Bitcoin: Assessing the good, bad, and ugly as BTC ‘Marches’ into April

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  • Bitcoin’s organ­ic demand has been increas­ing since spot trad­ing out­paced per­pet­u­al trad­ing activity.
  • The U.S oper­a­tion choke 2.0 could impact the April BTC performance.

The cryp­to mar­ket, led by the quar­ter-reviv­ing Bit­coin [BTC], had a march full of ups and downs in between cyn­i­cal and opti­mistic views. Nev­er­the­less, the king coin could end the month with a 21.49% 30-day hike. How­ev­er, there has been some devel­op­ment around the mar­ket pro­pelled by macro­eco­nom­ic fac­tors and cycle reversal.

How much are 1,10,100 BTCs worth today?

As such, the lat­est Capri­ole newslet­ter, put togeth­er by Charles Edwards, touched on this aspect. 

Bumps on the pathway to honor

Accord­ing to the dig­i­tal asset hedge fund, BTC’s price action has been large­ly fueled by organ­ic demand. This was because the per­pet­u­al dom­i­nance has been in a free fall for quite some time.

The met­ric describes the estab­lished ratio of deriv­a­tives trad­ing to spot posi­tions. And with the per­pet­u­al dom­i­nance down, it meant that spot drove appre­ci­a­tion, and the ear­ly bull mar­ket stages might be here.

Bitcoin perpetual dominance

Source: Capri­ole

How­ev­er, it is impor­tant to admit that the ecosys­tem strug­gled with reg­u­la­to­ry issues and tra­di­tion­al finan­cial problems. 

But it seemed Bit­coin has been able to with­stand the heat. As a mat­ter of fact, these chal­lenges helped raise the Short-to-Long-Term Real­ized Val­ue (SLRV) rib­bons. This implied that short-term mar­ket activ­i­ty out­paced the long-term. In Capriole’s words,

“In Q4 2022, the rib­bons bot­tomed at lev­els com­pa­ra­ble to the 2018 lows, and have since gone expo­nen­tial into Q1 2023. This is anoth­er clear sign of a macro shift in Bit­coin adoption.”

Bitcoin SLRV ribbons

Source: Glassnode

Bitcoin: Crunches, costs, and revival

Fur­ther­more, the report not­ed that the cur­rent liq­uid­i­ty cri­sis was just one out of two. And the Bit­coin reac­tion to the first could be sim­i­lar to the lat­ter part, espe­cial­ly with reg­u­la­tors and insti­tu­tions out of the U.S. eas­ing their per­se­cu­tion of the dig­i­tal asset industry.

Anoth­er met­ric con­sid­ered to have favored Bit­coin is its pro­duc­tion cost. For most of 2022, invest­ments geared toward Bit­coin pro­duc­tion were at extreme levels. 

With the end of Q1 here, it means the high costs have out­stripped the BTC trad­ing price for more than 365 days. Although this is bad for min­ers, it serves as con­fir­ma­tion of the coin’s under­val­ued state.

Bitcoin production cost and mining profitablity

Source: Capri­ole

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The quan­ti­ta­tive Bit­coin algo­rithm provider opined that the U.S. oper­a­tion tar­get­ed at legit cryp­to firms to restore banks’ wor­thi­ness could derail BTC’s growth in April. How­ev­er, the coin has proven to detach itself from macro­eco­nom­ic fac­tors recent­ly. So, there is a chance that it evades these poten­tial sanctions.

Last­ly, April’s poten­tial to repli­cate the March per­for­mance looks blur­ry. But the present state of affairs aligns with a recov­ery trend and poten­tial adop­tion increase.

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