Blockchain Index

Bitcoin is currently leading the market higher, which is no surprise. During the early phase of the bull market, BTC will dominate as most liquidity rotates into the largest digital asset. 

ETH is yet to reach the previous resistance level of roughly 2145 USD, and has some catching up todo. However, the new high on Bitcoin of 31,420, marks the highest price BTC has been to since June 2022. Everything is moving in the correct direction. 

This week, Bitcoin exploded to the 31K USD resistance level and has reached a double top zone. 

There were multiple news stories of institutions piling into the cryptocurrency market, despite the ongoing legal battles between the SEC, Binance and CoinSpot. The largest fund on the planet (BlackRock) applied for Bitcoin Spot ETF in recent weeks. We also know that BlackRock has been increasing its exposure to Bitcoin indirectly, through MicroStrategy (MSTR), the largest corporate holder of Bitcoin.

BlackRock is one of MicroStrategy's top five shareholders, with a reported 8.1% stake, a 25% increase from 2022. MSTR is the largest institutional Bitcoin holder, with 140K BTC valued at more than $3 billion. If any asset manager can successfully push through a Bitcoin ETF, it will be the largest asset manager in the world. 

Additionally, in Europe, Deutsche Bank applied to Germany's financial services authority to provide cryptocurrency custody services. Deutsche Bank wants to expand its digital assets and custody business. Deutsche's appeal to BaFin is part of a larger drive to increase fee revenue for its business bank unit. With a BaFin licence, crypto businesses can confidently promote and sell their services in the German market.

It appears as though institutions are turning bullish on digital assets!

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Blockchain Index - Bitcoin Update: 16th May 2023

Bitcoin increased by roughly 100% from its market low of 15,500 USD, reaching highs of almost 31,000 USD.

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What we know so far:

• The previous Bitcoin bear market bottoms occurred on average 400 days before the next BTC halving event. 
• The next Bitcoin halving event is estimated to be in April/May 2024
• This would suggest Bitcoin should have bottomed in Jan 2023 - which is in line with this current Bitcoin market low. 
• A Bitcoin halving event is where the supply of Bitcoin entering the market is reduced by 50%. This has historically been known as a bullish event, however, the bull market actually begins prior to the halving cycles. 
• A reduction in the supply of Bitcoin and growing demand for the asset are only supporting higher prices long term.  
• Bitcoin remains inside the longer-term bullish trending channel structure (highlighted in the second chart)

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With Bitcoin leading the charge to the upside and tagging the first crucial resistance level, short-term profit taking, and leveraged short positions are most likely taking place. Pullbacks are expected and support can be found at 25,000 USD and 20,000 USD. 

However, fundamentally, Bitcoin is showing good signs of a major change in trend after breaking out of the negative trend line resistance and tagging the lower channel structure, which is only positive for the rest of the crypto market.