Bitcoin started the last week of February on a choppy note as it failed to break out of a key resistance area.
With BTC back below $25,000 after a classic “fakeout” on low volume over the weekend, the bulls still lack momentum.
Last week, the largest cryptocurrency by market capitalization continued its recovery in 2023, making quick profits and even hitting a new six-month high.
However, the good times did not continue to this week. The progress in February was much slower, and it was difficult to catch up with the 40% increase in January. So, what does the rest of the month hold?
The important closing time of this month is coming. With the arrival of the Fed meeting minutes, the price trigger of the macro market will bring us?
Meanwhile, if miners fully recover, the fundamentals of the Bitcoin network will jump to another all-time high.
The following article examines these factors and more to get an overview of BTC prices in the last week of February.
“Bearish Divergence” RSI Alert
Bitcoin bounced back above $25,000 late Sunday after days of reacting to macroeconomic data following a near-quiet start to the weekend.
However, that didn’t last long, with reports on the exchange’s order books indicating manipulation by block traders.
The drop a week later pushed BTC below $24,000 before returning to the same level as Saturday, where it is still trading, according to TradingView.
BTC 1-hour price chart | Source: Transaction View
For traders, there are natural reasons to be wary.
Crypto Chase wrote in a Twitter feed: “Not too focused on technical analysis over the weekend. BTC usually reserves major moves during US stock market hours.”
source: cryptocurrency chase
Monitoring resource materials indicators initially flagged order book activity, questioning how long this would last as bulls were unable to push prices higher.
Binance order book charts confirm that the main bid support known as the “bid wall” has dropped to $23,460, making a slide in spot prices possible.
Order Book Data bitcoin | source: Material index
Trader and analyst Matthew Hyland admitted that it’s “really hard to tell” whether Bitcoin can break out of its highs in a short period of time.
However, he said on the day that holding near $22,800 “wouldn’t surprise me” amid a pullback and subsequent major breakout.
price chart bitcoin | source: Matthew Hyland
Meanwhile, Venturefounder, a contributor to on-chain analytics platform CryptoQuant, is more concerned about the strength of the bull market.
in a twitter threadhe warned that external factors such as “macro weakness” could have an immediate bearish impact on the crypto market.
“Bitcoin’s bearish RSI divergence continues…almost exactly the opposite of the May-July 2021 period. I think any macro weakness could push BTC back to $19,000-20,000 soon.”
Venturefounder refers to the Relative Strength Index (RSI), which measures how overbought or oversold an asset is at a given price. In 2021, the RSI rose amid a BTC price correction before closing at its current all-time high of $69,000 in November of that year.
All eyes on the US FOMC meeting minutes and the dollar trend
In the coming week, with significantly fewer underlying macro drivers than last week, the US will release a slew of data, including personal spending in the form of the personal consumption expenditures index (PCE).
However, the event that caught the attention of most cryptocurrency experts was the release of the Federal Open Market Committee (FOMC) meeting minutes at the Federal Reserve in February.
At the meeting, policymakers will decide to raise the benchmark interest rate. Many expect Fed Chairman Jerome Powell to bring up discussions of a pause in rate hikes.
Crypto Chase mentioned the incident:
“We also have the FOMC minutes on Wednesday, where Powell will describe the pause in rate hikes. The middle of next week is when I start looking for entry points for volatility.”
Still, not everyone thinks the FOMC minutes will go smoothly.Among them, Capital Hungry, a financial market research resource, has warn This week, the “stealth hawk modification” may be revealed.
“Fed agencies sneaking hawkish revisions in the spotlight (not when FOMC is active), markets adjust to CPI revisions and January report. High inflation sentiment due to PCE data”.
US Dollar Index (DXY) 1-hour candlestick chart | Source: TradingView
A return to the inflation trend will boost the dollar. In the final macro trading session of last week, the index gave up earlier gains.
Matthew Dixon, founder and CEO of cryptocurrency ratings platform Evai, outlined a bearish scenario for DXY in the direction of bullish risk assets, including cryptocurrencies.
Analyst: The moving average “cloud” will eventually break
Bitcoin bulls are currently in trouble and it is becoming more and more obvious on the short time frame – the 200-week moving average (WMA).
The 200 WMA is the classic “bear market” trendline that has acted as resistance since mid-2022, and BTC has spent more time below this level than ever before.
Recovering its cost would mark a clear achievement, but all attempts so far have been flatly rejected.
Caleb Franzen, senior market analyst at Cubic Analytics, summed it up over the weekend:
“If Bitcoin breaks above the 200-week moving average cloud (which is increasingly likely), we will see more crypto trading coverage again.”
source: Caleb Franzen
Franzen also said that the short-term could be threatened and a break above the $25,200 ceiling would be needed.
The “cloud” he’s referring to is not just the 200 WMA, but also the 50 WMA, currently at $24,462, close to the current spot price.
Additionally, inquiries on exchange order books are piling up around the 200 WMA, making it more difficult to move from resistance to support.
exist study Franzen, published on Feb. 18, described the WMA cloud as one of the “two key signals that add fuel to the fire,” along with the actual price.
“BTC first rejected above this dynamic range in August 2022 and was briefly rejected at that level earlier this week. Can a second come out?”.
BTC 1-week candlestick chart and MA 50, 200 | Source: TradingView
Both computing power and difficulty hit record highs
Meanwhile, Bitcoin network fundamentals remain bullish as the month draws to a close.
It is expected that the difficulty of automatic adjustment in the future will increase by about 10% on the current basis. This would offset the modest drop from the previous correction, bringing the difficulty to a new all-time high.
An overview of the basics of the Bitcoin network | Source: bitcoin network
This is an important gauge of Bitcoin miner sentiment, as such a significant increase suggests a commensurate progress in the block subsidy competition.
This is due to an increase in the “Ordinals” fee range and the apparent recovery of miner profitability after months of pressure.
Changes in miners’ net positions bitcoin | source: glass node
Data from on-chain analytics companies glass node Confirm this. Miners are starting to hold more BTC than they have sold on a monthly time frame, reversing a net selling trend that began in mid-January.
At the same time, the raw data Mining Pool Statistics It shows that the hash rate of the Bitcoin network has also maintained an upward trend, exceeding 300 exahashes per second (EH/s).
Bitcoin Hashrate Raw Data Chart | Source: MiningPoolStats
“Unstoppable!” economist and analyst Jan Wuestenfeld commented on the phenomenon, as the 30-day moving average climbed to its own all-time high last week.
source: Jan Westenfeld
According to Joe Burnett, Head of Analytics at Blockware describe Hashrate growth “truly unstoppable”:
“The 14-day moving average of the total global hashrate is currently around 290 EH/s. Bitcoin miners are looking for cheap, wasteful and redundant energy across the planet.”
Longtime bitcoin market participants will recall the once popular phrase “price follows hash rate.” This is assuming the hash rate uptrend is enough to have an inevitable bullish effect on BTC.
Bitcoin is the most “greedy” since ATH
$25,000 is a headache because not only is it a solid resistance level, but breaking it would also likely be an unsustainable move for Bitcoin.
The latest findings from research firm Santiment point to cryptocurrency market sentiment becoming too greedy near these multi-month highs.
“Bitcoin hit a new 8-month high yesterday, very exciting. Maybe a little too much, as active comments on social platforms may have created local peaks. Negative comments like February 13th may have helped to bottom out. “
mental map bitcoin | source: mood
This phenomenon is also reflected in the altcoin market and mood Take Dogecoin as an example this month.
“Dogecoin’s very positive sentiment and social volume patterns perfectly illustrate how excitement can create price tops. No matter what you think about DOGE, hype for this asset in particular has historically portended market corrections.”
Meanwhile, the Crypto Fear and Greed Index shows that “greed” is the dominant sentiment in cryptocurrencies this week.
Bitcoin rallied to a high that coincided with the index’s 62/100, marking a new high since BTC’s November 2021 rally to $69,000.
Crypto Fear and Greed Index | Source: alternative.me
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As reported by Cointelegraph
