Bitcoin Price Action: Will Bulls See a Return to Highs?

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27 Mar 2024

BTC price attempts to challenge overhead resistance as market observers hope for a resumption of the Bitcoin ETF frenzy.

Bitcoin
BTC
$69,568
launches into the last week of March within striking distance of old all-time highs.BTC price action is displaying renewed energy as the market consolidates higher — can bulls manage a return to price discovery?
That is the best scenario on the table for the monthly close. Bitcoin’s hardwon comeback contrasts with last week’s grim mood, which witnessed precipitous losses.
The retracement from current all-time highs near $74,000 at one point passed 17%, and while still modest by bull market correction standards, it made many nervous.
This week, the landscape is different — at least so far. A CME gap to the upside has become one to the downside, and investor anticipation of a fresh attack on the highs to come is climbing, not falling.
Combine that with an inbound mining difficulty increase and classic bullish signals are plain to see.
Beyond Bitcoin, a classic set of macroeconomic triggers is waiting in the wings to potentially inject some added volatility into risk assets.
Cointelegraph takes a closer look at these issues and more in the weekly rundown of near-term BTC price catalysts.

BTC price returns to crunch resistance zone

In strong contrast to before, the weekend was mostly a success story for Bitcoin bulls.
BTC/USD 1-week chart. Source: TradingView
A slow grind higher culminated in a weekly close of just under $67,200 on Bitstamp, data from Cointelegraph Markets Pro and TradingView confirms.
While this is, in fact, $1,200 lower than the previous week, it canceled out the majority of recent losses, which saw BTC/USD reach local lows of less than $61,000 on March 20.
Now, a gap to the downside on CME futures markets is the target to watch for popular analyst Mark Cullen.
When they appear over a weekend, gaps either up or down form a common price lure, with BTC/USD “filling” them within days or even hours when the new trading week begins.
“Lets see if that CME gap gets filled in the next 24hrs,” Cullen wrote in part of a post on X, adding a chart showing what he described as “areas of interest.”
BTC/USD chart. Source: AlphaBTC/Mark Cullen
A look at market participants’ views prior to the Wall Street opening nonetheless reveals strong reservations about the strength of the Bitcoin bull market.
Fellow trader JT outlined a range of oscillators, including the Relative Strength Index (RSI), all calling for a trend reversal, with “overbought” signals present on two-week timeframes.
“Bottom line: Bitcoin is overbought on the 2-week oscillators and would need a close over $69.1K for bulls to regain momentum,” part of a recent X commentary reads.
BTC/USD chart with RSI data. Source: JT
Prior to the weekly close, however, trader Alan Tardigrade saw a different narrative present on daily RSI data. The metric, he suggested, was breaking out of a downtrend in place for much of March.
“$BTC is ready for the next week Pump,” he summarized.
BTC/USD chart with RSI data. Source: Trader Tardigrade
Analyst Kevin Svenson drew similar tentative conclusions based on another indicator, the daily Moving Average Convergence/Divergence (MACD).
Source: Kevin Svenson

Bulls hope for Bitcoin ETF renaissance

Closely tied to the spot price narrative is the United States-based spot Bitcoin exchange-traded funds (ETFs).

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These saw something of an anomaly last week, clocking five consecutive days of net negative flows for the first time in their short lifespan.
Bitcoin ETF flows (screenshot). Source: Farside
These were driven in no small part by record outflows from the Grayscale Bitcoin Trust (GBTC), reportedly impacted by moves from bankrupt crypto lender Genesis.
Now, commentators are likewise hoping for a return to “business as usual.”
“What do you think market participants are going to do tomorrow night when ETF flows turn positive again?” Quinn Thompson, head of capital markets and growth at crypto lender Maple Finance, queried at the weekend.
Thompson noted that despite the net outflows wrought by GBTC, the biggest ETF providers have retained their inflows, concluding that “new buyers are not selling.”
“GBTC Sold 31,000 BTC last week and price fell ~ 1%,” Thomas Fahrer, CEO of crypto-focused reviews portal Apollo, continued this week.

“Incredible demand to soak up that sell pressure.”

GBTC outflows. Source: Thomas Fahrer
Fahrer directly tied “cooling” GBTC outflows to a positive BTC price response to come.

PCE looms amid giant U.S. spending package

This week sees the Personal Consumption Expenditures (PCE) Index headline U.S. macro data prints.
PCE, known to be the Federal Reserve’s preferred inflation measure, follows last week’s decision not to cut interest rates.
While markets were already prepared, subsequent language from Fed Chair Jerome Powell ignited bets of successive cuts coming before the end of the year.
The latest data from CME Group’s FedWatch Tool puts the odds of a May cut at 13.7%, up from less than 10% previously. The odds for June are 66%.
Fed target rate probabilities. Source: CME Group
This week, Powell will speak again, potentially reinforcing those convictions. His March 29 conference appearance nonetheless coincides with the Good Friday holiday, on which stock markets will be closed.
“After two hot inflation reports this month, all eyes are on the PCE inflation report,” trading resource The Kobeissi Letter thus concluded in its weekly diary dates rundown.
Financial commentator Tedtalksmacro meanwhile highlighted last week’s U.S. spending package, worth $1.2 trillion, as laying the foundations for further risk-asset upside.
“Fed confirmed QT will slow soon. Rate cuts coming by year end,” part of one recent X post states.

“You need more BTC!”

Mining difficulty set to preserve record highs

Despite recent BTC price volatility to the downside, Bitcoin network fundamentals are priming themselves for upward continuation.
The latest estimates from monitoring resource BTC.com show mining difficulty holding at this week’s automated readjustment.
This will keep the difficulty at or near all-time highs of around 95 trillion, while hash rate paints a similar picture.
Bitcoin network fundamentals overview (screenshot). Source: BTC.com
Raw data from MiningPoolStats shows a new record peak of 741 exahashes per second on March 24.
Miners continue to brace for the upcoming block subsidy halving on April 20, which will cut Bitcoin’s emission per newly mined block by 50% to 3.125 BTC.
Bitcoin hash rate raw data (screenshot). Source: MiningPoolStats
Analyzing the impact of the halving, however, investor Mike Alfred predicted a mass reorganization as miners adjust to the new subsidy regime.
“We will see a major correction in global hashrate post-halving,” he concluded last week.

“There is A LOT of very old equipment on the network squeezing a last bit of profit out before they go in to the dustbin of history. The big public miners all have new equipment coming. Super profits are imminent.”

Google shows lack of mainstream “FOMO”

Crypto market sentiment as a whole may still be “greedy,” but mainstream interest already appears to be waning.
Related: Bitcoin price aims for a bullish weekly open — Will DOGE, TON, STX and FTM follow?
The latest data from Google Trends shows that after a modest spike during the recent trip to new all-time highs for BTC/USD, search intensity for Bitcoin is headed back down.
Search volume reached only a fraction of its 2021 highs, the figures show, as the average Google user shrugs off Bitcoin’s return to form.
Google search data for Bitcoin (screenshot). Source: Google Trends
The Crypto Fear and Greed Index, meanwhile, lingers just below its “extreme greed” zone at 75/100.
Crypto Fear and Greed Index (screenshot). Source: Alternative.me
For statistician Willy Woo, creator of data resource Woobull, however, the power of the Bitcoin bull market is not to be underestimated any more now than before.
Comparing Bitcoin to the S&P 500 last week, Woo drew a clear distinction between “TradFi” and Bitcoin market behavior.
“In TradFi bear markets are steep, people freak out,” he reasoned.

“In Bitcoin bull markets are steep, people FOMO.”

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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JESSE COGHLAN
MAR 25, 2024

Weekend Wrap: Iceland wants corn, not Bitcoin, Polygon zkEVM back online and more

Iceland’s prime minister reportedly wants to reallocate renewable energy away from crypto miners, a venture capital firm is raising $100 million for crypto startups, and more.
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Iceland PM wants harvests, not hash rate

Iceland reportedly wants to plant more corn and chase out Bitcoin
BTC
$69,568
miners as the northern European nation renews its focus on food security and energy stability.Cheap hydroelectric power has seen Bitcoin miners swarm to Iceland, making it both the world’s largest energy and Bitcoin hash rate producer per capita.
“Bitcoin is an issue worldwide,” Prime Minister Katrín Jakobsdóttir told the Financial Times in a March 23 report. “Data centers in Iceland use a significant share of our green energy.”
Jakobsdóttir wants to reallocate renewable electricity from crypto miners to power other industries and housing for the country’s 375,000 citizens. Icelandic Bitcoin miners reportedly use more energy than households, causing electricity shortages.
Source: @Crypto_Mags
A new proposal would see a boost to wind energy for industry use to accelerate carbon neutrality plans, but “Bitcoin and cryptocurrency, which use a lot of our energy, are not part of that mission,” Jakobsdóttir said.
Meanwhile, Jakobsdóttir said Iceland is starting to grow corn as the country was “very much reliant on imported corn.”
Farming in Iceland is “not exactly great” as glaciers cover “a large part of the country,” she said, but trade disruptions and farmer protests sparked a push to reduce reliance on imports.

Hack VC’s new $100M to fund crypto startups: Bloomberg

With the crypto market again on the rise, venture capital firms are again coming back around to crypto after their hiatus last year — and Hack VC is one of them.
The venture firm is reportedly raising $100 million for a fund aimed at seeding crypto startups, Bloomberg reported on March 23, citing people familiar with the plan.
Just last month, Hack VC raised $150 million for a similar crypto and artificial intelligence-focused fund.
Source: Hack VC
Hack also raised a $200 million early-stage crypto startup-focused seed fund in February 2022.
The crypto market has been on a run so far this year, with Bitcoin twice nailing new all-time highs in March, which has seen VC funding perk up.
Blockchain game publisher Immutable launched a $100 million fund for blockchain games last week, and last month VC firm Andreessen Horowitz (a16z) put $100 million toward Ethereum restaking protocol EigenLayer.
Bloomberg reported a $50 million nonfungible token (NFT)-aimed raise in the works at Hivemind Capital and a $69 million round for the blockchain Berachain.
Compare that to the $5.75 billion across 58 funds crypto-focused VCs raised last year — below 2022’s record year of $37.7 billion across 262 funds, Galaxy Digital reported in January.

“Rainbow staking” could combat Ethereum centralization — Buterin

Ethereum co-founder Vitalik Buterin has floated a conceptual Ether
ETH
$3,551
staking framework dubbed “rainbow staking,” which aims to address the blockchain’s centralized staking ecosystem.In a March 21 speech at ETHTaipei, Buterin acknowledged that liquid staking and “staking in general” had become centralization risks to Ethereum.
He said there weren’t enough solo stakers — those who deposit 32 ETH worth over $111,500 to be a validator — because it’s expensive and technically difficult.
Many who want to stake their ETH instead use a liquid staking protocol such as Lido — currently the most popular — which has no minimum deposits and gives users a 1:1 token to use on-chain.
The solution, to Buterin, is rainbow staking, with the idea being “you explicitly split up into two kinds of staking, and you call it heavy staking and light staking,” he said.
Buterin’s March 21 speech during ETHTaipei discussing ‘rainbow staking.’ Source: YouTube
Heavy staking is slashable — where staker’s ETH is taken from them as punishment for bad behavior — and signs all of the blockchain’s slots. Light staking, conversely, isn’t slashable and signs slots based on a lottery.
“You basically try to explicitly separate out those two and potentially require both heavy stakers and light stakers to sign off on a block in order for the block to get finalized,” he said.

“So you try to add the security of both of those approaches together.”

Rainbow staking aims to reduce reliance and provide a competitor to liquid staking protocols, but Buterin conceded that more research on the concept is needed before it goes live on the blockchain.

Polygon’s zkEVM back after 10 hours downtime

Polygon’s beta zero-knowledge Ethereum Virtual Machine (zkEVM) is back online after a ten-hour outage on March 23 due to an issue with its blockchain sequencer.
The zkEVM came back after the outage on March 23 at nearly 9:00 pm UTC, at block number 10989776.
In a March 25 X post, Polygon said its Ethereum layer 2 scaling zkEVM had resumed operations after it pulled it into an “emergency state” so its team could apply a fix.
It said a detailed post-mortem of the issue is coming “early next week.”
Source: Polygon
Earlier, Polygon said its zkEVM was down due to “an issue with its sequencer,” which organizes, batches and makes sure transactions are in order for sending to Ethereum.
The outage only impacted its zkEVM and not its toolkits like Polygon PoS or its Chain Development Kit (CDK). Blockchains deployed using its CDK were also unaffected.

Other news

Terra co-founder Do Kwon was released from prison in Montenegro as the country’s Supreme Court decides on what to do with extradition requests from the United States and South Korea.
The U.S. Securities and Exchange Commission again extended its time to decide on Grayscale’s ETH futures exchange-traded fund (ETF).