Bitcoin crossed $30K for the first time in 10 months. Can BTC hold this level — and what's next for the crypto markets?
Congrats everyone, we did it. Bitcoin crossed $30K for the first time in 10 months.
And now? What's next? Bull market incoming?
Here's a quick market update on everything you need to know.
How Did We Get Here
If you read our 2023 macro brief and the Q1 crypto market update, you will remember the outlook for this year:
- On-chain data signalized we're in an accumulation phase.
- Trading data said the market is mostly unleveraged.
- Big CT accounts were buying spot.
- Central banks were grudgingly injecting liquidity into the system.
- A few narratives like the China narrative and the LSD narrative pumped altcoins.
Here's an excerpt from our macro article:
"For crypto, all of this means that we are probably in accumulation mode in 2023. If rate cuts do arrive as early as September 2023, Bitcoin may break out of its current range this year."
But it's *checks notes* April, and Bitcoin has broken resistance at the $28K level, finally crossing the $30K mark. Bitcoin dominance is rebounding and the ETH/BTC ratio is dropping hard.
Let's unpack why that happened.
Why Bitcoin Is Surging
Every cycle Bitcoin dominance starts dropping when irrational exuberance and altcoin mania takes over. And every cycle it rebounds when the bear market hits and shitcoins get dumped.
This time isn't different.
IntoTheBlock identified a few potential reasons why Bitcoin is bouncing back in its Q1 Bitcoin analysis:
- The banking crisis and the failure of Silicon Valley Bank and other banks forced the Fed to add liquidity to the market.
- The banking crisis also fed the "Bitcoin as a store of value and safe haven" narrative.
- Investors may be trying to frontrun the BTC halving next year by getting in early.
All of these factors contributed to smart money getting into Bitcoin again. On-chain data confirms this. Long-term HODLers are still accumulating:
Compared to its realized value — the average price a Bitcoin investor bought in — Bitcoin is just slightly in the green zone:
Many other indicators confirm the same thesis. Bitcoin is in accumulation mode and smart money is still buying, not selling:
But can this trend hold or is it just a bear market rally after all? Is Bitcoin going to leave alts in the dust? Or are we getting an alt season this summer?
What's Next For Bitcoin
While nothing is certain, we can look at two indicators here: macro and technicals.
The traders remain bullish on Bitcoin. Pentoshi is bullish as long as Bitcoin can confirm its current breakout past $28K.
Cold Blooded Shiller shares the same sentiment. Hold the breakout, and Bitcoin has left its old range. Fall back into it and it will be more sideways:
Altcoins are getting a lot less love. For now, Bitcoin is the market to be in:
But does the macro support this thesis?
Well... it's complicated.
Recession seems back on the table, judging by some indicators:
The yield curve, another recession indicator is (again) steeply inverted:
That's why the macro situation seems pretty blurry at the moment. Even a recession does not necessarily mean bad news for Bitcoin. The Fed may start adding more liquidity in that case, and more liquidity is likely to benefit risk assets like crypto.
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