Bitcoin and Ethereum trade sideways, AI concept coins lead the gains

Cryptocurrency market trading heat cooled slightly on Wednesday, and the total market value of cryptocurrencies fell 1.2% to $2.6 trillion as of the close of U.S. stocks that day. Bitcoin and Ethereum faced resistance at key levels.

Bitcoin hit a high of $71,754 on the day before falling back to $69,793, a 1.2% drop. Ethereum is currently trading at $3,516, down 1.35% in the past 24 hours.

In the altcoin market, native tokens of blockchain AI concept projects Fetch.ai, SingularityNET and Ocean Protocol soared amid a proposed merger plan, which is called the "Artificial Super Intelligence Alliance" and the tokens of these projects will be named Artificial Superintelligence (ASI).

Influenced by this news, the existing tokens of these three projects have risen sharply. In the past 24 hours, Fetch.ai (FET) has risen by 15%, SingularityNET (AGIX) has risen by 12%, and Ocean Protocol's token OCEAN has risen the most, up more than 36%. The three projects submitted integration proposals to their respective governance communities today and opened a 14-day consultation period. The proposal vote is expected to be held between April 2 and April 16.

Base Chain continues to lead the meme craze, with the hottest BRETT rising 11% in the past 24 hours. BRETT is inspired by the cartoon character drawn by artist Matt Furie, and its market value was close to $500 million. Coingecko wrote in a newsletter: "It is now clear that meme coins have evolved from a cultural movement to a key tool for driving the adoption of new blockchains."

However, the hype has attracted the attention of regulators. The UK Financial Conduct Authority (FCA) issued a warning to KOLs to beware of "misleading" crypto meme projects. Paid promotion requires approval from regulators to avoid potential criminal charges. The FCA lists "emoji" projects as a key area of ​​online violations.

Cryptocurrency market ‘in the middle of a bull run’

According to a recent report by Grayscale, market cycle indicators show that the cryptocurrency market is “currently in the middle of a bull run” on the back of strong fundamentals and technical factors.

Despite the Bitcoin price rally from $63,800 to $70,000 in the five days leading up to March 27, only $151 million in leveraged short positions were forced to close in the BTC futures market. This suggests that shorts remain cautious despite a whopping $888 million in net outflows from U.S. Bitcoin spot ETFs last week.

On the positive side, Bitcoin has shown resilience, falling from $73,757 on March 14 to $60,795 on March 20 without causing panic among spot ETF investors. Spot ETF flows reversed this week, recording net inflows totaling $418 million on March 26.

Additionally, Grayscale reported that exchanges are holding a notable decrease in Bitcoin, "down 7% since the local Bitcoin supply peak in May 2023," suggesting that supply tightness is partly due to spot Bitcoin ETFs moving BTC into custodial cold wallets for long-term storage as investors expect future price increases.

Is the BTC Pre-Halving Pullback Over?

Analyst Rekt Capital said on the X platform that the price adjustment before Bitcoin halving is consistent with the historical retracement before halving. He wrote in a post on March 25: "The pre-halving pullback happened as expected. Now Bitcoin is back to around $70,000."

Rekt Capital said in a video analysis yesterday that Bitcoin price could break to new all-time highs if the $69,000 all-time high turns into support, saying: “Bitcoin has broken through its all-time high, potentially setting the stage for the end of the pre-halving correction.”

According to a research report by Bitfinex analysts, last week’s Bitcoin price adjustment indicates that the price has formed or is close to forming a local bottom. The analysts said: “We believe that last week’s correction of Bitcoin from its current all-time high of $73,666, equivalent to a correction of approximately 17.5%, indicates that we are close to establishing a local bottom, and in fact the market has begun to follow this rule.”