An Early BTC ATH Switches Up Halving Trend, ETH Shows Mighty Market Resilience, and Memecoin Mania Returns

Takeaways

• BTC ATH breaks historical four-year halving cycle trend: Bitcoin (BTC) broke above the $69,000 mark this week, setting a new all time high of $69,324 on Tuesday morning. Despite common consensus of a post-halving bull run in the cards, like others that occurred in past four-year cycles, the market appears to be responding positively to the upcoming BTC halving and moving earlier than anticipated.
• ETH holds firm despite sell off and ETH ETF delays: A sell-off following the BTC price run, as well as the SEC’s announcement to delay the decision deadlines on the spot Ethereum (ETH) ETF applications from Blackrock and Fidelity, had little impact on the price of ETH, with the market focusing on the anticipated launch of the network's Dencun upgrade, which is set to go live in the coming days.
• Michael Saylor's MicroStrategy is looking to raise $600M to buy more BTC: MicroStrategy (MSTR) has announced plans to raise $600M by selling convertible debt in a private offering, for the alleged purpose of acquiring more bitcoin, taking advantage of the recent price run, and adding to its 193,000 BTC stack.
• Memecoin mania is back: Momentum gathered for the six memecoins currently populating the top 100 list of cryptos by market cap, with multiple triple-digit percentage gains across the board, made up of DOGE, SHIB, PEPE, BONK, WIF, and FLOKI. Coinmarketcap data currently show the aggregate market cap of all memecoins standing at approximately $55B. The flurry of activity particularly across memecoins may suggest retail investors are beginning to return to the market or new retail participants are entering the market.
• US interest rate cuts on the horizon: Federal Reserve Chair Jerome Powell told House lawmakers on Wednesday that interest rate cuts are likely "at some point" in 2024, but not in the near future.

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BTC Soars To Reach a Record High

BTC hit a new all time high (ATH) this week after breaking above the $69,000 mark on Tuesday morning, setting a new high of $69,324. Before this week, the last time BTC set a record-setting price was November 2021. This marks the first occasion in which the price of BTC has set a new ATH before an upcoming BTC halving event. In previous cycles, new highs have been reached post-halving, which suggests a possible change in market conditions and a move away from the historical investment patterns related to the traditional four-year halving cycles.

The excitement of new highs was short-lived however, as many market participants took profit, including one miner who cashed significant holdings including some bitcoin that he held as early as 2010. Prices tumbled further later in the day, as a cascade of liquidations that totaled $1.1B over a 24-hour period sent the price of Bitcoin below $60k, according to Coinglass data. Given the steep run-up in prices over the past few weeks and skyrocketing derivative funding costs with open interest growing, the sharp correction wasn't a huge surprise and can be seen as a healthy recalibration of the market, allowing for more sustainable price appreciation going forward.

Funding rates have since come down significantly, and the price of BTC has returned to the $66k level. The decrease in annualized funding rates to below 20% from previous triple-digit figures suggests a market reset, potentially opening the door for a more stable and long-lasting move to more record highs. Meanwhile flows into the BTC ETFs continue to show strong demand, with over $1B of inflows since the start of the week.

ETH Shows Mighty Resilience Following Market Sell-Off

The price of ETH has shown huge resilience following the recent sell-off across the crypto market. Despite briefly dropping from $3.8K to $3.2K in just a few hours on Tuesday, the price has since rallied and surpassed its recent high to touch $3.8K by Wednesday morning.

ETH has been experiencing positive momentum recently, in part, due to the potential approval of the first spot ETH ETF anticipated to launch later this year. However, the Securities and Exchange Commission (SEC) announced on Monday that it would be delaying any decision on the applications from Blackrock and Fidelity. This was widely expected and resulted in little impact on the price of ETH, with the market more focused on the anticipated launch of the network's Dencun upgrade which is set to go live on Mainnet on March 13th. The upgrade aims to address issues around scalability by introducing proto-danksharding in an attempt to increase transaction processing speeds and make transactions more cost effective.

One of the Largest Accumulators of BTC Is Filling Their Bags

MicroStrategy (MSTR), a company that provides business intelligence, mobile software, and cloud-based services, which is helmed by founder Chairman Michael Saylor, announced on Tuesday that it plans on raising $600M by selling convertible debt in a private offering.

The company plans to use the proceeds of the raise to acquire more BTC and for general corporate purposes. Microstrategy has been one of the largest accumulators of BTC in recent years and currency holds 193K BTC.

Memecoin Mania Returns

Memecoin mania returned this week in what appeared to be a precursor for the inevitable broadening of crypto market participants. Six memecoins currently populate the top 100 list of cryptos by market cap, with multiple triple-digit percentage gains across the board, DOGE, SHIB, PEPE, BONK, WIF and FLOKI.

Coinmarketcap data currently show the market cap of all memecoins standing at around $55B. The flurry of activity across memecoins may suggest retail investors are beginning to return to the markets, with a potential rotation into other sectors of the market possible following the large returns of the last week.

Interest Rate Cuts Likely at Some Point This Year

Federal Reserve Chair Jerome Powell told House lawmakers on Wednesday that interest rate cuts are likely "at some point" in 2024, noting however that policymakers remain attentive to the risks that inflation poses and don’t want to ease up too quickly and risk stable economic growth.

Powell prepared remarks for appearances on Capitol Hill, with stocks posting gains as he spoke, and the Dow Jones Industrial Average up more than 250 points heading into midday. Treasury yields moved lower as the benchmark 10-year note was off about 0.3 percentage point to 4.11%.

-From the Gemini Trading Desk