If Bitcoin reaches a new all-time high this week, this could be followed by increased volatility with further upswings and downswings. In this phase, the media will also be in a “gold-rush mood”, in which the mechanisms of healthy risk management must nevertheless prevail in order to profit from this in the long term!
Thought of the week
Digital Asset News
Bitcoin’s bull market officially began on 1 March, according to the pseudonymous crypto analyst PlanB, who invented the much-cited Stock-To-Flow (S2F) prediction model for the Bitcoin price.
According to this model, the accumulation phase for Bitcoin’s current price cycle is over and the favourable buying opportunities are also over for the time being, as PlanB explains on X (formerly Twitter) with a view to the S2F price chart.
“The bull market has begun. If we look at the past, we are now looking at 10 months of rapid market closure panic (FOMO), which manifests itself in massive upswings combined with 30% downswings.
Nevertheless, PlanB’s current optimistic forecasts are in line with the expectations of other analysts. Among them is Vetle Lunde, Senior Analyst at K33 Research, who points out that Bitcoin usually moves sideways in the phase after the halving before a significant climb follows in the months thereafter. In this regard, Lunde explains:
“Although the immediate performance after the halving has often been subdued in the past, every halving so far has proven to be a good time to enter the market. This is because the period of 150 – 400 days after the halving is the perfect point at which the declining selling pressure from miners has a noticeably positive effect on the Bitcoin price.”
The new exchange-traded Bitcoin index funds (ETFs) in the United States recorded a cumulative daily inflow of USD 676.8 million, a new record high for the crypto market.
On 28 February, the corresponding Bitcoin ETFs received almost USD 680 million in investments. Of the ten players authorised by the US Securities and Exchange Commission (SEC), five ETFs accounted for the daily inflows: The iShares Bitcoin Trust (USD 612.1 million), the Fidelity Wise Origin Bitcoin Fund (USD 245.2 million), the Bitwise Bitcoin ETF (USD 9.9 million), the ARK 21Shares Bitcoin ETF (USD 23.8 million) and the WisdomTree Bitcoin ETF (USD 2.2 million).
However, the Grayscale Bitcoin Trust recorded outflows totalling USD 216.4 million, meaning that total inflows fell from USD 893.2 million to USD 676.8 million. Since 12 February, the Bitcoin ETF spot market in the US has seen cumulative inflows of USD 7.4 billion. In contrast, the market has lost over USD 7.8bn due to major outflows from Grayscale.
The insolvent crypto exchange FTX has opened a window of opportunity for its creditors to file claims, but the prices for leading cryptocurrencies such as Bitcoin and Binance Coin (BNB) are massively below current market values.
Research by Wu Blockchain shows that FTX claim prices are currently at USD 16,871 for BTC, USD 1,258 for ETH, USD 16.24 for SOL and USD 286 for BNB. These figures are in stark contrast to the current market prices, which stand at USD 62,144 for BTC, USD 3,424.62 for ETH, USD 129.96 for SOL and USD 411.32 for BNB.
Crypto investors whose assets were affected by FTX’s insolvency are concerned about the large discrepancy for their claims against FTX and are questioning the fairness and transparency of the platform. Many therefore used the social network X to express their displeasure and demand accountability from FTX.
Amidst the criticism, renowned business consultancy PwC issued an official statement on its website, offering insight into the situation surrounding FTX. PwC announced that FTX Digital Markets Ltd. is undergoing a Chapter 11 arrangement with FTX Trading Ltd. and its related debtors, which aims to consolidate the assets of the two companies.
Digital Asset Market
The majority of digital assets experienced strong upswings last week. Bitcoin was able to easily set new “local” highs and continue to move towards all-time highs. The immense net inflows into ETFs, which are continuing almost two months after their launch, highlight the demand for this asset class, attract media attention and ultimately also encourage retail investors to re-enter the market. Digital assets are thus following the stock markets, which are also setting new highs week after week and still show no signs of weakness. In technical news terms, this week was once again “quiet”, which means that the strong upswings must be attributed to the high capital flows from institutional investors!
On a weekly basis, the overall market performance is therefore around +20%.
The message for the coming week is: if the ETF narrative continues to work, Bitcoin could test its all-time high!
Chart technology
From a technical chart perspective, Bitcoin is now well above half of $60,000, continuing to head north and increasingly towards the highs from 2021, when Bitcoin was just below $70,000. This means that technical analysis is of little value in this market phase and the prevailing momentum, volume and order flow must be taken into account in order to generate a “sentiment overview”. The trend is your friend – as long as the gold-rush mood continues, it would be foolhardy to work against the market. With the market now “confirmed” for retail investors (entry of institutional investors), the market is experiencing a broad inflow. In this phase, altcoins in particular can often “pick up” volumes and show irrational positive developments. Great caution should be exercised here, as these are often cycles that cause increased volatility, at least temporarily, in order to carry out liquidations.
The next price targets in the event of a positive development: ~$67,500, ~$69,000, ~$71,250
The next price targets in the event of a negative performance: ~$62,000, ~$60,500 ~$58,500
Trading idea
Altcoins that serve a narrative that has not yet experienced any “hype” could favour positioning in the market. Otherwise, it is important to work with the trend and anticipate these movements with suitable risk hedging.
Weekly overview
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