Bitcoin (BTC) starts the last week of February in an unstable mood as a key resistance area cannot be broken.
After a classic “cheat” during low volume weekend trading, BTC/USD has fallen back below $25,000 with the bulls still lacking momentum.
Last week, the biggest cryptocurrency endured what looked like the next phase of the 2023 recovery, posting rapid gains and even hitting new six-month highs.
However, the good times were not to last, and February’s progress was much slower and more difficult than January’s 40 percent gain. How will the rest of the month go?
A critical close of the month is expected, as well as a potential external price trigger in the form of US Federal Reserve minutes.
Meanwhile, the fundamentals of the Bitcoin network should jump to another all-time high and miners are in full recovery mode.
Cryptooshala takes a look at these factors and more in its BTC Price Outlook Review for the last week of February.
“Bearish Divergence” RSI is worrisome
After a mostly calm start to the weekend after several days of reaction to macro data, Bitcoin woke up late on Sunday, rising above $25,000.
However, this did not last long, and, as Cryptooshala reported, the signs in the stock order books indicated the manipulative actions of large traders.
The subsequent post-week close drop saw BTC/USD slip below $24,000 before returning to the same levels as Saturday, where the pair was still trading at the time of writing, according to data from Cryptooshala Markets Pro and trade view.
Traders naturally had reason to be wary.
“Not paying much attention to PA weekends. BTC usually maintains its meaningful moves during US stock market hours.” – Crypto Chase wrote in the summary section of Twitter.
Material monitoring resource indicators that initially marked order book activity were meanwhile wondering how long this phenomenon could continue when the bulls were unable to move higher.
Do you think support will hold on to the proverbial betting wall to win back the range, or will it spoof and fold?
Remember #tradfay Markets are closed on Monday. If you are playing a Notorious BID game, manage your risk accordingly. pic.twitter.com/ZyZlHTMFWM
— Material indicators (@MI_Algos) February 19, 2023
An additional diagram from the order book, Binance confirmed that the main order support, known as the “order wall”, had dropped to $23,460, allowing the spot price to drift lower.
Meanwhile, fellow trader and analyst Matthew Hyland acknowledged that it is “really hard to say” whether Bitcoin can go higher on the shorter timeframes.
However, holding the area around $22,800 in the event of a pullback followed by a key breakout “wouldn’t surprise me,” he said. said in a day.
More concerned about the strength of the rally was Venturefounder, a member of the online analytics platform CryptoQuant.
In a tweet, he warned that even external factors such as “macro weakness” could have an immediate bearish effect on crypto markets.
“Bitcoin’s RSI bearish divergence continues… Almost the exact opposite of the May-July 2021 period. I think that any macroeconomic weakness could cause BTC to go back to $19-20k very quickly,” part of the comments. declared.
Venturefounder referred to the Relative Strength Index (RSI), which measures how overbought or oversold an asset is at a given price point. In 2021, the RSI was rising compared to the BTC price correction, which subsequently led to the current all-time high of $69,000 in November of that year.
All eyes on the FOMC protocols and the US dollar
What form this “weakness” may take in the macro markets remains to be seen.
There will be significantly fewer potential macroeconomic triggers this coming week than last week, with few data releases from the US, including personal spending in the form of the Personal Consumption Expenditure Index (PCE).
However, the event that is in the field of view of most crypto experts is the publication of the minutes of the February meeting of the Federal Open Market Committee (FOMC) at the Fed.
This is where the decision on the latest hike in the benchmark interest rate was made, and Fed Chairman Jerome Powell is now expected to turn on the talk of a moratorium on interest rate hike policy – at least in theory.
“We also have the FOMC minutes posted on Wednesday where Powell describes what a ‘pause’ in rate hikes could look like,” Crypto Chase said of the event.
“In the middle of next week, I’m starting to look at swing entries.”
However, not everyone is convinced that the FOMC protocol will be simple. Among them is financial market research resource Capital Hungry, which this week warned that “dastardly hawkish revisions” could be found.
“Feds are creeping towards hawkish revisions out of the spotlight (not active FOMC) as the market has already corrected with CPI revisions and the January report. The PCE data is fueling heightened inflationary sentiment.” argued in the comments on Twitter.
Any return of inflationary trends will help strengthen the US dollar, which spent the last macro trading day of last week erasing previous gains.
Matthew Dixon, founder and CEO of crypto-rating platform Evai, outlined a bearish scenario for the US Dollar Index (DXY), which would be a bullish tailwind for risky assets, including cryptocurrencies.
Looking at the outside #DXY still. If we are already on the way down to complete wave Y, then this will be positive for #BTC #this #Crypto and risky assets in general #Eve pic.twitter.com/9OEHTG1d1v
— Matthew Dickson, Evai CEO (@mdtrade) February 20, 2023
Analyst: “cloud” of moving averages needs to be broken
As Cryptooshala continues to report, bitcoin bulls have a problem that is becoming more and more evident on shorter timeframes – the 200-week moving average (WMA).
A classic “bear market” trendline, the 200WMA has been acting as resistance since mid-2022, with BTC/USD spending more time lower than ever before.
Restoring the level would be a notable achievement, but so far all attempts have met with a categorical refusal.
“If Bitcoin manages to break above the 200-week MA cloud, which is becoming more and more likely, we will again see much more widespread coverage of the TradFi cryptocurrency,” Caleb Franzen, Senior Market Analyst, Cubic Analytics, summarize on the weekend.
Franzen also showed short-term levels where the rate is $25,200 requiring a breakout.
Short term levels #Bitcoin continues to fight… pic.twitter.com/Qmx9UBKyht
— Caleb Franzen (@CalebFranzen) February 19, 2023
However, the “cloud” he was talking about includes more than just 200WMA – Bitcoin’s 50WMA is currently $24,462, which is exactly the same as the current spot price focus.
In addition, requests in the stock order books are clustered around 200WMA, which exacerbates the problems associated with the transition from resistance to support.
IN research published on Feb. 18, Franzen described the WMA cloud as one of “two major signals that add fuel to the fire” along with the realized price.
“BTC was rejected in this dynamic range for the first time in August 2022 and was briefly rejected at this level earlier in the week. Until he can break higher on his second try?” – he asked.
Hashrate, difficulty in line for new records
In the familiar silver lining of Bitcoin network basics remain bullish as the month draws to a close.
At the next automatic reconfiguration, the difficulty will increase by about 10% to the existing indicator. This offsets the modest decline in the previous adjustment to push difficulty to new all-time highs.
This is a key yardstick for gauging bitcoin miner sentiment, as such significant growth suggests corresponding successes in the competition for block subsidies.
This comes amid increased coverage of so-called “ordinal” fees, with miner profitability clearly recovering after months of pressure.
Network analytics company data glass knot confirms this. This shows that miners have begun to hold more BTC than they sell in rolling monthly periods, reversing the net selling trend that has existed since mid-January.
Raw data from MiningPoolStats Meanwhile, the hash rate of the Bitcoin network is also on an upward trend, staying above 300 exahashes per second (EH/s).
“Unstoppable!” economist and analyst Jan Wüstenfeld commented about this phenomenon as its 30-day moving average climbed to a new all-time high last week.
Joe Burnett, Chief Analyst at Blockware, described hash rate growth as “really relentless”.
“The 14-day moving average of the total global hashrate is now ~290 EH/s. Bitcoin miners are scouring the Earth for cheap, wasted surplus energy,” he added along with Glassnode’s numbers.
Longtime bitcoin market participants will remember the once-popular phrase “price follows hash rate,” which postulates that a large enough hash rate uptrend will inevitably lead to bullish implications for BTC price action.
The Greediest Bitcoin Since All-Time Highs
$25,000 is a headache for reasons beyond solid resistance – breaking this level could be an unsustainable move for Bitcoin.
Bitcoin’s bullish price action continues to support rallies in FIL, OKB, VET and RPL.
The latest data from research firm Santiment shows that around these multi-month highs, cryptocurrency market sentiment is simply getting too greedy.
“Bitcoin’s eight-month high yesterday was accompanied by tremendous euphoria,” the post reads. commented on a graph showing activity in social networks.
“Perhaps too much, as positive comments on social media could create a local top. Just like the negative comment on Feb 13 probably contributed to the downfall.”
This phenomenon is also visible in altcoins, with Santiment highlighting Dogecoin (DOGE) as a key example this month.
“This pattern of social volume and very positive attitude towards Dogecoin perfectly illustrates how euphoria creates price highs. Regardless of your opinion about DOGE, the hype for this particular asset historically portends a market correction. concluded.
Forever popular Crypto index of fear and greed Meanwhile, this week, “greed” is the predominant flavor of crypto sentiment.
Bitcoin’s push for highs coincided with the 62/100 for the index, marking new highs in the aftermath of the November 2021 spike to $69,000 on BTC/USD.
The views, thoughts and opinions expressed here are those of the authors only and do not necessarily reflect or represent the views and opinions of Cryptooshala.
Credit : cointelegraph.com
