of 10X Research. Analysts of the trading company QCP Capital published a note for investors. And in which they allowed the possibility of BTC exceeding the historical maximum already by the end of March. In their opinion, the price of digital currency will depend on the inflow of funds into exchange-traded funds (ETFs) and accumulation of options to buy bitcoin with strike prices of $60-80 thousand.

According to the calculations of another analytical company – CryptoQuant, the price of the first cryptocurrency can grow to $112 thousand. And if the current trend of inflow of funds into exchange-traded funds ( ETF) for BTC continues.

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.

Bitcoin and Ethereum showed growth for the first time after a sharp drop in late January

The bitcoin (BTC) exchange rate rose by 4% on February 8. And rising at the moment to $44,733 in a pair to the Tether USD (USDT) stablecoin on the Binance exchange. Our experts note that BTC last traded above $44,000 on January 24.

The second largest cryptocurrency Ethereum (ETH) also updated its two-week high at $2.44 thousand, adding more than 3% to its price over the day. The current year’s high for Ethereum was reached on January 12 at $2719 amid investors’ expectations of U.S. regulators’ approval of spot ETFs for Ethereum. And applications for which were submitted by BlackRock, Grayscale and Fidelity Investments.

Now the jump in the price of ETH also came amid the filing of an updated joint ETF application from 21 Shares and Ark Invest, managed by Katie Wood. The document, in particular, updated data on the redemption mechanism for units of the future ETF. And information about the possibility of placing the fund’s coins in staking in external services.

The latter fact caused a sharp growth of tokens of staking services. Thus, the rate of LDO token from the largest staking service Lido jumped by 7% at the moment. And when news of Ark Invest’s updated bid hit the terminals. LDO is among the top 40 largest crypto assets by capitalization with a market cap of over $2.5 billion. According to the official website, Lido hosts $23 billion worth of ETH coins at the current exchange rate.

Other coins from the top 10 by capitalization also rose in price over the past 24 hours. The Solana (SOL) token rose more than 6% over the day, while BNB from Binance, Cardano (ADA), Dogecoin (DOGE) and Ripple’s XRP rose in price by 3 to 9%.

Our experts analyzed the market situation and told how it may change this week for Bitcoin and the market as a whole

During the period from January 22 to January 28, the Bitcoin price showed high volatility. During the week, Bitcoin traded in a wide range from $38,555 to $42,246.

On Monday, January 22, the price fell below the $40k mark, reaching $39,480. The drop was caused by the active outflow of funds from Grayscale’s bitcoin-ETF amid the endorsement of competing products.

On Tuesday, January 23, the Bitcoin price fell to a low of $38,555. And that led to a wave of liquidations in the futures market. The outflow from Grayscale continued to exert pressure.

On January 24 and 25, quotations consolidated in the range of $39,484 – $40,555 with multidirectional dynamics. High volatility remained on the market. Market participants were waiting for some new portion of positive news.

On Friday, January 26, at the end of the day, the BTC/USD pair rose by 4.66% to $41,823. Buyers managed to stop the collapse of the crypto market. After a 13-day drop of 21% from the January 11 high of $48,969, the price recovered 9.57% to $42,246. They have reversed the drop for January 22, and this is a positive for the whole market.

Reasons for the fall in the price of  Bitcoin

Bitcoin’s downward correction has been largely attributed to redemptions in Grayscale Bitcoin Trust (GBTC). Before GBTC was converted into an ETF on January 11. And it was one of the few ways for U.S. investors to access BTC without owning the underlying cryptocurrency. After the long-awaited approval on Jan. 10, investors took the opportunity to sell their GBTC units, locking in profits on their trades. This meant an exit from the cryptocurrency market, hence the downward pressure on the bitcoin price. Outflows from the fund totaled nearly $4 billion.

The price bounced off the $38,555 support. The recovery accelerated after JPMorgan said that the peak of GBTC sales is mostly over. The upward correction intensified from the European session with the decline in the dollar index. The outflow of funds from the Grayscale trust slowed down, which led to an easing of pressure on the cryptocurrency.

BlackRock’s iShares Bitcoin ETF iShares (IBIT) has had a significant impact on the cryptocurrency investment industry. In just 10 days after the fund’s launch, the company has accumulated $1,982,095,794 or 49952.32570 BTC (from a report from BlackRock’s website) in assets under management (AUM) after the fund’s launch and market cap. The amount indicates a lot of interest among investors. At the current exchange rate, it is already over $2 billion.

When the price correction will end

Cautious investors have now taken a wait-and-see attitude. As this is only the first upward wave after the market collapse. Then sellers will check buyers once again. And how ready they are to defend the $38,555 level and raise the rate to $69k for Bitcoin by the halving, which will take place around April 20.

BitRiver predicts that the decline phase will end on February 10. Then we can test the level of $50 thousand. In order to support the bullish trend from the low of $24,901 from September 11, 2023. The higher the buyers drive the price, the less likely it is to update the $38,555 support.

There is great news for buyers now – a pin–bar is forming on the weekly chart – a green body with a long lower shadow. Our experts remind that the fall from $48,969 started with such an inverted candle. And this is a bid for growth up to $45 thousand.

Important events of this week

The economic calendar is quite full of important data. January 30 will see the release of Eurozone GDP data for the fourth quarter. January 31 will see the release of China’s manufacturing PMI for January. And oil inventory reports from the American Petroleum Institute and the U.S. Department of Energy, the U.S. Federal Reserve meeting and J. Powell’s press conference. On February 1, the States will publish the index of business activity in the manufacturing sector. And on February 2 – a report on the employment market (unemployment, new jobs, average hourly earnings). And also the consumer sentiment index from the University of Michigan for January.

As for the Federal Reserve’s next moves, CME Group’s FedWatch tool predicts a rate hike at next Wednesday’s (Jan. 31) Fed meeting with a 96.7% probability. Votes in March are split, but the probability of a cut in May is estimated at around 87%.

Our experts analyzed the market situation and told us how it may change this week and what will be the price of Bitcoin

In the past week, Bitcoin’s dynamics were determined primarily by the external background – the U.S. dollar, stock indicators and decisions of crypto market regulators.

After a sharp drop on January 12, Bitcoin price consolidated in the range of $41,500 – $43,500 for five days. On January 16, a local maximum was reached at $43,578. However, the excitement around the launch of the bitcoin-ETF in the US did not lead to sustained growth.

The pressure remained amid the strengthening of the dollar. And the negative dynamics of stock indices and continued outflows from the Grayscale fund. From January 11-17 alone, $1.624 billion was withdrawn from Grayscale.

On January 18, the SEC postponed its decision on Ethereum-ETF launch applications until March 5. This disappointed investors and triggered a resumption of the downgrade. On the day, BTC dropped to $40,630, and at the end of the day, it lost 3.4%, dropping to $41,327.

On Friday, January 18, the BTC/USD pair closed with growth. The price rose by 0.80%, to $41,659. At the beginning of the U.S. session, the bitcoin exchange rate was declining to $40,280. Sellers tried to pass the support of $40,500, but failed. Buyers were supported by two factors: the decline in the dollar index and the growth of stock indices. By the close of the day, the price went into the plus side. At the same time, all 11 bitcoin-ETFs showed growth of about 2%.

Despite Friday’s decline, the US Dollar Index (DXY) ended the week in the plus on the back of rising US bond yields. And lower probability of rate cuts in March and May. According to the CME FedWatch Tool, the probability of interest rate cuts in March and May is 46% and 51%, respectively, compared to 76.9% and 17% as of Jan. 12.

Bitcoin price

Bitcoin is at $40,600+ at the time of writing this review. Our experts note that the price may trade above the key support of $40,500 until February 6. The downward movement from $48,969 to $40,280 has a three-wave formation. This means that the price may return to the level of $44,300 by January 23. A return to it would not be a signal to buy bitcoin. The probability of the price dropping to $38,500 by February 10 is more than 75%.

Buyers needed to go above $50k before January 8. Now it is necessary to form a bridgehead for a new rally before the halving in April. Trading volumes on spot bitcoin-ETFs are not bad. But the outflows from the Grayscale fund are very large, which makes many investors nervous.

If the trading range of $40,000 – $44,500 with an upward bias is maintained until February 10. Then the probability of a drop to $38,500 will be greatly reduced. According to BitRiver’s forecasts, buyers need to pass the $44,500 level. In order to level out the “bearish” sentiment. We follow the news on ETFs, the dynamics of the dollar index and the S&P 500.

Among the key events in the week that may affect the dynamics of the dollar and cryptocurrencies: the publication of data on U.S. GDP (January 25) and U.S. inflation (January 26). Bitcoin belongs to the class of risky assets, so it is sensitive to the value of DXY.

The U.S. SEC has issued a favorable ruling on the launch of Bitcoin ETF from BlackRock and other companies. These exchange-traded funds are expected to open access to cryptocurrency to a wide range of investors and attract new capital

The US Securities and Exchange Commission (SEC) has approved the launch of 11 exchange-traded funds (ETFs) investing directly in Bitcoin. And will open up access to the largest cryptocurrency in the traditional US financial market and beyond.

The SEC has authorized funds from all applicant companies, including BlacrRock and Fidelity Investments. And to begin trading shares on the New York Stock Exchange (NYSE), NASDAQ and Chicago Board Options Exchange (CBOE) starting Jan. 11.

Why a spot bitcoin ETF is important

Various exchange traded funds (ETFs). And including gold, have trillions of dollars in assets under management. In the cryptocurrency community, it is widely believed that even a small percentage of this capital can potentially impact the global crypto market. After the approval of spot Bitcoin ETF, the demand for cryptocurrency should increase: buying shares of the funds implies the delivery of bitcoin as an underlying asset, that is, its direct purchase in the market, affecting the rate.

The decision came a day after SEC  X account (formerly Twitter) posted a false message that the agency had approved the ETF. Minutes after the publication appeared, the regulator said the account had been hacked. This led to sharp fluctuations in the bitcoin exchange rate. Which reacted with sharp jumps to each of the statements.

Regulator has been withholding approval to launch ETFs for more than a decade

Our experts note that back in 2013, twin brothers Tyler and Cameron Winklevoss, now owners of the Gemini cryptocurrency exchange, decided to create the first such fund. In June 2023, the world’s largest management company BlackRock applied for registration of a bitcoin-ETF.

The ruling in favor of bitcoin funds came after Grayscale Investments scored a key victory over the SEC in court. A federal appeals court overturned the SEC’s denial of Grayscale’s application to convert its existing bitcoin trust into a full-fledged ETF. The court called the denial “arbitrary and capricious” because SEC officials were unable to make a compelling argument for banning spot funds. Back in 2021, the SEC approved several ETFs. Which allow investors to speculate on bitcoin futures. But the shares of such ETFs have no direct impact on the bitcoin market.

SEC Chairman Gary Gensler emphasized this in a public statement. According to him, it was the Grayscale case that was the tipping point for the regulator to change its rhetoric. Nevertheless, the agency still “does not endorse or support bitcoin itself.” Investors, it said, should be wary of the “numerous risks associated with bitcoin and products whose value is tied to the cryptocurrency.”

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.

In another recalculation, the bitcoin difficulty index rose nearly 7%, setting a new all-time high at 72.01 T.

Bitcoin mining difficulty hit an all-time record this past weekend. The figure rose 6.98% to 72.01 T, according to BTC.com. The previous high was recorded on November 26, 2023, when the difficulty reached 67.96 T.

The complexity of mining determines the amount of computing power required to find a new block in the bitcoin blockchain. How many times, on average, miners must calculate the value of a hash function to find a cryptocurrency block. With the current increase, the target difficulty value is set at 72.01 T (1 T = 1 trillion).

The average bitcoin hashrate (the total processing power of the hardware mining the cryptocurrency) at the current difficulty is expected to be 515.36 EH/s, which is also the maximum value. The previous maximum average hashrate was recorded at 486.35 EH/s on Nov. 26.

The first cryptocurrency’s mining difficulty is forecast to increase by another 1.6% to 73.16T on January 5.

The complexity of mining is increasing amid the rise in the price of bitcoin. The BTC exchange rate as of December 26 is hovering around $42.1k+, according to CoinMarketCap. Over the past month, the asset has risen in price by 14.5% and updated the highs since April 2022.

Our experts note that in mid-October, bitcoin began to grow rapidly amid news about the possible approval of a spot exchange-traded fund (ETF) for bitcoin by the U.S. Securities and Exchange Commission (SEC). In less than a month, the BTC exchange rate has grown by almost $10 thousand.

At the moment, several large investment companies are waiting for approval of their own ETFs on bitcoin by the U.S. Securities and Exchange Commission. The launch of such ETFs is considered in the crypto community as a catalyst for a new bull cycle in the market.