On-Chain Commentary
- Bitcoin vastly outperformed the S&P 500 and Nasdaq 100 in Q1
- Bullish continuation based on technicals remain a possibility into Q2
- Since the SVB collapse, USDC has had $10B in outflows, USDT $8B of inflows
Another quarter comes to a close and in true form, Bitcoin saw dramatic quarter-over-quarter price movement. Historically, the relative price action seen by Bitcoin has closely followed three-month cycles, with very few quarters ending with less than a 10% price change. Since 2013, Q2 and Q4 have held the most positive performance with Q1 and Q3 experiencing the most negative periods. This historical pattern makes Q1 2023s strong positive performance slightly unusual. Bitcoin has also rarely had back to back positive quarters when Q1 closed above +15%. Nevertheless, Q2 has historically been the best performing quarter for all cryptocurrencies.
The Bitcoin and Ethereum price continued to hold relatively flat throughout last week in the face of low time frame technical chart patterns suggesting reversal attempts. After a multi-month consolidation, Bitcoin remains in range expansion territory with a bullish target in the $30,000 range. Ethereum remains within a multi-month range and carries at range expansion target in the $2,500 range. If further bullish rallies fail to materialize, technical support for Bitcoin and Ethereum based on high timeframe moving averages, sits near the $25,000 range and the $1,500 range, respectively.
Reverberations from the Silicon Valley Bank fiasco continue for Circle’s USDC. Despite the stablecoin being fully backed by short-dated US treasury and cash, USDC has seen over $10B in outflows since March 10th. According to Circle’s website, the reserves are custodied by The Bank of New York Mellon and managed by Blackrock. Tether has gained just over $8.0B in the same time period. Tether’s dominance relative to the entire stablecoin circulating supply now sits at 61%, which should continue to grow as BUSD will only be redeemed and not issued.
