Bitcoin Fundamental Briefing, May 2024

Bitcoin Fundamental Briefing, May 2024


So, market turns to the 2nd episode of ETF story – now for ETH. Halving topic is forgotten already, and as we’ve said, hardly it will be significant resonance. So that has happened. Now it seems becoming a tradition when market falls in euphoria but ugly Sive dumping everything showing in negative light. Yep, it seems indeed, it takes place… Although partially it happens because we put on the light moments that big media prefer to ignore. And when you see this, you become more careful in long-term view and decision making.

With this report we will not talk about big fundamental background, as mostly we’ve discussed it in previous two months. So we would better to focus on events around ETH ETF approvement and market expectations. Besides, we already have the same story with BTC, so it is something to compare with already…


Bitcoin’s so-called halving event has had little impact on its price so far, with industry insiders on Monday saying the cryptocurrency’s fortunes were more closely tied to broader financial market sentiment and geopolitics.

Bets on more Ether gains are intensifying following a surprise US regulatory pivot toward allowing exchange-traded funds for the digital asset, even as questions swirl about the strength of demand for the products.

The shift by the US Securities & Exchange Commission catalyzed a 26% jump in the second-largest token in the seven days through Sunday, the biggest weekly advance since the 2021 crypto bull market, data compiled by Bloomberg shows.

Still, spot-Ether ETFs won’t partake in staking, the process of earning rewards by pledging tokens to maintain the Ethereum blockchain. The omission threatens to undercut interest in the funds compared with holding the tokens. Further SEC approvals are still needed before issuers such as BlackRock Inc. and Fidelity Investments can launch products, for which the timeline is unclear. 

“The risk in Ether remains to the upside and pullbacks are a buying opportunity,” Pepperstone Group Head of Research Chris Weston wrote in a note.

The highest concentrations of bullish options bets signal some traders see Ether climbing to $5,000 or even higher, according to figures from the Deribit trading platform. 

The gap between the T3 Ether Volatility Index — which uses options prices to give a sense of expected 30-day swings in the token — and a similar gauge for Bitcoin is around the widest since at least the start of 2023. That indicates speculators expect bigger swings in Ether than in the largest digital asset.

Some analysts view demand for futures hosted by CME Group Inc. as a window into US institutional appetite for regulated crypto exposure. The level of open interest — or outstanding contracts — is increasing for CME Ether futures but is much smaller than for CME Bitcoin futures, suggesting less institutional engagement with Ether and perhaps, by extension, the prospective Ether ETFs.

“The relatively low participation from the same institutions that will probably be expected to pour into the Ether spot ETF upon launch, suggests that the initial inflows could be disappointing,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.

The 90-day correlation coefficient of the digital currency and the tech-heavy Nasdaq 100 index reached 0.46 this week, the highest level since late August.  After the Fed began raising its target rate on overnight loans between banks in early 2022, the correlation jumped to more than 0.8, the highest since the digital asset burst onto the mainstream consciousness.

“People are re-focused on crypto as a growth asset or an asset that represents network value,” said Joshua Lim, co-founder of trading firm Arbelos Markets. “The ability of it as a technology and transfer of value mechanism, and that means that it’s gonna be more correlated to other assets that are also pretty growthy like Nasdaq, tech equities, those sorts of things.”

Coinbase Global Inc., the largest US crypto exchange, is zeroing in on potential demand in Australia’s growing self-managed pensions sector.

The exchange is developing a service that targets the segment, Asia-Pacific Managing Director John O’Loghlen said. Such portfolios make up about a quarter of Australia’s $2.5 trillion pension system and have A$1 billion ($664 million) allocated to crypto, the latest Australian Taxation Office data show.

“Self-managed super funds might just make a single allocation and set it and forget it,” O’Loghlen said in an interview. “We are working on an offering to service those clients really well on a one-off basis — to have them trade with us and stay with us.”

Global rivals such as Kraken as well as local players including BTC Markets Pty and Independent Reserve Pty are trying to tap the self-managed opportunity.

“With the launch of Australian Bitcoin ETFs poised for later this year, this is a space we anticipate will continue to grow,” said Jonathon Miller, a managing director at Kraken.

Also it is worthy to mention here that Bitcoin was grinding lower as part of a $500 billion slide in digital assets, stoking questions about whether the crypto rebound has peaked. Investors pulled a net $564 million from the batch of almost a dozen funds. Within five days the overall crypto market has tumbled 17% to $2.4 trillion 

Fizzling inflows into US spot-Bitcoin exchange-traded funds and the prospect of higher-for-longer Federal Reserve interest rates are together subduing digital assets. Last week’s debut of Hong Kong crypto ETFs failed to brighten the mood.

Many speculators who were betting on continuing strong ETF flows are now “being washed out of the market,” said Benjamin Celermajer, director at digital-asset investment manager Magnet Capital. But he added that the bull market isn’t over and that Bitcoin will scale new highs by the end of 2024.

The drop in Bitcoin from the record of almost $74,000 reached in March showed some worry by traders who “may see some risk in the global macro environment that the Fed or general investors are not seeing yet,” said Youwei Yang, chief economist and vice president of crypto miner BIT Mining Ltd.

Bitcoin’s tumble is piquing the interest of investors who view pronounced swings in the digital token as a possible precursor for broader changes in risk appetite in global markets.

The demand for the products subsequently fizzled, and markets failed to get a tailwind from this week’s launch of spot-Bitcoin and Ether ETFs in Hong Kong. Discounts to net asset value for some of the US portfolios have notably widened, highlighting the challenges from Bitcoin volatility.

“The next three to four months will be less bullish and more risk-oriented, with the market closely monitoring inflation, employment and economic data for any unexpected shocks or to gain confidence about potential rate cuts,” said Youwei Yang, chief economist and vice president of crypto miner BIT Mining Ltd.

Cryptocurrency exchange FTX has amassed billions of dollars more than it needs to cover what customers lost in its November 2022 collapse, setting them up to receive full recoveries, plus interest, a rare outcome in US bankruptcy proceedings.


This month mostly everything is turning around ETH, but some updates for BTC exist also. Majority points on 60K level as a vital for BTC performance. Downside breakout suggests deeper action to 50K area. While until BTC stands above it – it keeps chances on upside continuation. Very similar to our technical view that we discuss in regular videos. Let’s have a look.

Indicators show that the bullish phase of the market has not ended yet, CryptoQuant specialists noted.

“In past bull markets, MVRV peaked at 4.83 and 3.97, and currently has only reached 2.78. It has still not entered the overvalued zone and further rises can be expected. There should be much lower selling pressure from traders now as unrealized profits are low, 3%, compared to early March, 69%. Heavy selling has been exhausted according to this indicator.

The price of Ethereum may rise to $4,500 even before the launch of spot ETFs based on cryptocurrency. This opinion was expressed by the founder and CEO of DeFiance Capital, Arthur Cheong.

Many other analysts also talk about ~ $5000 level for ETH. Say, Matt Hogan of Bitwise Predicts that Investor Interest in Ethereum ETFs will Take ETH beyond $4,900. Others predict ETH at 8000$ if ETF will be approved. 

SEC approval of spot exchange-traded funds based on Ethereum will lead to an increase in the price of the asset by 75%, to $6,600. This opinion was expressed by Bernstein analysts Gautam Chhugani and Mahika Sapra, writes DL News.

Speaking about downside vital levels, a break in the bitcoin price below the $60,000 mark has reopened the way to the $50,000-52,000 range. Standard Chartered warned about this, writes The Block. They cited “a combination of cryptocurrency-specific and broader macroeconomic factors” as a factor of “new suffering.”

Leaving the price of the first cryptocurrency below $60,000 will provoke panic sales. This was stated by FxPro trader Alex Kuptsikevich, writes CoinDesk

Glassnode also has mentioned probability of panic sales, in case of downside continuation. 

The first one is understood by the bank as a five-day outflow of funds from American spot bitcoin ETFs and a weak reaction to the launch of their analogues in Hong Kong.

In Longer term perspective, Standard Chartered has maintained its digital gold targets for 2024-2025 at $150,000 and $250,000. The driver will be receipts into spot BTC-ETFs and purchases by sovereign currency funds. And also speaks about the same 8K level for ETH. 

If ETH ETFs receive US approval on 23 May as expected, we now see more price upside than we previously did. Specifically, we think ETH would keep pace with BTC, with the current 5.4% price ratio holding for the rest of 2024. Given that we now see BTC reaching the USD 150,000 level by end-2024, this would imply a level of USD 8,000 for ETH.  In 2025, we see the ETH-to-BTC price ratio rising back to the 7% level that prevailed for much of 2021-22. Given our estimated BTC price level of USD 200,000 at end-2025, that would imply an ETH price of USD 14,000.

Galaxy’s Novogratz Sees Bitcoin Stuck in $55,000 to $75,000 Range for Now

“We are in the consolidation phase in crypto. Bitcoin,  Ethereum and everything else, Solana will consolidate, what does that mean? It means probably somewhere between $55,000 and $75,000 until the next set of circumstances, the next set of market events bring us higher,” Novogratz said on a conference call after the firm released first-quarter results on Tuesday.

JPMorgan analysts remain “cautious” about cryptocurrencies in the near term. They cited a lack of drivers and a decline in the interest of retail investors, writes The Block.

“Due to three risk factors (increased positioning, high exchange rate of the first cryptocurrency relative to the cost of gold and the estimated cost of bitcoin mining, low level of funding for startups), we maintain a cautious view,” the report says.

Bitcoin rebound spurs demand for out-of-the-money calls at strikes from $70,000 to $100,000. there has been a notable increase in demand for bitcoin call options on leading cryptocurrency exchange Deribit and over-the-counter (OTC) networks. These options are specifically targeting a rally to new highs, potentially surpassing $75,000 and even reaching $100,000.

“We are seeing some bullish follow-through in volatility and rates following the reversal bounce from Friday and into the weekend. BTC risk reversals have gone positive (calls more expensive than puts), and [there has been a] renewed demand for BTC Sep expiry $75,000 and $100,000 calls,” QCP Capital said in a note on Monday.

“The options market seemed to anticipate a short-term leg higher up earlier this morning with top BTC and ETH trades on Paradigm consisting of OTM calls bought in size. We noticed the previous March 25 [expiry] $200,000 call buyer closing his position to buy the July 2024 [expiry] $85,000 strike,” Paradigm said in a Telegram broadcast.

Data from Deribit show traders have locked in over $688 million in the $100,000 strike call options across different maturities. That’s the highest notional open interest among all options listed on the exchange.

BTC's options open interest by strike. (Deribit)

Meanwhile, Elliot wave analysis by John Glover, chief investment officer of Ledn, suggests Bitcoin could rise to 92,000.

‘The BTC price action continues to track my expected path for Wave 4 as can be seen in the chart below. Although the dip to $56.5k may have completed the correction, I still expect to see a price of $52-55k before Wave 4 completes, 2/ Once the 4th wave is completed I expect that the Wave 5 push to circa $92k will ensue,” Glover said in an email to CoinDesk.

The level of $85-92K is very close to our own technical forecast of 85K for BTC mid term perspective.


So, market is falling in next euphoria – maybe not as hot as BTC one, but still. If we ignore some obvious “not of this earth” forecasts, then majority of reasonable analysts suggest a few ETH targets on different perspectives. Nearest one is around 5K, next one is 8K and long-term ultimate target around 14K.

Correspondingly on BTC we’re watching for 75K, next one is around 85-90K, which is also our technical target and then we have a few ultimate targets, starting from 150K and above… 

Major driver is approvement of ETH ETF that should (once again) increase cashflows on the market. Indeed, based on BTC ETF we could say that results are not bad:

BlackRock’s spot BTC ETF attracted 414 institutional clients, breaking all records, according to its 13F filings. Even 20 institutional clients for a new ETF is an incredible and extremely rare result, said senior ETF analyst at Bloomberg Eric Balchunas

But if we take a look at total coins distribution the picture looks a bit different:

— Individual holders— 57%
— Lost BTC — 17.6%
— BTC not yet mined — 6.6%
— Satoshi Nakamoto wallet — 5.2%
— Bitcoin ETF`s — 3.9%
— Corporations — 3.6%
— Miners — 3.4%
— States — 2.7%

The 2024 crypto renaissance has slowed down a bit. Bitcoin’s growth in 2024 has slowed to about 47% from more than 70% in mid-March , when the token hit a record high of nearly $74,000. Halving didn’t do any good.

Indeed, if you take a look at the chart, you could see that BTC has not raised in last three years. Important nuance has come from The Depository Trust Company, which provides settlement and clearing services in the US. Recently It said that cryptocurrency-linked ETFs will not receive collateral value for credit lines , raising questions about any potential implications for digital asset markets. Demand for about a dozen US spot Bitcoin ETFs has reached saturation and also continues to decline. 

On May 1st, a record outflow from Bitcoin-focused ETFs was recorded in the American jurisdiction. This whole story does not last long – from mid-January 2024, but it is very representative. Cryptocurrency is a sure indicator of excess liquidity and involvement in aggressive speculation.

There is no need to remind popular narratives that crypto replaces gold and is an alternative form of money, and investing in crypto is a method of moving away from fiat. 

Firstly, now this market is extremely regulated. There is no such a freedom  any more that was observed before 2017-2018, when the crypt was decentralized and riddled with dubious schemes and outright crime.

Now about 99% of the crypto market turnover takes place in organized trading on crypto exchanges with strict regulations for identity verification (KYC procedures) almost comparable to the level of verification in European or American banks, but with greater freedom for incoming and outgoing transactions.

The depth of integration and use of crypto is well moderated by regulators and the world’s leading central banks, at least in the external circuit, not allowing competition with fiat.

Secondly, the crypt is almost completely synchronized with the main stock markets (as we’ve mentioned above – 46% correlation with high techs) – it rises and falls in full correlation, but with a greater amplitude, which symbolizes the general cycles of distribution and accumulation of excess liquidity.

Bitcoin reached an all-time high on March 13-14, since then net cash flow into the ETF has been zero, while 10 billion was distributed from February 7 to March 13 – the most successful ETF launch in US history.

Since April 12, the crypto went into a hard downtrend (especially altcoins), and for ETFs there was an almost continuous outflow in the amount of 1.4 billion, and from April 24 for ETFs the most rapid outflow was 1.2 billion, where minus 563 million was on May 1.

AI hype, like crypto hype, is fading away. The maximums for crypto, as well as for AI stocks, were from March 8 to 18, and since then they have completely fallen ill. Bitcoin ETF statistics quickly show the degree of speculative rush, FoMO symptoms as well as the overall excess liquidity.


Things that we’ve specified above are of fundamental/valuation kind. It explains the true value of BTC. But big whales such as Blackrock dives in ETF topic not for entertainment. They want to get more control, trying to involve as more big money as possible. This is really big game and we could only gamble on real targets that they are following. 

Now we see some clear directions. First is – aiming on Pension funds, that have huge AUM’s. The US state of Wisconsin purchased 94,562 shares of BlackRock’s iShares Bitcoin Trust (IBIT) in the first quarter of the year, according to the filing . The shares are worth about $100 million.

It became clear why BlackRock was so actively promoting the topic of Bitcoin, and now Ethereum ETF.  They really wanted to put the money of American and Norwegian pensioners into a super-speculative, unsecured asset that BlackRock itself completely controls, while always referring to its “decentralization.”

That is, when they arrange a price collapse, there will be no questions for BlackRock. This is CryptoCipherPunk and no one is to blame at all. Very beautiful scheme. Considering how quickly the states are burning the pensions of hard workers is, of course, one of the first items on the to-do list.

Second is – Hong Kong ETFs. Richard Byworth, Managing Partner at SyzCapital, has ignited rumors suggesting that Bitcoin ETFs listed in Hong Kong could soon be accessible to investors from mainland China.

Considering that a) yields on long-term Chinese government bonds are falling, b) although the stock market is at its lowest, it is not ultra-cheap in terms of multiples, there is no guaranteed upside in terms of indicators companies, given the general economic tension, c) the Chinese are extremely actively running into gold and they, in principle, as history shows, are ready to participate in near-bubble stories, and they are also gambling addicts themselves, I think the impulse to the market will be solid. Government should not object too much, and overall, the bubble will likely continue to inflate.

And another two issues, that somehow remained in the shadow.

The US House of Representatives voted to repeal an SEC rule prohibiting highly regulated financial firms from holding crypto on their balance sheets. The EU is considering including cryptocurrencies in the 12 trillion euro investment market – the effect could be much stronger than from American crypto ETFs.

So, either this is a scam of a planetary scale, which is still far from over, until the Central Bank/state money also goes into it (as was the case with ESG), or after all, all this is being done in order to solve problems in the global financial system in a certain way. But what is clear is that the integration of crypto into the financial system is someone’s cunning plan, because to believe that such legislative adoption of an asset class occurs without an interested party would be naive.

Maybe this is the reason why as JP Morgan as GS calls ETF approvements as “political decision”, referencing to coming elections. None of the sides want to loose “crypto fans” electorate. So, as D. Trump as J. Biden promise to support and develop cryptocurrencies on a State scale.

“We view this approval of ETFs and cryptocurrencies more broadly as an increasingly political issue ahead of the 2024 US presidential election. As such, we expect spot ETH-ETFs to start trading well before November, ” the JP Morgan report says.

Digital assets become a partisan talking point in the US presidential election campaign Political stance towards cryptocurrencies has now become a talking point in the ongoing US presidential election campaign, signaling a shift in the way presidential nominees consider digital assets as a stand-alone policy, GS writes in the report.

In the conclusion we say just one thing. In last two reports we’ve explained all infrastructural risks of highly centralized crypto market. So, we won’t repeat it again here. Anyone who intends to deal with cryptocurrencies now will have to make important choice – either he/she makes decision on fundamentals or follows general hype and BlackRock&Co strategy to pump it more. 

We do not tell that this is bad, but this way is accompanied with uncertainty because you will not know what the next step follows. Second – you will have absolutely no background that could somehow to justify the value of BTC or ETH. 

In current circumstances and Global political, economical background we consider gold as better choice but this is a different story and this choice is still personal. Besides, they are not mutually excluding… 

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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.

At the Forex Peace Army, he is known as an author of Forex Military School, which quite unique free forex trading course. We do not know of any other free forex trading education covering such a broad spectrum of forex market concepts in such details while keeping it easy to understand and practically use.

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