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Golden Cross Completes, DCG Sells Grayscale Shares

Bitcoin sees golden cross which last hit 2 months before all-time high, while it dominates as primary focus for digital asset investors. DCG sells grayscale trust shares.

Februrary 7, 2023 - Bitcoin price has been stable in the last 24h with not much volatility, despite the completion of the golden cross in the daily price chart. The golden cross in the daily price chart happens when the 50-day moving average crosses over the 200-day moving average, which occurred for the last time in Sep 2021, two months before Bitcoin’s latest all-time high. Although this is a short-term bullish signal, market participants are also monitoring the potential formation of a death cross in the weekly price chart with the opposite dynamic of moving averages. This seems to have put traders in a waiting mode, on top of the expectations for US inflation release on Feb 14, in our view.

The investors’ interest in digital assets has increased significantly in the last week, with inflows totaling US$76mn, for the fourth consecutive week, according to the European cryptocurrency investment firm CoinShares’ “Digital Asset Fund Flows” report. The year-to-date inflows reached US$230mn in 2023, showing a change in investor sentiment. Investors are primarily focusing on Bitcoin, with weekly inflows of US$69mn, accounting for 90% of total flows for the week, coming from the US, Canada and Germany. In our view, these positive inflows into digital assets point out investors’ growing confidence in the crypto market.

At the end of 2022, the main specific risks related to the crypto market were the consequences of FTX collapse, mainly the impact on the DCG group. It seems that this risk has been mitigated with some agreements being announced in the Genesis, one of DCG’s distressed subsidiaries, bankruptcy court. Moreover, DCG is selling part of its shares in the Grayscale Bitcoin Trust (GBTC) at a sharp discount. This may be part of the efforts to return customers’ resources, in our view.

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