The cryptocurrency market finished the week on solid footing as Bitcoin (BTC) continued to consolidate above $61,000 while traders took the pause in BTC’s ascent to focus on the altcoin market, with a focus on meme coins and artificial intelligence projects.
Stocks managed to return to their winning ways on Friday after Thursday’s PCE data showed inflation continued to cool, which at least temporarily eased concerns that the Federal Reserve would keep interest rates higher for longer. Future inflation readings will continue to be a point of focus for investors, and some analysts warn that the Fed's next move could actually be a rate hike if the cost of living starts to rise again.
At the market close, the S&P, Dow, and Nasdaq all finished higher, gaining 0.80%, 0.23%, and 1.14%, respectively.
Data provided by TradingView shows that Bitcoin spent the day steadily climbing from a low of $60,800 in the early morning to a high of $63,270 in the afternoon.
BTC/USD Chart by TradingView
At the time of writing, BTC trades at $62,875, an increase of 2.65% on the 24-hour chart.
Institutions put a floor of support under Bitcoin
Sergey Nazarov, the creator of Chainlink (LINK), recently called the launch of spot Bitcoin exchange-traded funds (ETFs) a “watershed moment” for the crypto industry as it marks the beginning of a massive influx of capital from global finance.
Nazarov made the comments during an interview with Bloomberg TV on Tuesday, saying the “net new buyers” of this bull market cycle are institutional investors from around the world, who will now be looking for other ways to access digital assets following the success of the Bitcoin ETFs.
“Historically the way that this has evolved is that net new buyers drive more adoption and market cycles,” he said. “And I think the question to ask is, ‘Who are the net new buyers in this cycle?’ The net new buyers are the global financial system, which is a very big group of net new buyers.”
He linked the BTC ETFs to an “initial offering that allows the global financial system to have investment rails, payment rails, and ways to put capital towards cryptocurrency and Bitcoin within structures they find comfortable for them and normal and something they can do from a risk point of view.”
“So I think if you look at the total net new market that’s opening up through things like ETFs and you do the basic arithmetic on that, then even within certain conservative estimates, you can see that there’s still a lot more value that can flow into not only Bitcoin ETFs but other cryptocurrency ETFs,” he said. “And in my opinion, that’s really just the beginning because the next stage is then asset tokenization where banks see all these inflows into ETFs and then they make assets to compete with the ETFs or to get some of that capital.”
Nazarov said the regulatory approval of a Bitcoin ETF has made institutions more comfortable with the digital asset class as they can now invest in a manner they are familiar with.
“I would say it’s a watershed moment where the top asset managers in the world, the biggest asset manager, many of the other large asset managers have gotten to a level of comfort with the asset,” he said. “And that watershed moment is basically a way for a very large market to access cryptocurrency, and the size of that market isn’t fully understood by even the average consumer or some of the other institutions. I think it’s really quite a massive market.”
“So it is a watershed moment and it is really the global financial market being part of cryptocurrency and blockchain technology in a way that didn’t exist before,” he concluded.
According to pseudonymous X user Plan B, creator of the Bitcoin stock-to-flow model, the recent run-up in BTC price means that the accumulation period has ended, and those who wish to buy from here on out will have to do so in a volatile, bull market environment.
?RED DOT !!
Accumulation phase has ended: no more easy buying opportunities in orderly and slowly increasing markets.
Bull market has started. If history is any guide, we will see ~10 months of face melting fomo: extreme price pumps combined with multiple -30% drops. Enjoy!? pic.twitter.com/8MyZJUSUlb— PlanB (@100trillionUSD) March 1, 2024
For those looking to time a potential entry, market analyst Jelle said pullbacks of “±20-25% will be the sweet spot for dip-buying.”
Corrections are an essential part of a #Bitcoin bull market -- but with each passing cycle, the dips become shallower.
This cycle, it looks like ±20-25% will be the sweet spot for dip-buying.
Your job is to be ready to take advantage when it comes. pic.twitter.com/xrI7iKfiPR— Jelle (@CryptoJelleNL) March 1, 2024
Meme coins show altseason is in full swing
It was a mixed but overall positive day for altcoins as the large majority of tokens in the top 200 recorded gains to end the work week, led by meme coins and AI-related projects.
Daily cryptocurrency market performance. Source: Coin360
FLOKI (FLOKI), dogwifhat (WIF), and Pepe (PEPE) rallied the meme troops to post gains of 61.8%, 51.5%, and 44.9%, respectively, while Ocean Protocol (OCEAN) climbed 30.1%, and SingularityNET (AGIX) gained 23.65%. Portal (PORTAL) was the biggest loser with a decline of 14%, followed by losses of 5.74% for Filecoin (FIL) and 5.35% for Aptos (APT).
The overall cryptocurrency market cap now stands at $2.33 trillion, and Bitcoin’s dominance rate is 52.9%.
