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Country Roads, Take Me Home: BTC Surpassed US$72K, ETH Crossed US$4K

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2024-03-12 | 5m

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Central Themes

• Straight up to US$72K: Bitcoin shot up to US$70K on Friday then US$71K and US$72K yesterday.

• Ethereum smashed US$4K for the first time since December 28, 2021 ahead of the Dencun upgrade.

• Crypto stocks saw red as the wider TradFi markets brace for inflation data and FOMC.

Week 10: Bitcoin Is Not The Only One To Record A New ATH

Bitcoin returned the record made in November 2021 by breaching US$68,500 on March 04, 2024. In our analysis of the event , we did mention that US$68,789 in November 2021 would be equal to US$76,329 in January 2024, and therefore Bitcoin may very well break its own record this year. For the short term a.k.a. as a matter of hours after any high, there tend to be immediate corrections to wipe up those overleveraged and/or fomo long positions, which perfectly explains why BTC fell to US$62.3K (-9%) in less than 12 hours. Regardless, funding rates across exchanges remained at insane levels of 0.06% or more , representing the unwavering bullish sentiment and thus once again bringing BTC prices to US$69,170 on the very next day. The process was repeated again and again:

• on March 05: Bitcoin made a new all-time high at US$69,170 before crashing to US$59,324 (-14%);

• on March 06: Bitcoin rose to a daily high at US$67,637 before crashing to US$62,849 (-7%);

• on March 08: Bitcoin recorded a new all-time high at US$70,083 before crashing to US$66,230 (-5%).

Country Roads, Take Me Home: BTC Surpassed US$72K, ETH Crossed US$4K image 0

As BTC constantly challenged sceptics with new ATHs, there's a reason for crypto stocks to demonstrate so humble returns compared to those of last weeks: the upcoming CPI data, which will be released later today (March 12) with current forecasts of 3.1% YoY, 0.4% MoM for the headline inflation and 3.7% YoY, 0.3% MoM for the core inflation. These numbers play a vital role in the FED's rate cut path - something that is supposed to take place this year based on Powell's recent testimony to the Congress .

Volume of GTC was on par with FBTC - both only second to IBIT - but for the same not-so-merry reason. More than US$1.8 billion flew out of GBTC last week, almost double that of W9. We again believe that's capital being reallocated to other new-born Bitcoin ETFs such as IBIT and FBTC. It's important to note, though, that ProShares Short Bitcoin Strategy ETF (BITI) saw a net outflow for the first time since February 08 on March 07, one day after BlackRock's IBIT experienced a new record daily inflow at US$788,290,000. Outflow from hedging tools and inflow for investments? Definitely not play field for bears.

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If the Father a.k.a. BTC has spoken, then the Mother (of all altcoins) has no reason to stay quiet, especially with the upcoming Dencun upgrade that should benefit all L2s built on Ethereum . The last time we saw sharp increases like this in ETH prices was way back in 2021, a really really long time ago because of Terra (LUNA) fall and FTX collapse in 2022. It had been hovering right below US$4,000 for most of the week, with funding rates close to BTC's.

Notable for the week is the memecoin frenzy : there are six memecoins in the list of Top 10 Cryptocurrencies (DOGE , SHIB , PEPE , BONK , WIF , and FLOKI ), Solana-native WIF officially entered the US$1B-market cap club , and this phenomenon is the reason behind Ethereum's sudden surge in gas fees .

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However, memecoins had to share the spotlight with AI tokens and another (rather unexpected) category, GameFi. Data shows that the market cap of GameFi tokens combined has increased by 6% on Sunday compared to the overall market's 2.2% expansion. AI tokens also brought in decent gains last week, for example GRT/USDT , INJ/USDT , RNDR/USDT , FET/USDT , and AGIX/USDT .

Setting The Tone: Monday Performance

'To the place I belong' must be Bitcoin's mantra recently. Not only did it surpass US$71,000 but the largest crypto pushed through it all the way 'til US$72,850 yesterday, and funding rates still show something much above 0.01%.

Yesterday was indeed a big day, for Ethereum easily jumped to the other side of US$4,000 only hours before blobs went live today. To know what blob is, take some time to really devour this article, where we already simplify everything you need to know about Ethereum Dencun upgrade .

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Coinbase and MicroStrategy's stocks dipped harder than the broader tech market (the NASDAQ Composite was down by 0.4%) and SP 500 (-0.1%). Demand was still good for spot Bitcoin ETFs, with IBIT showing over US$3 billion in 24-hour volume and combined volume being only slightly lower than Friday.

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