Is bitcoin continuing its upward trend?

Peter Slagter Schrijver, spreker en analist Bitcoin Alpha, Descryptor en Satoshi Radio

27 March 2024

We reflect on a tumultuous crypto week. After a period of growth, the market corrects. The price of a large number of crypto assets declined along with the decreasing bitcoin price. The burning question on everyone's mind: is this a healthy correction? More on this in this Weekly!

This weekly in brief: 

  • Market: On March 20th, bitcoin was at $60,700, temporarily the lowest point of this correction. Since then, the price has recovered to around $70,000. A healthy pitstop in a young bull market.
  • News: This week, there was uproar over a European proposal. Anonymous wallets were said to be banned. That's not the case: you can now and in the future hold your crypto assets.
  • Behind the scenes: Senior Compliance Office Mauro Halve was asked to give a presentation and participate in a panel at the Dutch Association of Compliance Officers.

Market update

The correction that began on March 14th saw the price of bitcoin drop by 18% in six days, from $73,800 to $60,700. Since then, the price has recovered somewhat to around $70,000. The overall crypto market followed a similar pattern, with few coins performing significantly better or worse.

When we zoom out significantly and look at the chart of the past four years, we see that the current correction is taking place in the price range where the peaks of April and November 2021 also lie. We could see the past four weeks as consolidation around the all-time high of the previous bull market.

There's nothing wrong with that. It gives everyone who wants to the chance to enter and exit. Such a pitstop in a young bull market prevents a large amount of unrealized profit from building up. In the short term, a $10,000 drop in a few days can cause butterflies in the stomach, but from a greater distance, there's nothing to worry about.

We've plotted the 200-day average on the chart. An energetically rising market remains above this average for a long time. On the left, you can see the bull market of 2020-2021, during which the price remained above this average for over a year after the coronavirus dip in March 2020. Only if we were to drop to $43,000 now would we return to this average.

With the abbreviations HH and HL, we've marked a higher high and a higher low each time. This beautiful series is only at risk if we drop below $38,500. In short, we see a healthy bull market in many respects.

The chart below is the weekly chart of bitcoin. Remarkably, the price on Binance, the trading platform with the highest volume, has not closed above the 2021 all-time high for any week yet. On March 10th, the weekly closing was $68,955, and on March 17th, it was $68,353.

Formally, this correction is only over when we set a higher price than the starting point on March 14th, but a weekly closing above $69,000 is an early indication that the bulls are back in charge.

01 BTCUSD 2024 03 27 10 01 39

The cryptocurrency market as a whole has been closely following bitcoin's trajectory since the beginning of this market cycle in November 2022. Although bitcoin dominance has increased significantly, it has done so in a very controlled manner. This indicates two things: Bitcoin's price has risen faster than the average altcoin price, and we haven't experienced an alt season yet.

What about the spectacular rise of Solana, AI coins, and meme coins in recent months? They stand in contrast to other altcoins that have significantly underperformed. Since the beginning of 2024, we've seen the following losses compared to bitcoin: BSV -45%, XRP -39%, INJ -35%, and ADA -34% — just to name a few notable coins.

In the chart below, we've marked two periods where altcoins surged much faster than bitcoin. During those periods, it was almost irrelevant which altcoin you bought, as almost everything went up. However, that's not the case now. Will there ever be a true alt season again? Who knows. There's no guarantee. The market has changed a lot in recent years. Now more than ever, it's crucial to know what you're doing or leave the choice to professional asset managers.

02 BTCUSD 2024 03 27 11 03 34

News Overview

Last week, the European Parliament reached a preliminary agreement on a proposal affecting digital currencies. Various media outlets reported on it with an alarmist tone: " Your anonymous crypto wallet is now illegal." Naturally, this reporting caused quite a stir and confusion among crypto holders.

Before we delve deeper, let's clear up all uncertainties. Self-custody is not illegal. Hardware wallets are not illegal. Software wallets are not illegal. And transactions to and from self-custody are not illegal.

So, what was all the fuss about?

We often see misinformation surrounding the complex legislative procedures within the EU. Various parties are working on an extensive financial regulatory package. Part of this is the AMLR, the Anti Money Laundering Regulation. Note that this is not a crypto law. It's a general law aimed at combating money laundering and other financial crimes and is targeted at financial institutions. This includes crypto service providers.

What does the proposal say about "anonymous wallets"? In short, it states that crypto companies cannot offer anonymous wallets, just as a bank cannot provide anyone with an anonymous bank account. Crypto companies must also stay away from anonymity-enhancing tools such as privacy coins and mixers, and they must carefully examine incoming transactions. Anonymity is a signal for extra scrutiny.

Service providers that have no control over their users' funds are explicitly excluded from these rules. This includes suppliers of software and hardware wallets.

In short, the primary homework is directed at crypto companies!

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Other news:

  • BlackRock launches its first 'tokenized fund' on Ethereum. The fund is called BUIDL, an abbreviation of BlackRock USD Institutional Digital Liquidity Fund. The fund invests in cash and government bonds. Each token is worth $1, and token holders receive monthly returns in the form of new tokens.
  • The world's largest pension fund is investigating exposure to Bitcoin. The Japanese State Fund (GPIF) states that it is part of a broader initiative in response to major societal and economic changes. The fund manages $1.4 trillion in total. In addition to Bitcoin, the fund also wants to diversify into gold.
  • Goldman Sachs sees interest in crypto-related products among hedge fund clients reviving. "Many of our largest clients are active or want to be active in the crypto domain," said Goldman's director Max Minton to Bloomberg. The investment bank says it has explored investing in crypto-related bankruptcy claims itself.


3AC’s Kyle Davies on Why He’s Crypto’s Lloyd Blankfein and Why He’s Not Sorry | Unchained

Three Arrows Capital (3AC) was one of the most prominent players involved in the implosion of the crypto world in 2022. Founders Su Zhu and Kyle Davies have played a dubious role, to say the least, but have not yet been held accountable. Kyle recently appeared on Laura Shin's show to discuss this. Laura pulls no punches and provides insight into Kyle's unrealistic worldview.

Behind the Scenes

Mauro Halve at the Dutch Association of Compliance Officers

Senior Compliance Office Mauro Halve was asked to give a presentation and participate in a panel at the Dutch Association of Compliance Officers, an association with more than 600 compliance professionals and regulators from the financial sector. The members had indicated an interest in a crypto theme day. Mauro was allowed to talk about the upcoming European crypto law (MiCAR) and how it works in practice to prepare for the corresponding license application.

Want to stay up to date on the latest developments around crypto-related laws and regulations? Then follow Mauro on LinkedIn, where he posts regular updates.

Peter Slagter Schrijver, spreker en analist Bitcoin Alpha, Descryptor en Satoshi Radio

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