Dear subscribers,
In this version of Uncharted: Distilled, we will analyze bitcoin’s run to $47k and determine if the retrace, late this week, is a healthy setback before a continued move up. To do so, we will deep dive into bitcoin’s structure and resurgent demand. For the full, in-depth analysis be sure to check out Uncharted #12.
Let’s dig in!
Summary
Uncharted #12 kicks off by comparing risk-on assets’ performance to risk-off and later transitions to capital flow into bitcoin and spreading into ethereum and altcoins.
After trading for the better part of 2022 in the $38k-$42k range, bitcoin broke out and edged towards the new resistance level at $48k. However, equities logged the first losing quarter in two years accentuated by a March 31st dip, and bitcoin followed.
Bitcoin is forming a new trading channel with the old resistance level at $45k likely forming the new support. The March 31st to April 1st correction seems to agree with this range, with BTC rebounding from a low of $44.5k.
Week over week demand for bitcoin resurfaced as the price made its way towards $47k with significant inflows, which also spread into riskier altcoins.
The ETH/BTC pair broke its downward trend as ethereum outperformed bitcoin in the previous 7 days (+9.62% and +5%, respectively).
Spending behavior eased for bitcoin and ethereum, reducing downward pressure on the prices.
Bitcoin’s spot volume gained ground, driving the futures-to-spot volume ratio below the 52-week average. This underlines that the current bitcoin price move is spot-led.
Investors positioned themselves on the long side in the derivatives market, increasing futures and options open interest.
A flat yield curve and low consumer confidence and sentiment indicated a potential recession, which is also a risk factor for bitcoin.
Swissblock’s signals show an optimistic outlook as the risk of a pronounced drop subsided and capital is flowing into riskier altcoins. Nevertheless, caution is advised due to the correlation between bitcoin and US equities.