Bitcoin Fundamental Briefing, April 2023

Bitcoin Fundamental Briefing, April 2023


This month is passing under the sign of banking turmoil in the US. We could argue whether this is a full-sized crisis or just few “occasional” cases of banking insolvency, but this is definitely the precedent. The precedent that keeps frozen ~ 500 Bln of Fed/Treasury cash in a way of different special “support” programmes – FDIC, BTFP, Repo etc. The problem is halted for now, but embers are still red.  And recent First Republic Bank crash after statement release is another confirmation. 

As a result, first big event has led BTC to rally and close 1Q 2023 with outstanding performance. But in the 2nd half of the month, price is stumbled around 30K, which is now becoming the 2nd issue for the April – everybody is watching what will happen and what chances on upside breakout. What will happen if BTC will break it? And what if not? But somehow, everybody try to pull BTC market out of context, forget about fundamental background and general fundamental conditions where BTC market is functioning. Meantime, recent jump of NASDAQ index after strong Google earnings report and announcement of $70Bln shares buyback once again shows that BTC market is not isolated – take a look at correlation:

Also we have to take in consideration the margin safety of the Fed and US Treasury in terms of liquidity. Here is also not everything perfect – tax collection dropped, rising of budget deficit and debt ceil soap opera makes investors to be nervous,

while US Treasury has to borrow around 1.3-1.5 Trln until summer to finance government spending by the end of 2023 fiscal year. All these moments are make sense, because there is only one liquidity pull, including stock market, cryptos, bonds, and money supply is dropping, Fed is trying to suck all resources that it could:

Thus, as you could see even brief excursion of fundamental environment shows that BTC upside continuation is not a trivial question…


Bitcoin is ending the week on a down note after failing to sustain momentum once it pushed past $30,000 for the first time since June. 

The largest cryptocurrency by market value has dropped about 10% since last Sunday to around $27,300, rounding out its first weekly loss in four. Bitcoin had climbed as high as $31,013 on March 14, and has surged around 65% this year, helping to soften the blow from a similar-sized decline in 2022. 

The weekly drop comes amid improving bank deposits, a fluctuating outlook for higher interest rates and a risk-on rally in some US stocks. 

Galaxy Digital founder and CEO Mike Novogratz says Bitcoin’s recent runup was driven by investor reaction to the collapse of Silicon Valley Bank and concerns over US fiscal debt.

“We’re gonna have a credit crisis in the US and the economy’s going to slow and it’s going to slow pretty dramatically. And that gives a great macro backdrop to Bitcoin,” Novogratz says on “Bloomberg Markets.”

“Bitcoin saw a loss of short-term momentum earlier this week, which has given way to a corrective phase,” said Will Tamplin, senior analyst at Fairlead Strategies.

Bitcoin Turns Back Down | Cryptocurrency retreats after breaching $30,000

“The one concern is whether the rally to $30k was merely due to the liquidity injection from the Fed after the failure of SVB, or if it’s the start of a new bull run for Bitcoin,” said Matt Maley, chief market strategist at Miller Tabak + Co.

“As we move towards narratives surrounding risks of recession, I think we’re seeing riskier assets come under pressure and that does include Bitcoin,” said Fiona Cincotta, senior financial markets analyst at City Index.  

Bitcoin is beginning to test a closely watched level that some analysts suggest could prove to be a key turning point after this year’s surge in prices. 

The largest digital currency is trading around its 50-day moving average, with Paul Hickey of Bespoke Investment Group noting that the level to watch is $27,500. If the level doesn’t hold, prices risk declining. 

Halted Momentum | Bitcoin tests its 50-day moving average

We have seen a decrease in volume, market depth and liquidity, translating into higher volatility,” Ambre Soubiran, chief executive officer of crypto data provider Kaiko, said during a Bloomberg TV interview. “That for now is an indication that even though there’s a positive sentiment around the price of those assets, market is not back to their pre-2022 crisis amount in terms of volume, and market depth, most importantly. “

The Bitcoin-dollar trade pair — which trades on exchanges like Coinbase and Gemini — shows volume was the lowest since 2020, the researcher said. During that time, regulators cracked down on the industry with a number of lawsuits and actions. 

The Bitcoin-dollar pair measure may be a better way of representing what volumes actually looked like without zero-fee trading during the first three months of the year and shows a “starkly different trend,” according to Kaiko’s Clara Medalie, who published research on the topic alongside with Conor Ryder, research analyst at the firm

“That’s where the Binance effect comes into play — essentially the vast majority of Bitcoin volume over the past year has been for zero-fee on Binance exchange,” said Medalie.

relates to A Closer Look at Bitcoin’s Rally Suggests the Depth of Demand Is Deceptive

Bitcoin’s dominant showing in 2023 is leaving exchange-traded fund investors divided on what’s next for the world’s biggest cryptocurrency. Given Bitcoin’s speculative nature as well as its lack of traditional fundamentals and valuation metrics, investors seem unsure which way the coin may move next. 

“It reflects uncertainty when you have roughly half the market participants go long and half of them go short,” said Chris Gaffney, president of world markets at TIAA Bank. “It shows that nobody really knows where we’re going.” That uncertainty will likely lead to more volatility, he added. 

A net $368 million of Bitcoin was sent to personal wallets in the week through April 4, a period that saw this year’s second-largest net Bitcoin outflow from crypto exchanges, strategists Alkesh Shah and Andrew Moss wrote in a note.

“Investors transfer tokens from exchange wallets to their personal wallets when they intend to hold them (or HODL), indicating a potential decrease in sell pressure,” they said. 

Concerns stemming from the US regulatory crackdown on digital-asset platforms may have triggered the efflux from exchanges, the BofA strategists wrote in a note published Monday.

relates to Bitcoin Hoarding in Personal Wallets Signals Support After Jump to $30,000, BofA Says

Investors also consider relation between inflation and BTC performance. Thus, this month the March CPI numbers were in focus – 

“Anything below 5.2% or around 5.2% could lead to a bullish continuation for” Bitcoin, Krugljakow said. “5.3% or higher will most likely give a slight shock and dampen the current price action.”


Here it is not necessary to talk a lot, because just in February we’ve prepared special report on this subject, showing the major vector that SEC and CFTC have set. Here is just recent news on this subject. In general, the US authorities keep tightening bolts:

– The Securities and Investments Commission of Australia (ASIC) has revoked the license of the local branch of the Binance crypto exchange for financial services. In addition, ASIC conducts a review of Binance services regarding the classification of retail and wholesale customers. A representative of Binance, in an interview with The Block, said that after negotiations with ASIC, the company decided to close the derivatives trading division.

–  US Derivatives Regulator Says Binance Intentionally Flouted Rules. The CFTC last month accused Binance of “sham” compliance with US derivatives regulations, including failing to keep Americans off its exchange as promised and not registering with the regulator.

Stablecoins must comply with the same rules as fiat, and proper supervision is necessary to ensure financial stability. This was stated by the head of the Bank of England, Andrew Bailey. According to the official, “stable coins” lack a “guaranteed value” — one of the main characteristics that people pay attention to when investing.

–  Web3-lawyer Jess Hines said that the U.S. Securities and Exchange Commission (SEC) will further tighten regulation of digital assets – 

 People think the crackdown is here. It’s not yet. It’s coming though. And here’s the hottest take of them all: it will ultimately be what’s best for investors. The road there will be terrible and unnecessary

Nationwide Building Society and HSBC Holdings Plc toughened limits on retail customers’ access to cryptoassets , becoming the latest UK banks to impose curbs after industry scandals and regulatory warnings.  – Sunak’s Crypto Plans Are Hit by Reluctant UK Banks

As a result more and more experts start suggesting that the US and Anglo-Saxons economy will loose domination in crypto industry, as big companies will start thinking to move in other locations, such as BRICS countries, and Latin America.  Gemini, Binance, Circle, Bittrex, Coinbase are already working on how to leave US regulation areas. Ex Goldman top manager, Raoul Pal, talks about this here.

While the US Securities and Exchange Commission is cracking down the crypto industry, other regions including Hong Kong, Abu Dhabi and Dubai are pushing for crypto-friendly regulations, Novogratz said. Galaxy recently hired six more people in its Hong Kong office, he said.

Legal instability and regular moving of crypto industry from one country to another promises nothing good and breaks business stability as everytime it needs to adopt to new conditions and regulatory rules in new jurisdiction areas. 


Bitcoin’s rebound is just the start of a rally that will take it past $50,000 next year courtesy of a process known as halving that curbs the supply of new tokens, according to projections from crypto analysts.

relates to Bitcoin ‘Halving’ Due Next Year Spurs Predictions of Rally in Token Past $50,000

The upcoming halving is currently about 50% priced in based on previous cycles, said Jamie Douglas Coutts, a Bloomberg Intelligence analyst. Coutts predicts that Bitcoin can scale $50,000 by April 2024. 

“Bitcoin cycles bottom around 12-18 months prior to the halving and this cycle structure looks similar to the past ones, albeit many things have changed — while the network is vastly stronger, Bitcoin has never endured a prolonged severe economic contraction,” he said.  

Markus Thielen, research head at Matrixport, said in a recent note that Bitcoin will reach around $65,623 by April 2024 — more than double the current price.

Galaxy Digital Holdings Ltd. founder Mike Novogratz said he expects gold, the euro and cryptocurrencies Bitcoin and Ether to outperform competing investments as the Federal Reserve moves toward easing its interest-rate increases after recent bank failures lead to a potential credit crunch. 

“The clearest trades have been and will continue to be long gold, long the euro, long Bitcoin, long Ethereum — these assets that should do well with the Fed stopping hiking and then cutting,” Novogratz said in a Bloomberg Television interview Wednesday.

“Bitcoin had a huge run,” he said, pointing to the $30,000 price point reached this week for the first time since June 2022, when hedge fund Three Arrows Capital and other firms imploded. “We can consolidate here before moving towards $40,000, as long as the Fed plays out the way (i.e. turns to easing) I think it’s gonna play out.”

Top cryptocurrency bitcoin could reach $100,000 by the end of 2024, Standard Chartered said on Monday, saying that the so-called “crypto winter” is over.

Bitcoin could gain from factors including recent turmoil in the banking sector, a stabilisation of risk assets as the U.S. Federal Reserve ends its rate-hiking cycle and improved profitability of crypto mining, Standard Chartered’s head of digital assets research Geoff Kendrick said in a note.

“While sources of uncertainty remain, we think the pathway to the USD 100,000 level is becoming clearer,” Kendrick wrote.

Still, Reuters reminds, that predictions of sky-high valuations have been commonplace during bitcoin’s past rallies. A Citi analyst said in November 2020 that bitcoin could climb as high as $318,000 by the end of 2022. It closed last year down about 65% at $16,500.

Robert Kiyosaki –  Years ago I watched BC climb to $20k then drop to 0. I thought BC finished. Slowly watched BC climb to $6 k & I bought lots. WHY? Because people support BC not FED or Gov. BC did not need FED or Gov bailout because BC people’s money. BC to $100k. Long live BC.

Bitcoin up over 100% in a year. Will Bitcoin keep going UP? I’m betting on it. I am buying more gold and silver. Why buy more Gold, Silver, BC? Because Fed, Treasury, and Biden are liars.

CNBC – Bitcoin at $100,000? Insiders say the cryptocurrency could test new highs this year

Marshall Beard, chief strategy officer at U.S.-headquartered cryptocurrency exchange Gemini, said $100,000 could be a possibility for bitcoin.

I think bitcoin probably breaks all-time highs this year,” Beard said, adding that the $100,000 price figure is an “interesting number. Beard said that if bitcoin gets to its previous record high of near $69,000, “it doesn’t take much more for it to lift up” to $100,000.

Paolo Ardoino, chief technology officer at stablecoin issuer Tether, said bitcoin could “retest” its all-time high near $69,000.

“I think the rally is explicable by saying, people have got freaked out by the banking system by the collapses,” Oliver Linch, CEO of Bittrex Global, told CNBC in an interview at Paris Blockchain Week on Thursday.

The founder and CEO of the analytical company Messari, Ryan Selkis, predicted the growth of the first cryptocurrency to $100,000 within 12 months:

My rough prediction for the next twelve months:
1. More bank failures in the next couple of weeks.
2. Fed cuts / QE is back!
3. BTC climbs, sustained moderate inflation.
4. “Outside Money” / “Sound Money” -> $100k / BTC.
5. Institutions buy faster than Feds can shut down.

K33 Research (ex. Arcane) – A reliable pattern or an illusory correlation? BTC’s current drawdown and recovery cycle is remarkably similar to the pattern seen in the 2018-19 bear market in terms of length and trajectory. If history repeats, BTC will peak around May 20 at $45,000.


Source: Tradingview

Glassnode: $30,000 test weakened the confidence of Bitcoin optimists.

With the strong opening to 2023, the aggregate market has confidently transitioned out of a regime of unrealized loss, towards one of unrealized profit, shown by the sharp divergence between supply held in profit vs loss. As this takes place, the incentive to take profits grows.

The Bitcoin spot price is currently trading between two popular On-chain pricing models; the Realized Price at $19.9k representing the average acquisition price of the supply, and the Realized-to-Liveliness Ratio at $33.0k.

This second model is akin to a HODLer Implied Fair Value 🟠, and will trade higher when more of the coin supply is dormant in investor wallets. Spot markets fell short of reaching this level this week, topping out around $30.5k.

This suggests that the market has transitioned out of the ‘deep-value’ zone as signaled by trading below the Realized Price, and has reverted back towards a holder implied ‘fair value’ level. With this, we can also expect an increase in the probability of profit taking behavior from coins acquired at cheaper prices.

Over recent weeks, we can see a mix of behavior, suggesting indecision across all cohorts bar the largest of entities with 10k+ BTC. This aligns with aggregate consolidation, the brief break above $30k, and the subsequent sell-off back to $27k this week.

After a remarkably strong start to 2023, the BTC market has run up against its first appreciable resistance, reverting the rally up to $30k. This comes alongside a very large cross section of the market seeing their holdings recover above acquisition price, creating a more favorable, and profitable environment.  With accumulation and distribution behavior across several wallet cohorts mixed at the moment, the market appears less decisive than it has been in the first quarter of the year.


Lets start from the technical view. Here we do not intend to dig it too deep, as we speak mostly about long term perspective. Weekly chart shows all that we need to know :

Keeping all fundamental factors aside and by looking only on chart analysis – BTC has chances to show another upside swing to 36K area. This will be vital point because of resistance strength. Around 36K we have combination of K-area and 1.618 final H&S target. We suggest very low chances that BTC could exceed this level without big fundamental shifts in background. And mostly suggest that this is final possible BTC target in foreseeable future. This view is close to 40K forecasts mentioned above by Arcane research and M. Novogratz. For other mentioned, more extended target – 55, 65 or even 100K we do not have any reasonable background or scenario that could point precisely on it, like the H&S that we have, points on 36K target.  Yes, we have next ~50K major Fib resistance area above but we do not have right now patterns, that suggest reaching this area. 

In nearest few weeks 25K area is vital for BTC. After price has reached first H&S target around 30K and K-resistance area, BTC starts natural pullback. But, to keep reverse H&S scenario valid and aiming on next target around 36K – it has to stay above the neckline, i.e. 25K area. Downside breakout could destroy upside scenario and set BTC on a road to long term downside target of 12K. But, based on current fundamentals we suggest that 12K might be even more realistic than continuation to 36K despite healthy technical outlook. 


Fundamentals – thats the area where major tricky moments come on the surface. And we suggest that particularly fundamentals now care major problems to BTC appreciation. 

Those of you, who follow our weekly analysis of FX and Gold market mostly understand the bulk of problems. Keeping it simple – the Fed and US Treasury have lack of liquidity to finance and support national economy. They are struggling inflation and have to contract the money supply. Now it stands on the levels that have not been seen since 1959:

But it is not only about inflation, of course. US Treasury is responsible for financing government spending, it has to guarantee the fulfillment of budget spending of fiscal year. But it happens so that US government is spending more than it earns year by year. Much more. And gets unbelievable budget deficit. This year spending jumps for 36% and to fits it to budget earnings you need to cut spending for 27%. 

In the first 3 months of 2023, the deficit reached $679 billion. A 134% jump compared to the first quarter of 2022 ($291 billion).  In a first three months Revenues stand for  $1,023 billion vs. $1,070 billion (-4.4%) last year, while expenses are $1,702 billion vs. $1,361 billion (+25.1%) in 2022. Thus, US on the way to $2Trln hole in national budget in 2023. 

When US Treasury has not enough own funds to close this gap  – it usually finance it with the borrowing, increasing national debt. But the ceil of the debt is regulated by special law, and it can’t be increased freely, it has to be done by special legislative bill, accepted by Congress and Senate and signed by the US President. In previous years this procedure was mostly a formality, but not this time.

According to Goldman Sachs, the X-day (when debt level hits the ceil) comes earlier this year, as soon as in June, due to decrease of IQ tax revenues. 

It means that US Treasury accounts will be underfunded due poor tax collection in April, but they have to find assets to close the budget gap and other spendings. 

Debt ceil saga is coming to culmination. Nobody wants to step back. The US House of Representatives passed a bill to raise the national debt limit. The plan to increase the national debt was previously published by the Speaker of the House of Representatives, Republican Kevin McCarthy. According to it, the debt limit will be raised by $1.5 trillion, but spending cuts of $4.5 trillion will be required. Expert tells that this bill has no chances to pass the Senate. White House press secretary Karine Jean-Pierre ruled out that President Joe Biden would sign the legislation. This makes investors to nervous rising US Default spreads (insurance from the US Default) to unbelievable levels, never seen before:

Yes, the Treasury cash balance has jumped a bit from  96 Bln to ~300 Bln due to tax coming, but for how long? This is a drop in the sea. This is actually the same “April uptick” that you could see on the chart above, when IQ taxes are coming on US Treasury accounts:

But, take a look on the tendency before tax gathering – fast exhausting of cash liquidity. The major reason – support of the banking system during March 2023 crisis and SVB crash. Now the story repeats with First Republic Bank (FRB), 14th largest in the US. The Fed and US Treasury already pumped in the system ~ Bln 350$ in a way of different support programmes – FDIC, Repo, direct loans etc. And FRB problem is yet to be resolved. Meantime, demand for these special programmes are not becoming weaker – banking system is sucking liquidity:

The Fed has poured $350 billion into the banking sector since the beginning of the year to save it from collapse. However, it is now clear that these efforts are clearly not enough. After all , the total losses of banks due to rising rates and stopping the printing press exceed 2 trillion dollars . And another 200 US banks could follow  the path of SVB and First Republic.

Thus, what we do we have? The Fed and US Treasury can’t borrow because of debt ceil and they can’t use own funds because they do not have it – where to get the money? Print? It will crash the whole system, spin up inflation to two digits and crash destroy the bond market. Then where? On stock and crypto markets. How? Just by breaking investors’ expectation on coming dovish Fed turn in June. 

It is easy to do and this crash stock and crypto markets, making investors to move cash into bond market. In J. Powell prank video, he clearly said about “two more rate hikes”, i.e in May in June, that already breaks markets’ view. Since we do not have yet terrible statistics, with job market looks rather strong, we do not see the big problem if the Fed will raise rate in July as well, before August break in Fed meetings. Sooner or later it is no doubts that they will return to printing, to some way of QE, because it is undecidable task even by using a simple maths. But crashing stock and crypto market is less devastating to the US economy than immediate printing. We think that the Fed starts QE only as a hope of last resort, when no other tools remain. If banking crisis will demand more funds or debt ceil saga comes to the dead way situation will become worse and unpredictable. 

QE restarting is a bad thing for non-interest bearing BTC market because it immediately pushes inflation higher. As we’ve discussed in the first section of our research, market treats inflation as negative thing for crypto market:

“Anything below 5.2% or around 5.2% could lead to a bullish continuation for” Bitcoin, Krugljakow said. “5.3% or higher will most likely give a slight shock and dampen the current price action.”


And this fundamental picture makes us to be, let’s say, careful, if not to say skeptic on BTC upward trend continuation in perspective of 2-3 months. Taking together technical and fundamental picture, let’s see – action to 25K should happen next week, precisely at the eve of Fed’s meeting. Within few weeks market will try to come back to 31K top and break it. On 14th of June we have next Fed meeting. If they will raise the rate – BTC rally will fizzle. You could trade it “long” in short-term from 25K support level, but be careful with taking longer-term bullish positions.


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Sive Morten

Sive Morten

By day Sive Morten works for the large European bank. In that roll he evaluates the markets including currencies market managing bank risks and evaluating the bank portfolio.

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