Market Analysis March 22nd, 2024
Bitcoin and other assets dip, finding correction, following all-time highs.
Bitcoin reached a new record of over $74,000 last week and has since corrected, finding resistance around $62,500. This is predicted to be a short-term correction that would seek a low of around $60,000. Despite this slight dip, Bitcoin is still promising to many investors as it sees record daily inflows from spot exchange-traded funds (ETFs). Individual retail investors are increasing their involvement, amassing approximately $36,640 Bitcoin valued at over $2.5 billion within the previous week, which has been a positive sign for the industry.
From a more technical perspective, Bitcoin is exhibiting growth within an upward trend channel over the medium to long term. This suggests growing confidence among investors and suggests a sustained upward trajectory. On the contrary, if the market does respond negatively, the currency is bolstered by support around the 40000-point mark. It’s worth noting that the Relative Strength Index (RSI) displays a negative divergence against the price, signaling a potential fall and correction. Nevertheless, the overall technical assessment for Bitcoin remains positive in the medium to long term. A common belief is that investors are holding off on increasing their investments in cryptocurrencies until after the U.S. Federal Reserve’s monetary policy meeting on March 20, even though it’s widely anticipated that interest rates will stay the same. Confident analysts suggest that Bitcoin’s potential upward surge in 2024 hinges significantly on the Federal Reserve shifting from a restrictive to an accommodative monetary approach.
A notable coin to both mention and monitor this week is Solana. Last week, Solana set records, hitting all-time highs at $210 and a market cap of around $92 billion. This was not sustained, though, as Solana found a correction and fell over 15% earlier this week, and at the time of writing, the market cap fell to about $75 billion. The skyrocketing popularity of SOL native altcoins such as DogWifhat and BOME drives part of this surge. With significant increases in the total value locked (TVL) within its DeFi protocols, Solana has captivated the attention of crypto enthusiasts of all levels.
However, Solana altcoins are facing scrutiny as some projects offer presales. According to a recent investigation by Twitter personality and analyst ZachXBT, over $122 million has been raised for 27 different Solana-based projects’ presales in the last week alone. These presales began around March 12th and are receiving scrutiny solely based on their reputation and unreliable nature. Investing in these presales is incredibly risky. Other chains are starting to copy the same presale model, and many are cautioning that this is not a sustainable way to launch projects. Amid all the positive and negative chatter, most assets look promising in the mid- to long-term projections.
FOMC Meeting and What It Means For Crypto
The FOMC meeting turned out to be more dovish than expected, with 3 cuts this year. Although the long-run equilibrium interest rate is expected to be 10bps higher, the long-run inflation expectation is adjusted higher even more, by 50bps. This is very bullish for crypto. The next checkpoint is $69,000 to $70,000. Stand firm, and then we will see the opportunity for the Bitcoin price to head to $80,000 very soon. Additionally, gold just made an all-time high post-FOMC meeting. We have strong reasons to believe that digital gold will follow suit very soon. Seeing ETF inflow and outflow data is just a waiting game, although looking promising, once ETF inflow resumes, so will the upward trajectory.
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