Cryptocurrencies opened the week in a mixed mood but final BTC shows strength and climbed above $27,500 signaling that bullish momentum is not out of the question. The altcoins are also gaining, the Graph cryptocurrency is up almost 10%, Litecoin, Phantom and Algorand are also doing well.
- A survey organized by Bloomberg indicated that bitcoin could become a beneficiary of potential systemic problems in the US, where the discussion of raising the debt ceiling is still intense.
- Cryptocurrencies hardly reacted to the dismal reading of the NY Fed's regional manufacturing index, which showed the most rapid monthly decline since April 2020;
- Also, hawkish comments from the Fed's Raphael Bostic, who signaled that the market may not see rate cuts in 2023, did not dampen the rebound. On the other hand, it signaled the belief of some Fed members in the absence or shallow recession in the US because otherwise rate cuts would be likely and necessary;
- The challenge for the market is still drying up liquidity and problems with the 'depth' of the BTC market, following the departure of the two largest market-makers in the US (JumpCrypto, Jane Street) and the expiration of the institutional Silvergate Exchange Network (SEN).
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Open real account TRY DEMO Download mobile app Download mobile appA survey published by Bloomberg indicates that some investors may consider buying Bitcoin if the US fails to deal with the debt limit increase and declares a 'default'. Looking at the types of professional investors (black bars) and retail investors, however, gold and the Japanese yen may be preferred by the instutions. Both gold and bonds have found themselves above Bitcoin. However, looking at the rather shallow market and drying up volatility, a potential default in the U.S. could create the conditions for a dynamic rebound in BTC, if the survey result translates into investment decisions. Source: Bloomberg
While peer to peer transactions activity on the BTC network has been booming recently, the number of active addresses has fallen to record lows this cycle, i.e. 566,000 network users per day. In principle, this is not optimistic data for BTC because it indicates some actual stagnation in the network's development, but on the other hand it may illustrate a broader reluctance to sell at outlandish prices. Source: Glassnode
So far, Bitcoin's halving cycles have worked almost flawlessly in the broader context, each time halving preceded a bull market. This, of course, does not have to happen again (Monte Carlo illusion). In view of BTC's modest history, investors rely on a relatively small set of data to estimate potential scenarios. Glassnode's chart shows that the Realized Price (the average purchase price of all BTC) is still barely $800 below the average price of long-term investors (whose BTC has not changed hands for at least 166 days). Historically, this preceded a 'bullish' cut in the Realized Price above the 'hodlers' price. The rise in the realized price above the price of BTC purchased by long-term addresses occurred in June, prior to the previous two halving events (2016, 2020). The estimated halving date is April or May 2024. Source: Glassnode
Graph, D1 interval. The cryptocurrency is gaining almost 10% today. The cryptocurrency has rebounded respecting support from the SMA200 (red line) and the previous local low from the first half of March. Source: xStation5
Looking at the chart of BITCOIN, on the H1 interval, we see that the cryptocurrency is measuring itself against key short-term momentum resistance in the form of the SMA200 (red line). If bullish sentiment prevails, the upside could be extended towards $28,300 where we see the 23.6 Fibonacci retracement of the wave from early March (the previous retracement of 38.2 has already been overcome by bulls). Source: xStation5
