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Weekly Market Update: Bitcoin ATH Within Reach

In this weekly crypto market update, we take a good look at Bitcoin's recent rally hinting at a possible ATH within the horizon. Stay tuned for more updates in the crypto space and other macro economic developments from around the world.

Posted March 6, 2024

HVC Market Update Cover Week 10 2024
HVC Market Update Cover Week 10 2024

Let’s not mess around, Bitcoin is up 25% this week and got within $50 of its All Time High ( ~69k USD). Accordingly, 98% of all Bitcoin holders are in profit. Massive, just massive. We should caution that, despite the hype, price pullbacks are normal and should be expected. 

The catalyst for this price movement continues to be the spot ETFs which continue to break records and hoard BTC away at a stagger rate. We are seeing a second catalyst with the return of more active retail consumers who are driving volume when the ETFs are closed. There is obviously renewed interest as new users are flocking into the ecosystem. Success begets success…

Off the back of this, the entire crypto complex is benefiting as the altcoin cycle kicks into gear and traders seek out higher yielding trades. Ethereum volumes are way up and we are seeing that reflected in a gas fee spike, as well as the amount of ETH burned. ETH is strongly deflationary at present. The Dencun upgrade is 2 weeks off and this should help. 

In the wider crypto ecosystem, institutional interest is increasing with more companies offering products and applying to get into the system. There are also a number of legal spats with the SEC regarding its potential overreach and ‘enforcement by sanction’ approach. 

In wider economic news, the PCE inflation indicator for the US showed a continued decline, but there were some hot areas which will need watching. Manufacturing PMI surprised the market and was in contraction.

In Europe, CPI was down across the union and the trend looks good. However manufacturing, as measured by PMI, makes grim reading. At the moment they have a services led recovery underway. 

In Asia, India continues its impressive run and is the clear stalwart. China’s property woes continue and their population challenges were starkly laid bare. 

Locally, Australian CPI continued its downward trend, while in New Zealand mortgage distress is at a 7 year high. 

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With the impressive run in asset prices this week, market sentiment has increased significantly from last week as we moved into even deeper into extreme greed territory. 

Screenshot of crypto fear and greed index for March 6 2024.

Highlights this week: 

  • Another week, another slew of impressive gains across the board for the top 30 assets. Everything is moving.
  • As noted last week, we have a much more balanced buy-sell flow by value at present. 
  • Delving deeper it is clear that we have a smaller number of sells at higher values indicating that some of you are taking profit. 
  • We continue to see greater uptake of the Swaps function, with ETH being the most swapped out asset. BTC and NZDD are the two most common destination coins for settlement. 
  • At the time of writing BTC and ETH have both pulled back slightly, but ended the week up 11%, BNB was flat whilst SOL had a very solid week, up 24%.
  • Shiba Inu (SHIB) went parabolic this week, up 245% to be our best performing assets. A lot of memecoins had great weeks. 
  • Monero (XMR) continued its slide as it continues to be delisted across the ecosystem, it was down 13%. 

View all top gainers: Visit the top gainers page to find out more.

Highlights from the crypto space

While we’ve been talking a lot about the ETF’s, it’s important to note that some of the price action has been driven by retailer investors too. 

Like the 5% price jump that happened between the close and open last week. Further evidence of increasing retail demand was the small glitch Coinbase experienced due to a greater than 10x volume increase. 

IntoTheBlock reports that more than 97% of BTC holders are now in profit and we are adding a lot of new wallet addresses to the network.

Trading view chart of BTC vs USD

Having said that though, it’s hard to ignore that the ETFs continue to suck available Bitcoin out of the market at a staggering rate. The ETFs keep on breaking records too.

BTC purchased by ETFs vs new Bitcoin produced by Miners

And as one of our staffers reminded us, we are still 6 weeks away from the halving event

There is a new BTC whale, who has been buying 100 BTC since November 2022. There is plenty of speculation about who this might be including the possibility that it’s a government. 

A while back we wrote that Fidelity was accepting a small crypto allocation into its conservative portfolio. Yesterday they bumped it from 1%-3%. 

Comparison chart of ETF Funds

Blackrock took that a massive step further at a customer event recommending a 28% allocation!!!! Bank of America and Wells Fargo have started offering the ETFs to their wealthier clients. 

Despite all of this, Glassnode reports that since October, plenty of people have been shorting (betting against) BTC price appreciation and are getting liquidated. 

Kraken unveiled its institutional custody solution so it can get some of that Coinbase action. 

Hidden in all the noise, Ethereum staking has made a massive rebound. And the network quietly burned 120 000 ETH due to the increase in activity.

Screenshot of ETH Supply

Staying with Ethereum, the core developers have confirmed that the Dencun upgrade will go live on March 13th. If you have traded recently, you will know that gas is high and it is believed this will help. 

Other notable highlights from the crypto space:

  • Ripple was accused by the SEC of using bots to boost the price of XRP back in 2015/16. 
  • Uniswap introduced limit orders to their trading suite. 
  • Gemini appears to have reached a settlement with the New York regulator and will be returning $1.1bn in funds to Gemini Earn customers. 
  • Cross chain messaging platform Wormhole is enabling native token transfers. 
  • 13 State Attorney Generals are warning that the SEC overstepped, backing previous claims from crypto companies. 
  • The Nigerian Government has reportedly fined Binance $10bn and imprisoned some local staff because ‘it is affecting the local economy ‘ and currency. 

And that wraps up our highlights from around the crypto space. Stay tuned below for other macroeconomic updates from around the world.

What is going on in the world of Finance … 

Illustration for HVC Macro news update

🌎 Macro news TLDR: …PMI’s mostly in contraction 

U.S. economic news

US PCE inflation came in at expectation for January and was 2.8% annualised. Meanwhile people on benefits fell in the US this week.

Residential property remains very subdued due to the 30 year mortgage dynamic continuing to play out. US manufacturing PMI unexpectedly fell in February to 47.8

Meanwhile in Europe….

Inflation indicators for many parts of Europe are showing a continued easing of CPI for February. This was later supported by the EU number which came in at 2.6% annualised. Euro zone manufacturing PMI for February dipped to 46.5

Britain did marginally better with their manufacturing PMI coming in at 47.5, up on January’s number. The European Commission is proposing to move into ‘War Economy Mode’, and take more responsibility for its defence. This is said to be in response to the Russian invasion, but likely also to be frontrunning the US election result. 

Despite nearly 2 years of sanctions, Russia posted some impressive GDP data, up 4.6%. President Putin made some overt threats of nuclear expansion, probably in response to the French’s comments that nato troops may enter the Ukraine war. Tit for tat.

And in Asia Pacific…

We’ve discussed the challenges China faces at a demographic and population level before. But putting it in context it’s massive. South Korea is in a similar situation. 

Screenshot of Chinese population decline

Chinese developer Country Garden received a liquidation petition, and Deutsche Bank filed to liquidate a Hong Kong developer. 

This won’t help rebuild confidence in the property market. China’s manufacturing PMI posted its 5th month of contraction in February, coming in slightly down on January at 49.1

Despite this, Chinese Premier Li Qiang announced an ambitious 2024 economic growth target of 5% backed by some yet to be announced stimulus. He did acknowledge that this target will be ‘ hard’ to achieve. Analysts are using another word, politely “ hopium”. 

India’s Q4 GDP growth came in significantly above expectations at 8.4%. This was up on Q3 of 7.6% and means the annual GDP was revised up too. India’s February manufacturing PMI came in at 56.9. 

Booming is the term that comes to mind. Japanese industrial production was a disappointment as it declined 1.5% year on year. No surprise that manufacturing PMI was down too. Consumer spending is holding up though. 

Australian CPI for January was unchanged at 3.4%, and was lower than the expected 3.6%. In New Zealand, credit agency Centrix is reporting that mortgage arrears are at a seven year high. 

Stats NZ report that building consents for January were down 28% on last year. The Government deficit for the 7 months to January was $3.7bn, slightly higher than forecast due a weak tax take. 

That’s a wrap for this week. 

Stay tuned for the next update.

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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.

Last updated March 6, 2024

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