Bitcoin digests regulatory negatives, $30,000 is a bullish breakthrough

The crypto market seems to have digested the negative impact of the US CFTC's lawsuit against Binance . Bitpush terminal data shows that as of press time, Bitcoin is trading at $28,341.07, up 5.36% in the past 24 hours. Since the beginning of the year, Bitcoin has rebounded nearly 71%, reaching a high of $28,803.34 in the past 90 days. The altcoin market is also rising, with Ethereum up 4% and trading at $1,816. XRP rose nearly 9% to $0.54, and Cardano reached $0.38, up 6.8% in 24 hours. The total market value of global cryptocurrencies increased by 4.09% to $1.18 trillion.

As always, the crypto market follows the trend of U.S. stocks, especially technology stocks. The Nasdaq rose 1.21% on Wednesday, on track for its best quarterly performance since 2020, and the S&P 500 rose 0.89%. Some Wall Street traders are optimistic that the banking crisis that rocked the market this month is about to end, and that the Federal Reserve may pause its interest rate hikes sooner than previously expected .

The number of tokens deposited in exchanges has increased, and market sentiment is neutral

According to a report published by Glassnode this week, on-chain indicators show an increase in the number of tokens deposited on exchanges, indicating that some investors are selling to take profits, with most of the selling pressure coming from short-term holders.

The data shows that the sell-off had already begun shortly before the CFTC announced its lawsuit, with short-term holders accounting for more than 90% of total inflows, with about 65% of addresses in profit. Short-term holders are defined as addresses that hold for an average of 21 days.

From a macro perspective of on-chain activity, Glassnode measures BTC on-chain activity through the ratio of Coin Days Destroyed (CDD) to Coin Days Created (CDC), which is currently at its lowest point since November 29, 2020. This metric takes into account two factors: the number of tokens held in the wallet and the number of days they are held. The activity of a particular cryptocurrency increases when long-term holders sell their positions, and decreases when they accumulate tokens to hold. The trend in recent weeks shows that CDD has risen slightly, but the degree is still far below the typical bull market level. This shows that the average token sold is still relatively "new", that is, the current sellers are mainly short-term holders.

Glassnode analysts believe that in the current market, the market is still in a relatively "quiet" range, which is a typical bearish market, early bull market, and the transition period between the two.

$30,000 as a bullish upside breakout

Arthur Hayes , co-founder and former CEO of BitMEX , explained Bitcoin's rally in a tweet. He believes that fear, uncertainty and doubt (FUD) seem to be the factors driving the current bull run. Although the CFTC's civil lawsuit against Binance has led to an outflow of about $2 billion from the platform, Bitcoin's reaction shows that Bitcoin's future is not related to any entity outside of the core technology that supports the crypto industry. Bitcoin is aiming to break through the $30,000 resistance level, and FUD may help trigger this new high.

Vijay Ayyar, head of international at cryptocurrency exchange Luno, commented: “Generally speaking, when price action starts to absorb negative news so quickly, it’s a sign that the market is bullish and trending upwards. The CFTC case against Binance, while very significant, doesn’t seem to have had much of an impact on the market… Overall, it looks pretty bullish here, with Bitcoin reclaiming $28,000 and the next upside target being $30,000.”

Trading analyst Skew said in a tweet that in order for the short-term uptrend to continue, bulls need very high levels of funding: "Liquidity requirements between $28,000 and $30,000 are high and will require some pretty big market buying to get through here."

Additionally, a key data point could be the release of the US Personal Consumption Expenditures (PCE) index on March 31, which contains important insights into US inflation trends. If Bitcoin reacts to the PCE data that exceeds expectations, the month’s close could still be volatile .