House View – February 2024

In the February edition of the Crypto Finance House View, we cover the following topics: 

Market Review & Outlook

The start of the year has been rather muted in terms of total returns, despite the approval of bitcoin spot ETFs in the US. In traditional markets, it is often quipped that “As January goes, so goes the year” (The January Barometer from The Stock Trader’s Almanac). However, in our analysis, we are only seeing a weak link between January returns and the rest of the year (see charts below).

For bitcoin, specifically, (as a barometer for crypto markets in general), it turns out that, historically, average January returns are in fact negative, while returns for the rest of the year are clearly positive (see table below). We are therefore putting little emphasis on the muted January returns and attribute the situation mainly to “sell the news” order flow following the ETF approval, which led to a relative balance between supply and demand. This has resulted in range-bound markets so far. For the remainder of the year, we still expect to see attractive returns.

By Friedrich Herzog

Technical Analysis 

Profit taking in bitcoin (BTC) commenced immediately following the previous analysis, causing the price to correct downwards to the USD 38,500 level. This correction presented attractive buying opportunities, and the market has since begun to rebound. The key resistance point is situated at the previous high, approximately USD 49,000.

The importance of this level is supported by the long-term chart; the horizontal resistance line traces back to March 2022. Our projection for upward price movement remains valid as long as the price continues to trade above the last low of approximately USD 38,500. The long-term RSI model has confirmed its long position. RSI readings are currently at 67.48, well above the trigger level at 53. The relative strength of ETH vs. BTC retested the downward sloping resistance line. However, the chart turned in favour of BTC again.


By Michael Zbinden

Crypto Reads: “Broken Money” – Lyn Alden

Broken Money explores the history of money through the lens of technology. Politics can affect things temporarily and locally, but technology is what drives things forward globally and permanently.

The book’s aim is to provide readers with a profound comprehension of monetary history, encompassing both theoretical underpinnings and practical ramifications. From shells to gold, from papyrus bills of exchange to central banks, and from the invention of the telegraph to the creation of bitcoin, Lyn Alden walks the reader through the emergence of new technologies that have shaped what we use as money over the ages.

The book undertakes a distinctly human exploration of how money moulds the lives of individuals and influences societal power structures through evolving monetary technologies. In the contemporary age, energy abundance and technological advances have significantly enhanced human well-being.

However, the global monetary system lags behind, with over 160 active currencies, each confined to its own country and lacking acceptance elsewhere. This results in rapid dilution, consistently devaluing the savings and wages of billions residing and working within these jurisdictions.

By Crypto Finance Editorial Team

 

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All information in this document is provided for general information purposes only and with no warranty or liability for accuracy, completeness, or fitness for a particular purpose. No information provided in this document constitutes or is intended as investment advice. This document is not, and is not intended as, an offer, recommendation, or solicitation to invest in financial instruments including crypto assets. Crypto Finance is a financial group supervised by the Swiss Financial Market Supervisory Authority FINMA on a consolidated basis with Crypto Finance AG as a securities firm and Crypto Finance (Asset Management) AG as an asset manager for collective investments with the corresponding FINMA licenses. This document and its content including any brand names, logos, designs, and trademarks, and all related rights, are the property of the Crypto Finance Group and Deutsche Börse Group. They may not be reproduced or reused without their prior consent.

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