(Kitco News) – Analysts warned that the crypto market would be volatile in the wake of Bitcoin (BTC) entering price discovery after hitting a new all-time high, and Friday’s price action didn’t disappoint on this front as Bitcoin briefly fell below $66,000 only to reverse course and spike back above $70,000 as the day progressed.
Stocks also fell under pressure early in the trading day, but unlike Bitcoin, were unable to recover from the early slide as this week’s hot inflation prints have traders concerned about what the Fed will do regarding interest rates at next week’s Federal Open Market Committee (FOMC) meeting.
The CME FedWatch tool shows that the market isn’t expecting a rate cut next week, and only gives an 11% chance for a rate cut in May, while the odds of a cut in June have slipped to 56%.
At the market close, the S&P, Dow, and Nasdaq all finished lower, down 0.65%, 0.49%, and 0.96%, respectively.
Data provided by TradingView shows that after hitting a new high above $73,800 on Thursday, heavy selling dropped the top crypto to a low of $65,565 early on Friday before dip buyers halted the pullback. Bulls managed to reverse the momentum and pushed the top crypto back to $70,670, and at the time of writing, BTC trades at $68,580, a decrease of 1.5% on the 24-hour chart.
BTC/USD Chart by TradingView
ETFs drive the crypto bull market
“This week marked yet another smashed Bitcoin ETF record, with $1bn in net inflows on Tuesday, 12 March,” said analysts at Ryze Labs. “This was primarily led by new all-time-high inflows of $849M into Blackrock’s $IBIT.”
“We have also begun to see more institutional adoption of Bitcoin ETFs, with $1.7tn Patient Capital’s SEC filings showing changes to allow up to 15% exposure of its Opportunity Trust Fund, while Blackrock submitted similar filings to allow exposure within its Global Allocation Fund,” they said. “On the other side of the Atlantic, the London Stock Exchange announced they would start accepting Bitcoin and Ethereum exchange-traded notes (ETNs) applications in Q2 2024.”
“With the bull market heating up and market participants calling for all-time highs, we look towards the Global Liquidity index as our north star,” the analysts said. “Crossborder Capital reported a new record high of $170.95 Trillion, albeit noting that the pace of expansion has slowed.”
“As for trading volumes, we note that Coinbase Bitcoin spot volumes have surpassed their 2021 high of $1.9Bn, while Robinhood reported a 10% increase in crypto trading volume in Feb 2024, back to levels last seen in mid-2022,” they added.
MN Trading founder Michaël van de Poppe provided analysis on the Bitcoin pullback from a technical standpoint, nothing that Friday’s pullback is a “Valid correction, which is normal.”
From a technical standpoint for #Bitcoin;
- Lower volumes on the upwards grind
- Combined with a bearish divergence
Valid correction happening, which is normal.
The chances of the pre-halving peak to be finished are there.
Ultimately, Altcoins to rally on the horizon. pic.twitter.com/KGe8xCdpnO— Michaël van de Poppe (@CryptoMichNL) March 15, 2024
“Don't be afraid; we're at the start of a bull cycle. Enjoy the dips,” Poppe said. “I mentioned it a few times, but you don't chase green candles in the markets. You are eager for days like today. Eager to hunt the corrections, because that's when you're getting your edge. #Altcoins down 10-15%? All right, let's scale in some.”
Market analyst Rekt Capital also suggested that the bull market is just getting started as history shows that a bull market top has, on average, occurred 266-315 days after Bitcoin surpasses its previous all-time high.
#BTC
Whenever Bitcoin has broken its old All Time Highs...
It would perform a Bull Market Top 266-315 days later
Bitcoin broke its old All Time High only 7 days ago
The Bitcoin Bull Market Peak is still far away$BTC #Crypto #Bitcoin pic.twitter.com/aZBLJWXv01— Rekt Capital (@rektcapital) March 15, 2024
But in the short term, Rekt Capital warned that further downside is possible as “Bitcoin is slowly approaching the ‘Danger Zone’ (orange) where historical Pre-Halving Retraces have begun.”
“Historically, Bitcoin has performed Pre-Halving Retraces 14-28 days before the Halving,” he said. “Currently, Bitcoin is 33 days away from the Halving.”
Altcoins mirror Bitcoin’s volatility
The turnaround in Bitcoin’s price late on Friday helped lift many altcoins out of the red, but overall, it was a down day as the majority of tokens in the top 200 recorded losses.
Daily cryptocurrency market performance. Source: Coin360
Solana-based DeFi protocol Raydium (RAY) led the gainers with an increase of 27.4%, followed by a climb of 24.8% for Jupiter (JUP), and a gain of 21.6 for for Echelon Prime (PRIME). dogwifhat (WIF) was the biggest loser, falling 12.1%, while Rocket Pool (RPL) declined 11.6%, and Livepeer (LPT) lost 11.3%.
The overall cryptocurrency market cap now stands at $2.65 trillion, and Bitcoin’s dominance rate is 51.9%.
