Weekly Report (May 15)
Bitcoin – Time to Buy The Dip?
The cryptocurrency market is currently experiencing a notable phase of consolidation, with Bitcoin facing a significant resistance level at $65,500. This resistance level is proving to be a strong barrier, and Bitcoin’s ability to break through it could potentially create a new wave of bullish sentiment in the market. However, there’s also the possibility that the market remains in this accumulation phase for several months, especially leading up to the US election.
During this period, institutions are likely positioning themselves and keeping prices low to get better entries, evident by recent institutional buy-ins. For example institutions can discreetly suppress the price of Bitcoin by coordinating sells or shorts, using regulatory tactics, and using trade strategies to attempt to increase sell pressure. For instance, the state of Wisconsin recently reported a substantial investment of $164 million in spot Bitcoin ETFs (Exchange-Traded Funds) at these prices. These institutions and key players are largely risk-averse and would not take positions in something they did not see opportunity in. This move also demonstrates the growing interest and acceptance of cryptocurrency investments among institutional investors and government entities.
Bitcoin Weekly Price Chart
Meanwhile, altcoins are seeing a decline in value, a trend that often accompanies periods of Bitcoin consolidation. Here is an overview of the recent decline in crypto narratives, based on the performance of the top 5 tokens in each sector:
The following outlines the average decline for the top 5 tokens in each narrative sector over the past 2 months:
Infrastructure (Layer 1 blockchains)
Down 27.35%
Layer 2 Scaling Solutions
Down 37.97%
Decentralised Finance (DeFi)
Down 39.65%
Artificial Intelligence (AI) Tokens
Down 26.11%
GameFi (Gaming)
Down 48.26%
Meme Coins
Down 13.48%
Bitcoin ETF Flows
Bitcoin ETFs have recently broken a trend of negative net flows, showing positive net inflows over the past three trading days. Meanwhile, the average outflow from Grayscale’s Bitcoin Trust (GBTC) has continued to diminish, now standing at around $237 million, suggesting that selling pressure from this particular ETF is easing.
In a span of seven trading days from April 12th to April 22nd, Bitcoin ETFs have seen a trading volume of $16.4 billion. The recent downturn in the market has significantly influenced investor behaviour, leading to this decrease in volume. Heightened fear and uncertainty have made many investors more cautious, resulting in reduced activity in the market during this period.
The CEO of Bitwise has predicted that wealth management firms will likely increase their holdings in Bitcoin ETFs, signaling a growing interest in cryptocurrency investments from traditional finance sectors. This anticipated rise in adoption is expected to gain further momentum following the completion of the Bitcoin halving event, which historically has had a significantly positive impact on Bitcoin’s value and investor interest.
Additionally, IBIT, which is Blackrocks Bitcoin ETF, has been experiencing rapid growth. Larry Fink has described it as “the fastest growing ETF in the history of ETFs.” IBIT is on track to surpass Grayscale which has been in the game for a lot longer.
Bitcoin ETF Flow Table (US$m)
Meme Stocks Craze
The meme stock frenzy has reignited in 2024, with GameStop (GME) leading the charge once again. On Monday, GameStop shares skyrocketed over 130% in pre-market trading, after the return of Keith Gill, known as “Roaring Kitty,” posted on social media after a three-year break. Keith Gill reportedly made over $50 million in 2021 during the first meme stock phase where he helped push GME up to $80 from $5. This resurgence has extended beyond GameStop which is now up 180%, with AMC Entertainment also surging 300%.
GameStop Weekly Price Chart – US Market