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The recent surge of Bitcoin (BTC) to breach the $30,000 mark after 10 months has sparked discussions about its resilience and raised new inquiries about its capacity to sustain its value at higher levels.

While the latter half of 2022 was considered the peak of the crypto winter, the former half of 2023 has brought hope to bullish Bitcoin holders with promising signs of growth. The looming question for investors, however, is how much longer they can remain optimistic before needing to brace themselves for another potential downturn.

Examining the current state of affairs, Bitcoin surpassed the $30,000 mark during the early hours of Asian trading, though its performance has been volatile during the initial stages of trading in the United States.

The hourly trading volume suggests a strong belief in the upward trend, having significantly exceeded its 20-day moving average. It appears that the daily trading volume is also on track to follow suit.

Reaching 10-month highs is a noteworthy achievement, particularly considering the tumultuous state of the crypto market since May of the previous year. This rise essentially returns Bitcoin to the same level it was at prior to the collapses of significant players such as Three Arrows Capital, Celsius Network, and FTX.

At this juncture, the prospect of where the crypto market is heading proves more exhilarating than assessing its past performance, with compelling justifications for both long and short positions.

A positive outlook is that the Federal Open Market Committee (FOMC) will decrease the frequency of interest rate reductions in the latter part of the current year.

With each passing day, we are inching closer towards that anticipated event, as the current target rate of 4.75%-5% approaches the previously proposed target rate of 5%-5.25%, although it has yet to be confirmed.

The degree of optimism among investors is likely to be influenced by the consumer price index report scheduled for release on Wednesday, with a projected increase of 0.4% in monthly inflation. A larger-than-anticipated decline in the CPI is expected to prove advantageous for those investors who hold a bullish position on Bitcoin.

Bitcoin's price and its momentum seem to be exhibiting a bearish divergence, particularly when observing its performance since January. Despite BTC's 45% increase since January 14th, its 14-day Relative Strength Index has declined by 19%.

Considering the conflicting interpretations of market developments, traders may ultimately resort to monitoring the status of BTC balances on various exchanges.

An uptick in BTC balances on exchanges may indicate an impending price drop, as traders prepare to sell their BTC holdings if necessary. Conversely, a reduction in balances may signify the opposite, with investors moving their BTC into cold storage in anticipation of a rise in value.

Since March 31, there has been a marginal rise of approximately 4,000 BTC on exchanges, amounting to a total value of $130 million. The noteworthy aspect of this shift is that it ended a trend of declining balances that began on March 19.

In light of the recent achievement of the $30,000 milestone, the manner in which investors interpret this development may be reflected in the evolution of BTC balances moving forward.

Source Coindesk