Bitcoin price action is making history this week, but a 2022 bear market is still haunting the charts for all the wrong reasons.
Bitcoin started the week just below $22,000 as bulls failed to recover positions lost in February.
After a mild volatility over the weekend, BTC remains close to three-week lows as fresh ground emerges at the $22,000 resistance level.
However, the largest cryptocurrency by market capitalization is at the start of a key week of macroeconomic data, with plenty of room for volatility to return.
First up is the U.S. Consumer Price Index (CPI), which will be released on February 14.
More data will be released this week. Therefore, analysts are closely watching the reaction of the cryptocurrency and dollar markets.
With regards to Bitcoin, data has shown that whales are taking advantage of current levels to buy, offering a glimmer of hope for those looking forward to possible price increases in 2023.
Meanwhile, a worrisome new chart event is troubling some – can Bitcoin avoid a sharp drop by confirming its first “death cross” on the weekly chart? ?
This article explores these questions and more in next week’s weekly review of the underlying drivers of the Bitcoin market.
Bitcoin Confirmation”break down“Chart of the Week”
The latest weekly close of around $21,800, according to TradingView, brought some surprises to both sides of bitcoin trading.
That was the lowest level since mid-January, signaling a long-awaited pullback after a barely challenged January bullish run.
Attention is now on holding key support levels. These levels mostly take the form of long-term trendlines that were repurposed as support during the January rally.
In a new tweet on Feb. 13, popular trader Crypto Tony confirm $21,400 is where things get interesting.
“From there, we can really tell if the bulls are going to rescue the bears or destroy them.”
BTC Price Chart | Source: Crypto Tony
Zooming in on the chart, account Daan Crypto Trades notes that BTC is sitting between the 200-period and 400-period exponential moving average (EMA) on the 4-hour time frame.
“Looks like we’re about to open a small gap down below. All in all, just another uneven trading weekend for BTC as several altcoins rallied. Waiting for CPI. Probably not much action until then”, he summarize.
Bitcoin Chart | Source: Daan Crypto Exchange
Meanwhile, a stronger line is emerging in the form of the 200-day moving average. While still at $20,000, this line is now crucial for the bulls to maintain control.
Trader and Analyst Rekt Capital warn Things are not much better on the weekly time frame. He flagged $21,839 as a point of interest and said a close below that level for the week would “confirm BTC’s collapse,” a move that finally came true.
This level has acted as resistance several times since the middle of last year.
Bitcoin Chart | Source: Rector Capital
‘Most important’ CPI coming soon
The macro backdrop this week will be dominated by one data point. This is the January CPI released on February 14th.
Many see inflation continuing to decline, a move that could support risky assets despite a drop in prices in early February.
The variable CPI calculation complicates matters, while analysts debate its significance compared to the overall downward trend in inflation.
However, this month’s figures are not only closely watched in the crypto space.
“Tuesday’s CPI report is the most important yet. Uncertainty abounds after a strong January jobs report and a higher ‘adjusted’ December CPI. Both bulls and bears need the report to go their own way Whoever wins will lead the market next month”, capital market newsletter The Kobeissi Letter say Connect with your Twitter followers over the weekend.
Renowned trader and analyst Myles G owns emphasize If CPI rises higher than expected, the cryptocurrency has consequences, warning it will “crash the market.”
Trader Satoshi Flipper said: “Almost every CPI disclosure in the past 6 months has resulted in an immediate drop in prices and then a recovery as traders get used to the data.” notes Research on the Relationship between CPI and Market Fluctuation
US CPI Chart | Source: Bureau of Labor Statistics
The role of the CPI in Federal Reserve (Fed) policy adjustments is also a topic of debate today after Chairman Jerome Powell propose At the end of last year, another indicator may be the “most important” tool for tracking inflation.
With the next interest rate decision in the third week of March, policymakers will get CPI data for February if January proves to be an unexpected anomaly.
“concerns”death cross“First on the weekly chart
This month, Bitcoin was caught between two “crosses” in a bizarre scenario that has divided people over its importance.
A “golden cross” on the daily chart is reportedly conjoining with a “death cross” on the weekly chart.
This death cross is the first on BTC’s weekly time frame, but death crosses on other time frames usually precede sharp price drops.
BTC 1-week candlestick chart and 50, 200-day moving averages | Source: TradingView
Whether the daily golden cross will repeat the historical pattern and move the market remains to be seen, but in the meantime, a brand new cross is in the works.
Caleb Franzen, senior market analyst at Cubic Analytics, noted that Bitcoin’s 1-year EMA fell below the 3-year EMA for the first time.
“This crossover has never happened before and highlights the seriousness of the BTC bear market,” he said Write In the Twitter comments section for February.
In fact, this event happened in mid-December 2022, but since then the 1-year EMA (52-week EMA) has continued to fall, getting deeper and deeper below the 3-year (156-week EMA) and 2-year EMA (104-week EMA) .
exist analyze Meanwhile, Franzen believes the cross could reshape Bitcoin’s bearish behavior. This time may be more difficult and longer than before.
“While many Bitcoin investors note that BTC typically bottoms about 400 days after a bull market peaks, the charts suggest that this time will be different. Considering we haven’t seen this signal until now, it means that the 1-year trend may Will stay below the 3-year trend for longer!”.
The 2-year EMA could also cross below the 3-year EMA, which would also constitute an unprecedented event, he said.
“Personally, I wouldn’t be surprised if this happens over the next 6 months due to further sideways or downside consolidation,” the analyst predicts.
1-week BTC candlestick chart and 52, 104 and 156-day moving averages | Source: TradingView
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whales still involved
Interested in bitcoin at current prices, whales are back.
On Aug. 13, research firm Santiment noted an increase in whale trading activity as BTC fell to $21,600 near the weekly close.
“Bitcoin fell to $21,600 on Sunday and whale addresses responded by trading at 3-month highs,” they said. summarize.
Santiment community contributor sanr_king has call The whale’s move was “significant”.
Bitcoin whale trading chart | Source: Santiment
A snapshot of Binance’s order book activity shows a large whale entity on Feb. 12 and a new sell wall above $22,000 over the weekend.
On-chain analysis resources Material Indicators notes It “suggests that fresh asking liquidity coincides with resistance at the 21-day moving average and the 0.618 Fibonacci.”
“Death crosses are expected to be detrimental to short-term upside momentum no matter how high BTC bulls can push before the W close/open.”
BTC order book data (Binance) | Source: Material index
hodler recovery
Data shows that no matter what the whales choose to do, the average holder has yet to take profits.
Long-term (LTH) holders have been accumulating exceptional new positions over the past month, according to on-chain analytics firm Glassnode.
The Net Holders Change Index hit a 3-month high on Feb. 13, marking a return to holding behavior not seen since the FTX crash.
Bitcoin Hodler net position change chart | Source: Glassnode
The situation for LTH opting out of some tokens is also improving.In the last issue of the weekly “Chain Weekly”, Glassnode had describe Profitability will “recover” in 2023.
They refer to the spend output return ratio (SOPR) metric, which measures the relative proportion of profitable tokens that appear in transactions.
“From the perspective of long-term holders, we can observe that since the collapse of LUNA, it has been in the red. Although the group has been in the red for the past 9 months, there are early signs of recovery, and the potential of LTH-SOPR An uptrend is starting to form.”
Bitcoin LTH-SOPR Chart | Source: Glassnode
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As reported by Cointelegraph
