Bitcoin reaches 60,000, will it continue to run wildly or will it be the final party?
Bitcoin surged this week, rising by 12,600 points, or as much as 25%, to reach $63,000, only 10% away from the all-time high of 69,000.
Can the crypto market keep growing, or is it just overvalued? We can analyze it from the financial and emotional aspects.
Funding: ETF opens the door to BTC hot money, and net inflows continue to grow
Let’s start with the capital aspect. Since the adoption of the BTC ETF on 1/11, we can observe the increasing net inflow of capital. From the first week of net outflow to now, there is a net inflow of about US$500 million every day. Traditional institutions are interested in Bitcoin. It has not diminished over time, but has provided the market with an endless supply of buying orders, making the crypto market an incremental market.
Emotional side: Sentiment is slightly warmer, but has not peaked yet
According to the shoeshine boy theory, we used Google Trends and Coinbase's ranking in the US App Store to see if Bitcoin is being discussed enthusiastically around the world.
We use three sets of keywords: bitcoin, ETH and Crypto to check the changes in global search popularity. There is no doubt that bitcoin is the most popular, but it currently falls at 50, which means that the popularity of this word is half of the highest point.
The currency price has been hitting highs recently, but the search popularity is only half of what it was on January 7. We can expect more users to flood into the market.
Let’s take a look at Coinbase’s ranking in the US App Store. It is currently ranked 15th in the finance category, but it is nowhere to be seen on the overall list.
When Bitcoin reached $69,000 at the end of October 2021, Coinbase ranked first on the overall list, and the current sentiment has not yet reached its peak.
Although the financial and emotional aspects indicate that the market has not yet peaked, the recent violent rise in currency prices has the characteristics of high volatility in the short term. At this stage, it is still not recommended to use high-magnification leverage operations to avoid the loss of positions with unchanged prices. Dilemma occurs.
Summary of major events in the currency circle for the week
Uniswap plans to distribute protocol fees to pledged UNI token holders
The Uniswap Foundation issued a document stating that the "Launch Uniswap Protocol Governance" proposal was launched on March 8, 2024. The proposal proposes to upgrade the protocol so that its fee mechanism rewards UNI token holders who entrust and pledge their tokens.
News interpretation: This news is not only super bullish for uniswap, but also bullish for Dex tokens. The overall sector has surged 30% this week.
Pantera Capital Research Report: The total value of DeFi applications in the Bitcoin ecosystem is expected to reach up to US$450 billion
Pantera Capital, a crypto investment institution, recently released a research report stating that compared to the Ethereum ecological DeFi applications accounting for between 8% and 50% of Ethereum’s market value, the total value of DeFi applications on Bitcoin is expected to reach US$225 billion (25% of Bitcoin’s ).
Over time, the total value is estimated to be as high as $450 billion. In addition, the final valuation of the leading DeFi application in the Bitcoin ecosystem may reach US$20 billion (2.2% of Bitcoin), ranging from US$6.5 billion to US$40 billion. This would place it among the top 10 most valuable assets in the crypto ecosystem.
News interpretation: The current TVL of Bitcoin Layer 2 Merlin is US$1.9 billion, which is approximately the sum of Polygon and Avalanche. The future of the Bitcoin ecosystem can be expected.
Arweave releases Arweave AO public test network, and the main network is expected to be launched within the year
Arweave released the Arweave AO public test network, which is designed to support smart contracts and blockchain protocols and is highly scalable. In addition, Arweave also disclosed plans to launch the main network in 2024.