Is the Bitcoin ETFs now calm or is the AI hype continuing to drive the markets?

Thought of the week

AI could be the big trend / hype in 2024, which we have lacked in recent years as a catalyst for individual sub-categories of the digital asset sector. Nvidia provides the basis here, as the figures are and have been above average. This fulfils the narrative that major changes will occur as a result. This is fuelling share prices in the medium term, but can also lead to a bubble forming.

Digital Asset News

Bitcoin ETFs are recovering from net outflows. As data shows, the market-leading cryptocurrency has been struggling around the USD 51,000 mark.
Bitcoin has thus been trapped in a narrow price range for more than a week now, which is particularly related to concerns about seemingly decreasing capital inflows into Bitcoin index funds (ETFs).
These inflows have decreased noticeably in recent days, with a net outflow of USD 36 million on 21 February, according to data from BitMEX Research. Looking at the speed at which ETF issuers are buying new BTC, Thomas Fahrer, CEO of crypto data service Apollo, predicts that industry leader BlackRock could even permanently change the future supply structure of Bitcoin with its iShares Bitcoin ETF (IBIT).
“98% of all #Bitcoin that exist so far already cost > 100,000 if you wanted to buy them,” the expert points out. He adds:
“We should keep in mind that the current price is only the marginal trading price at this point in time. BlackRock is testing this theory right now, so we’ll find out soon enough.” Meanwhile, the experienced crypto trader is focussing on the short-term price development of Bitcoin and warns.
There could well be another major setback.

The US Securities and Exchange Commission (SEC) is seeking comment on a proposed rule change that would allow the listing and trading of options on Bitcoin exchange-traded funds (ETFs).
According to a 23 February notice, the NYSE filed for a rule change to allow the listing and trading of options on the Bitwise Bitcoin ETF (BITC), the Grayscale Bitcoin Trust (GBTC) and “any fund that holds Bitcoin”.
If approved, the options will be traded “in the same manner as options on other ETFs (including commodity ETFs) on the exchange,” the notice states. This includes rules such as listing criteria, expiration dates, strike prices, minimum price changes, position and exercise limits, margin requirements and others.
In the context of Bitcoin ETFs, options would allow investors to hedge or speculate on the price movements of a BTC ETF rather than on Bitcoin itself.
Grayscale’s CEO, Michael Sonnenshein, has recently publicly advocated for regulators to approve such crypto-derivative products. According to the CEO, options are good for investors as they “can support price discovery and help investors better navigate market conditions or achieve desired outcomes, such as realising returns”.

Mining company Riot Platforms recorded a 19% increase in the number of Bitcoin (BTC) produced in 2023 and mined a total of 6,626 BTC. The company also reported an increase in annual revenue, mainly due to the higher average price of Bitcoin in 2023 compared to the bear market of 2022.
According to a report published by Riot Platforms on 22 February, the average cost of mining a single Bitcoin (BTC) in 2023 decreased by approximately USD 3,686 compared to 2022.
“Riot’s cost of mining Bitcoin in 2023, net of power credits allocated for self-mining, averaged $7,539 per Bitcoin compared to $11,225 in 2022, a decrease of 33% year-over-year,” the report states.
In addition, the average price of Bitcoin in 2023 exceeded that of 2022, resulting in an increase in revenue of $280.7 million compared to $259.2 million in the previous year.
“The increase in Bitcoin mining revenue was primarily driven by a slightly higher price of Bitcoin mined in 2023, which averaged $28,859 per Bitcoin, compared to an average price of $28,245 per Bitcoin in 2022.”

Digital Asset Market

The majority of digital assets once again experienced a positive trend and significant gains last week. Altcoins in particular were able to push bitcoins into the limelight in the weeks-long upswing and outperform for the first time in a while. Ethereum should be emphasised here, as the possible ETFs that could come in May will serve the same narrative as Bitcoin a few months ago and could lead to further bullish cycles. In technical news terms, it was another “quieter” week, which means that the price developments are largely due to the positive and record-breaking institutional inflows!
On a weekly basis, the overall market performance was again positive at 9.8%.
The message for the coming week is: If Bitcoin establishes the $50,000 mark as support, further upswings could follow quickly!

Chart technicals
From a chart perspective, Bitcoin is now trading around the support zones formed at ~$51,000 and has held these levels without any major sell-offs throughout the week. This suggests that there is currently less movement in the ETFs and that the majority of market participants are “observing” the situation without much trading activity. In this phase, altcoins can “pick up” volume and show positive developments. A renewed breakout from this price range could start a new cycle this week, although the “downside” should not be ignored this week!
The next upside price targets: ~$52,500, ~$54,100, ~$56,250
The next price targets in the event of a negative development: ~$50,250, ~$49,000 ~$47,000

Trading idea
The focus should be on liquid altcoins as long as Bitcoin consolidates. In the event of major sell-offs, profit-taking should be undertaken and Bitcoin positions should be increased in the event of bullish trend confirmations.

Weekly overview

As usual, we are also providing detailed videos for those who want to delve deeper into the subject.


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