Portfolios Reviews & Comments - April 2024

The market is at a crossroads. The total market capitalization for the week grew very slightly: from $1,410 billion to $1,444 billion. And the Crypto Fear & Greed Index left the neutral zone (55) again and headed towards the overbought zone, reaching 77 points out of 100 possible.

Greed and fear index for Bitcoin and the largest cryptocurrencies can also speak in favor of greater caution, which since last week fell by 56 points to a value of “38”, which corresponds to the “fear” regime. Once upon a time, the correlation of traditional and cryptocurrency markets caused rejection and rejection among Bitcoin supporters. However, the situation has completely turned around in just a few years. Now what is happening in the stock market is directly linked to the prospects for Bitcoin and the entire crypto market. The growth in the yield of ten-year American bonds provokes the closure of positions, which immediately affects the crypto market. For the party to continue, both markets desperately need good news. Bitcoin needs the next Elon Musk, and the stock market needs the promise of a long, non-stop printing press. There are no guarantees in either case.

All participants in the crypto market, from retail lay investors to institutional and whales, are waiting for growth up to $ 60K, where Bitcoin will face one of the most serious tests in the current bull rally.

The Bitcoin dominance index remains at about 61%, having found a kind of balance point at this level. The greed and fear index for Bitcoin and the largest cryptocurrencies dropped several points over the course of a day to a value of "93", which corresponds to the "extreme greed" mode. The indicator has been in an overbought state, indicating a high probability of a sale, for a long time, however, the mood of market participants, greed and a propensity to buy all possible assets against the background of the continuation of the stimulus policy in the US and the growth of the stock market, comes to the fact that digital currencies continue to receive impressive make-up.

The total capitalization of the cryptocurrency market has exceeded $ 1.25 trillion. Although the Bitcoin Dominance Index fell dramatically over the month by almost 9%, all market participants consider this to be great news, since against the background of the general growth in capitalization, this indicates a high interest in altcoins. Indeed, now most of the TOP-100 coins are in the green zone. The current moment in the cryptocurrency market can be compared to the periods in the stock markets when small-cap companies outperform the giants in terms of growth. Such periods occur long before the end of steady growth.

Bitcoin is facing yet another downside momentum after failing to test $ 35k. Over the past 24 hours, the coin has lost a little more than a percent and changed hands for about $ 31,500. The reference cryptocurrency needs new triggers, but so far the news background is not enough for a confident return to the growth rails. Articles about new small investments from companies that took an active part in creating the conditions for the rally in late 2020 appear in the crypto media every now and then. Recently, news emerged that major US universities, including Harvard and Yale, have invested in Bitcoin. However, such triggers are not capable of pushing the market towards growth now.

In addition to the supporters of the growth theory up to $ 50K, there are other market participants who believe that what is happening at the moment may resemble the scenario of the end of 2017, when at first Bitcoin reached a historical maximum, then a rather short altcoin season began, and after that "crypto winter" came.

Bitcoin's success story continues. After a short pullback towards the lower boundary of $ 30K, the benchmark cryptocurrency again aims at $ 40K. Over the past 24 hours, Bitcoin has been adding more than 12% and is trading at about $ 38K. The Bitcoin dominance index remains at about 70%, while the total cryptocurrency market capitalization has again exceeded $ 1 trillion. Now this threshold level has a psychological impact on retail participants in the crypto market, confirming the course for further growth. In 2017, the crypto market was already approaching this mark, but after that a large-scale correction began, which led to crypto winter. We now see that the crypto machine is actively picking up speed around this value, which stimulates investor optimism.

If Bitcoin falls below $ 39,719 (support zones) and then drops below $ 38,700, we are in for a larger drop. In this case, the market will come under the control of "bears", which can cause BTC to fall to $ 32,000. But the BTC rate may plummet to $ 20,000. This will happen if large institutional investors who bought cryptocurrency during the crisis start selling it and fixing it profit. In this case, a sale of unprecedented proportions is possible.

Crypto market participants believe that the victory of the Democrats should be another impetus for the growth of the crypto market. A generous stimulus to the economy and the printing of new dollars should be the basis for broad asset diversification among institutional investors. Bitcoin is increasingly being hailed as the digital equivalent of gold, but in reality, we should remember that current investment in Bitcoin is a temporary parking lot in times of heightened liquidity in markets and overvalued stocks and government bonds. Non-professional retail investors still do not fully trust the current market, but at some point FOMO will enter a new stage, where it will be important not to miss the moment when the conventional “shoe shiner” talks to you about the prospects for investing in Bitcoin. Another important historical moment for the crypto market was the overcoming of the total capitalization above $ 1 trillion. In connection with the beginning of the correction, we now again see the value below the threshold, but there is almost no doubt that soon the market will confidently step over this most important psychological round level.

If you're looking for a long-term entry point for Bitcoin, don't count on a penny. You will not worry about a few thousand dollars in a non-ideal entry when the price rises to $ 100,000, $ 200,000, $ 300,000 a year later. The main bull phase has arrived. Crazy capital inflows. We are near the peak values, after which a correction is inevitable. As soon as Bitcoin surpasses $ 30,000, a negative trend can become dominant. However, one should not expect a stormy fall in the value of BTC - the correction of bitcoin will not exceed 15% of the maximum values.

Every investor has a gut feeling that the arrival of new Bitcoin whales is crucial for a sustained rally, even though there has never been hard evidence of this effect until now. There is a constant flow of new addresses entering the top 300. For example, 16 of them received their first-ever deposits within the past 30 days. Once again, this is not necessarily a new entity but an address receiving its first-ever BTC. Although it is uncommon, sometimes gaps of 50 or more days occur without newcomers joining the top 300. Coincidentally, these periods mark the end of rally periods, and a healthy correction usually follows.

Inspired by the latest moves, well-known investors speculate that Bitcoin's rise is just beginning. Financier Anthony Scaramucci, who recently invested $ 25 million in cryptocurrency through his own fund, said market participants have yet to see the impact of true diffusion among institutions. Meanwhile, there is no consensus among analysts about the future trajectory of Bitcoin. Some believe the cryptocurrency is approaching a mid-term peak amid the extreme overbought market.

In addition to technical and economic factors, it is worth considering the approaching holidays in most of the economically developed world. As December 24 approaches, trading volumes and activity in general may fade away. The overwhelming majority of investors who want to take profit have already done so. Investors who were just opening positions were also quick to do so as they approached $ 20K. However, the holiday season is not a hindrance to investment from retail investors. On the contrary, this period can be used to study investment methods as well as asset selection. With a high probability, the greatest demand from the retail side will concern altcoins. There are several reasons for this, the main one being that their price levels are psychologically more comfortable for non-professional investors. Through a simple analysis, we can come to the conclusion that most of even the top altcoins are now trading far from their historical highs, which will become a trigger to buy.

Exactly 3 years have passed since Bitcoin set its previous all-time high just below $ 20K. Most of the market participants who have caught those times now have a pleasant, but alarming déjà vu, because it was from that moment that the fall of Bitcoin began, which subsequently led to the "crypto winter". There are also differences, in 2017 the appearance of institutional investors on the market led to a sharp sell-off, as they had the opportunity to open short positions. Now it is big capital that has created conditions for a rally in the market. In addition, the rally itself started from much higher levels, doubling the price since September, while three years earlier the price increased 5.5 times over the same interval.

Robert Kiyosaki, author of the world famous bestseller Rich Dad Poor Dad, once again called for buying bitcoin and predicted the rise in the price of the first cryptocurrency. He is convinced that BTC will continue to rise to $ 50,000 amid an influx of institutional money next year. Goldman Sachs also believes that the interest of traditional companies in Bitcoin could lead to an asset of up to $ 600 billion, which will be a huge impetus for continued growth.

Institutional investors are now driving the rally in the crypto market, while their attention is now more attracted by the traditional market. The vaccination launch is one of the most anticipated events of the past year. Probably, the impact of vaccinations can be overestimated by investors, as there is a huge job of collecting statistics ahead. In addition, massive cases of complications can negate the entire positive effect. However, the market is growing again, and here the situation is somewhat similar to cryptocurrencies.

Miners have dramatically increased their bitcoin sales. According to CryptoQuant, the volume of cryptocurrency traded by bitcoin miners has grown to its highest level since the beginning of 2018, coinspot writes. Recall that 2018 went down in history as one of the most tragic stages in the development of the cryptocurrency industry. If at the beginning of the year bitcoin kept just below $ 20,000, then in December the cryptocurrency was trading at $ 3,500. The first alarming signals were recorded by observers in early December. Glassnode noted that then the flow of bitcoins to exchanges sharply increased. According to Robbie Liu, analyst at OKEx platform, some big players have decided to take advantage of the November BTC rally to capitalize on the positive trend.

Bitcoin strengthened its decline at the beginning of Wednesday, falling at the moment to the level of $ 18,000. One of the reasons for the negative dynamics of BTC could be a negative outlook for shares of MicroStrategy, which invested in bitcoin. Since the beginning of the week, the first cryptocurrency has already lost more than 5%. MicroStrategy began investing in bitcoin in August 2020 and during this time formed a position worth $ 771 million for an investment of $ 475 million. The company added the last $ 50 million last week, when bitcoin was already trading above $ 19,000. In addition, it intends to issue convertible bonds , with the help of which he expects to attract another $ 400 million to invest in bitcoin. Experts consider the recent rally in stocks to be overheated and see progressive risks in the story that unfolds after the announcement of a $ 400 million convertible bond to buy even more bitcoins.

Today's BTC price is about 6-9 months ahead of the fundamentals of the largest cryptocurrency. The bitcoin rate is overvalued by 50%, but this does not mean that we will soon fall.

Bitcoin's rise to new highs comes amid a surge in activity on OTC platforms. According to The Block, Genesis trading company OTC volumes are 6 times higher than the 2017 record levels. Since then, there have been more financial institutions in the OTC market, which have become the driver of the current rally.

The RSI reflects a much more moderate picture, moving away from the overbought area. If Bitcoin can close the week above $ 19K, it will be possible to pre-give the victory to the bulls. If Bitcoin successfully passes the process of consolidation around interesting levels, in the near future we will see continued growth and the cherished overcoming of $ 20K.

The significance of the new historical high cannot be underestimated. Many skeptics publicly rejected bitcoin because it could not reach its maximum, despite such favorable conditions in macroeconomics. This is another confirmation of the longevity of bitcoin.

While the crypto market continues to show resilience, Bitcoin ignores overbought technical indicators, and buyers come to the coin's rescue every time the bears make another attempt to push BTC down, caution is advised. At the moment, Bitcoin may be undergoing a consolidation process near occupied levels, however, the inability to show continued growth in the short term may still result in a broad correction, which can now cover all altcoins that have risen so much in price in recent years.

Miners' revenues on November 18 alone amounted to about $ 21 million, deVere Group publishes the results of surveys, where most of the large investors plan to buy leading cryptocurrencies. Deutsche Bank marks the rise in Bitcoin and the fall in gold, linking the two. Bitcoin's hashrate is actively pursuing past highs. Everything in general creates a sense of the possibility of continuing growth no matter what. Nevertheless, you should at least be careful, as sooner or later the market will begin the balancing process.

At the moment, Bitcoin will have to pass a serious test of strength. Although the coin is at very high levels, technical indicators are signaling extreme overbought. Thus, the index of greed and fear for Bitcoin and the largest cryptocurrencies reached the value “94”, which corresponds to the “extreme greed” mode. Of particular concern is the fact that the indicator was at these highs at the end of June 2019, when the crypto market passed the peak of the rally and began a correction. In addition, the RSI is at its highest levels since June 2019, when there was the last long-term correction after an advance. These are the factors against the continued growth of Bitcoin. However, until the correction starts, market performance is impressive. Thus, the total capitalization of the crypto market exceeded $ 500 billion. It is worth noting that this threshold was exceeded only during the historic rally of the crypto market in 2017. Bitcoin's dominance index is also at a very high 66.2%. In December 2017, it was about 63%, after which it began to decline rapidly due to the growing popularity of altcoins. Currently, the main focus is on Bitcoin, however, as the mention of cryptocurrencies in the media grows, interest in altcoins will begin to return, as retail investors will look for options for successful investment at relatively low price values.

In a sense, we are now seeing a situation similar to the stock market in the context of Bitcoin. Everyone understands that the shares are overbought, but the fundamental conditions are such that buyers are still there, and sellers are in no hurry to exit. Over the past day, not only Bitcoin has been growing, but almost all altcoins. The most impressive indicators are XRP and Litecoin, which jumped in price by 11.5% each. Coins from the TOP-100 are also almost all moderately in the green zone. In addition, demand is returning to DeFi again. Thus, the coin yearn.finance (YFI) grew by 12% in a day and again surpassed $ 20K. The total capitalization of cryptocurrencies has grown over the day by almost $ 13 billion to $ 475 billion, getting closer and closer to an important threshold psychological value.

The most important factor supporting Bitcoin is the integration of cryptocurrency into PayPal. Clients of the service in the United States have already received the opportunity to use cryptocurrency with a limit of $ 20K per week. Questions so far are raised by the fact that coins purchased on the platform will not be able to leave it. Probably, the company had to go for restrictions to get the approval of the regulator. Actual use will show how convenient the new tools will be in the service.