Weekly Crypto Compass: Navigating the Highs and Lows

March 25, 2024

Welcome to your weekly guide to the dynamic landscape of the cryptocurrency market with Alvatix. This week, we delve into pivotal movements, the Bitcoin Halving, strategic shifts, and groundbreaking developments that are sculpting the future of digital finance. From technical analyses to market sentiment, we've curated key insights to help you navigate the crypto world.

Bitcoin (BTC) Technical Analysis

BTC/USD TradingView BitFinex Alvatix
BTC/USD TradingView

Bitcoin ($BTC) begins the final week of March with renewed momentum, aiming to challenge its all-time high (ATH) near $74,000. After briefly dipping below $61,000 the previous week, the positive weekly close near $67,200 has fueled optimism for a continued uptrend.

Key factors to Watch:

  • Price Activity: Currently trading around $66,879.55, Bitcoin's price fluctuation indicates a volatile market environment. Recent movements show a slight decrease over the last hour (-0.20%) but an overall increase over the past 30 days (+31.79%).
  • Key Levels:
    • Support Level: Approximately $59,000. This level acts as a safety net, where a significant amount of buy orders may be anticipated, potentially preventing further declines.
    • Resistance Level: Near $68,933.71. A breach above this level could signal strength and potential for continuation of the upward trend.
  • Moving Averages (MAs): A neutral sentiment is indicated by the convergence of various MAs. The close proximity of the price to MAs suggests a market in balance but on the lookout for a breakout direction.
  • Relative Strength Index (RSI) and Stochastic Oscillators: These oscillators are neutral, suggesting that BTC is neither overbought nor oversold, providing no clear edge to either bulls or bears at this juncture.
  • CME Gap Lures: A CME futures gap below current price levels may attract BTC/USD in the short term, suggesting potential near-term volatility.
  • Spot ETF Demand: The resumption of positive flows into Bitcoin ETFs signals renewed institutional interest, despite recent outflows from the Grayscale Bitcoin Trust (GBTC).
  • Miner Dynamics: Bitcoin mining difficulty is set to remain near all-time highs, possibly leading to short-term miner adjustments as the block subsidy halving approaches in April.

Ethereum (ETH) Technical Analysis

  • Price Activity: Ethereum is currently priced at $3,310.22, showing a -0.39% change in the last hour and an 11.40% increase over the past 30 days. The wider spread in its 30-day high and low suggests higher volatility compared to BTC.
  • Key Levels:
    • Support Level: The recent low at $3,056.56 serves as the immediate support, a critical juncture below which bears might gain control, pushing prices lower.
    • Resistance Level: The recent high at $3,678.68 marks the resistance. Surpassing this could indicate bullish momentum and potential for further gains.
  • Moving Averages (MAs): ETH’s price relative to its MAs indicates a market in a state of flux, with potential for either direction depending on broader market sentiment.
  • Oscillators: Similar to BTC, ETH’s RSI and Stochastic Oscillators are mostly neutral, indicating a lack of clear directional bias in the short term. This neutrality suggests a market waiting for external cues or a significant event to dictate the next move.
  • Whale Accumulation: ETH whales (those holding 1,000-10,000 ETH) have been significantly increasing their holdings. This accumulation during price dips suggests that large investors are bullish on Ethereum's long-term prospects.
  • Shrinking Supply: Two key factors are reducing ETH's available supply:
    • A record percentage of ETH is locked in smart contracts, taking it out of circulation.
    • Overall, ETH reserves on exchanges are dropping, indicating investors are choosing to hold rather than trade.
  • Macroeconomic Context: Ether's gains mirror broader market optimism fueled by signals the Federal Reserve could begin cutting interest rates by June. Lower rates could make riskier assets like cryptocurrencies more attractive compared to bonds.
  • Technical Rebound: ETH found strong support at the confluence of its 50-day EMA and a key Fibonacci retracement level. A decisive break above $3,500 could set the stage for a push towards the $4,000 target.
  • Key Takeaway: Ethereum's bullish momentum is supported by on-chain indicators showing supply reduction, strong whale interest, and improving technicals. This could lead to further gains in the coming weeks, with investors watching the $4,000 level as a potential near-term target.

Read more about Ethereum, such as on the Dencun upgrade and the investigation by the SEC.

Breaking Down the 2024 Bitcoin Halving

The Bitcoin halving event is a cornerstone of the Bitcoin protocol, occurring approximately every four years (or every 210,000 blocks mined), designed to reduce the rate at which new bitcoins are created. The next halving, expected around April 20, 2024, will decrease the block reward from 6.25 to 3.125 bitcoins per block​​​​.

Quantitative Breakdown and Expectations

Pre-Halving Conditions:

  • Current Block Reward: 6.25 BTC
  • Blocks Until Halving: 3,762 (as of the last update)
  • Total Bitcoins in Circulation: 19,663,988 BTC
  • Total Bitcoins to Ever be Produced: 21,000,000 BTC
  • Bitcoin Price: Approximately $66,943.00
  • Market Capitalization: Approximately $1.316 trillion
  • Daily New Bitcoins Generated: 900 BTC
  • Bitcoin Inflation Rate per Annum: 1.68%
  • Bitcoin Hash Rate: 592.90 Exahashes/s​​.

Post-Halving Expectations:

  • Block Reward: Reducing to 3.125 BTC
  • Inflation Rate: Expected to halve to approximately 0.84% per annum, effectively reducing the rate at which new bitcoins enter circulation, theoretically contributing to a deflationary pressure on the Bitcoin value assuming demand remains constant or increases.
  • Miner Revenue: The immediate impact on miners will be a reduction in the block reward, potentially affecting the profitability of mining operations, especially for those with higher operational costs. Historically, the market has seen an increase in the price of Bitcoin months after the halving, which could offset the reduced block reward.
  • Market Impact: Historical trends post-halving have shown a significant price increase within a year after the event. For instance, after the 2012, 2016, and 2020 halvings, Bitcoin experienced substantial price rallies​​.

Considerations for Investors

  1. Historical Performance: While past performance is not indicative of future results, historical patterns suggest that halvings have been bullish catalysts for Bitcoin price. However, market dynamics are complex, and multiple factors influence price movements.
  2. Market Dynamics: Supply and demand dynamics post-halving will be crucial. A reduced supply of new bitcoins, if met with stable or increasing demand, could lead to price appreciation. Investors should also consider broader market conditions, including regulatory changes, macroeconomic factors, and technological advancements in the blockchain ecosystem.
  3. Volatility: The period surrounding the halving could see increased volatility as traders and investors speculate on the halving's impact. It's essential for investors to exercise caution, conduct thorough research, and not base decisions solely on the halving event.
  4. Long-term Outlook: The reduction in Bitcoin's inflation rate and the capped supply reinforces its scarcity, an attribute that is frequently highlighted as a value proposition for Bitcoin as "digital gold." Investors with a long-term perspective may view the halving and its deflationary aspect as bullish factors for Bitcoin's future value.

This Week in Crypto

The crypto market this week has been bustling with significant regulatory actions and market movements, emphasizing the sector's volatile and ever-evolving nature.

Regulatory Actions and Legal Developments:

  • The Philippines Securities and Exchange Commission is set to block Binance, citing the company's operation in the country without the necessary licenses. This move highlights the ongoing regulatory challenges faced by crypto exchanges globally​​.
  • Nigeria has charged Binance with tax evasion following the escape of a detained executive, underscoring the complex legal landscape for cryptocurrency entities operating in different jurisdictions​​.

Corporate and Market Movements:

  • Espresso Systems has successfully raised $28 million in a funding round led by A16z Crypto, pointing towards continued investor interest in blockchain technology and its applications​​.
  • The crypto market has seen over $100 million liquidated in Bitcoin and Ethereum shorts as a global easing cycle begins, indicating a bullish sentiment among investors​​.

Innovations and Industry Milestones:

  • Tron surpasses 220 million accounts and plots an entry into the Bitcoin Layer 2 scene, aiming to expand its ecosystem and enhance its infrastructure for Bitcoin-based assets​​.
  • DigiFT launches the first US Treasury Bill tokens for direct ownership on the blockchain, marking a significant step towards integrating traditional financial assets with blockchain technology​​.

Institutional Interest and Investment Strategies:

  • Goldman Sachs' hedge fund clients are increasingly engaging in crypto options, signaling growing institutional interest in cryptocurrency derivative products amid the approval of spot Bitcoin ETFs​​.
  • Robert Kiyosaki, the author of "Rich Dad Poor Dad," has announced plans to acquire 10 more BTC, doubling down on his bullishness for Bitcoin ahead of the 2024 halving, with predictions of the coin reaching $100,000 by September​​.

Security and Platform Developments:

  • ParaSwap, a DeFi aggregator, has returned assets to victims of a smart contract bug, highlighting the ongoing security challenges within the decentralized finance (DeFi) ecosystem​​.
  • Bots have significantly impacted the Solana network, accounting for 93% of failed transactions, highlighting issues of network congestion caused by automated trading and activities. The surge in bot activity is particularly notable around meme coin trading, leading to suggestions for improvements to network logic and incentives to mitigate spamming by bots.

Chart Your Course with Confidence

As we wrap up this week's insights, remember that the crypto market's complexity is matched only by its potential. Whether you're a seasoned trader or new to the crypto realm, staying informed and agile is key to navigating the ups and downs of this digital frontier.

Join us next week for more updates, analyses, and insights designed to keep you ahead in the always evolving world of cryptocurrency.

Until next time, happy trading!

About Alvatix

Alvatix leverages Artificial Intelligence (AI) and Machine Learning (ML) to analyze market data, sentiment and more to offer AI-powered crypto trading tools and strategies.

Alvatix's recent achievements include accumulating $10M in Assets Under Management (AUM), securing a listing on Magic Square, and establishing a key collaboration with GAINS Associates. These milestones underscore the platform's growing influence and expertise in the cryptocurrency market.

Furthermore, Alvatix is actively engaged in educating the community through weekly market analysis and providing insights such as on mastering market liquidity and global macroeconomics. This underscores Alvatix's dedication to innovation, education, and its mission of democratizing wealth through AI trading technology.

You can access our platform with the free trading signals here. We showcase the historical ROIs of each trade there, you can also take a look at our top trades of February and January. Our automated trading bots have been released for a select group, read more about its performance here.


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*Disclaimer: This article is for informational purposes only and is not intended as financial or investment advice. Alvatix and its services are tools for crypto trading, and users should conduct their own due diligence and consult with a financial advisor before making investment decisions. Past performance of Alvatix's trading strategies is not indicative of future results.

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