Cryptocurrency

Bitcoin maintains resilience in face of continuing market uncertainty

advertisement

CoinDesk Consensus

TLDRMore

  • Bitcoin has emerged from a potential bear market, according to its realized price cohort.
  • Record-breaking BTC options expired Friday.
  • On March 14th, the US government sold 9,861 BTC, leaving about 41,490 BTC.
  • US PCE data slightly below expectations
  • EU core inflation hits all-time high
  • UK house prices suffer biggest drop since 2009
  • Deposit flight slows down US bank accounts

we

bank panic slows down

More than two weeks have passed since the failure of Silicon Valley Bank, but we have also seen the ripple effects on other regional banks. However, the full extent of the fallout and potential contagion is yet to be seen.

Over the past two weeks, depositors have withdrawn about $240 billion of their deposits and moved them into government bonds and money market funds to secure higher yields. However, this week’s deposit outflow he has dropped to $66 billion, which may indicate that the panic is waning.

Weekly changes in the money market: (Source: Investment Company Research Institute)
Weekly changes in the money market: (Source: Investment Company Research Institute)

PCE data dropped slightly

US core PCE data were below expectations. However, it is still considered hot and may be too hot for the Fed’s liking. His next FOMC meeting he won’t be until May 3rd with either a suspension or a 25bps rate hike at 50/50. Many macro indicators are yet to come before this meeting. Unemployment data and CPI.

Fed Rate Hike Probability: (Source: CME)
Fed Rate Hike Probability: (Source: CME)

EU

sticky core inflation

CryptoSlate said this week that core inflation is much harder to bring down than CPI/headline inflation. EU core inflation hit a record high he reached 5.7%. At the same time, headline inflation was 6.9% below expectations. Headline CPI drops and sticky core CPI drops will be short-term narratives.

EU Inflation: (Source: True Insights)
EU Inflation: (Source: True Insights)

England

houses are starting to turn

UK house prices recorded their biggest annual decline since 2009 as further headwinds hit the property market. Here are some reasons: Rising interest rates, double-digit inflation, and the impact of further taxation on landlords who buy and rent as the population ages.

After almost a year of downward pressure on the real estate sector, the RICS survey suggests more trouble as it hits a 14-year low.

However, the US housing market is beginning to stabilize, with the average 30-year mortgage rate dropping to 6.45%. However, the UK is mostly short term interest rates and usually he is a 2 or 5 year mortgage. These he expected to have differences in the two housing markets.

Housing Prices: (Source: Nationwide and BOE)
Housing Prices: (Source: Nationwide and BOE)

Bitcoin

Bitcoin Stubborn and Q1 Highlights

  • Bitcoin hashrate continues to hit all-time highs.
  • Record amount of stablecoins leave exchanges and convert to Bitcoin
  • Since the fall of SVB, self-management has increased.
  • ETH/BTC Has Dropped To New Lows
  • Options contracts hit all-time highs and futures contracts hit new lows.
  • Declining order books raise liquidity concerns.
  • Liquidations Continued As Investors Continued To Take The Wrong Side Of Bitcoin
  • The introduction of ordinals has given Bitcoin a new life

my thoughts on Q1

Bitcoin surges 70% in Q1 2023, with price above $28,000. This is in a very challenging environment of continued rate hikes, bank turmoil and new liquidity programs being developed by central banks.

The Federal Reserve will continue to raise interest rates as much as possible while providing as much liquidity to the market as possible until something most likely breaks. As we have learned, Bitcoin is most prone to liquidity and balance sheet expansion.

Bitcoin foundations and users are tested to the fullest. We’ve seen record hash rates, 1 GB mempools, ordinal explosions, and small banking crises. On-chain indicates an imminent bull market and volatility in the macro environment will only get worse. Bitcoin will thrive in this environment in the long term as trust between governments/central banks and people continues to erode.

Bitcoin Quarterly Returns: (Source: Coinglass)
Posted In: Featured, Macro

Related Articles

Back to top button