Feb 20, 2023
Bitcoin Volatile as Bulls Struggle to Push Price Above $25K
The last week of February is off to a volatile start for Bitcoin (BTC) as a crucial resistance area fails to be broken. After a weekend of low-volume trading and a ‘fake-out’ of the next stage of its 2023 recovery, BTC/USD is back below $25,000, leaving bulls without momentum. The largest cryptocurrency saw a 40% gain in January, but February’s progress has been much slower and hard-won. There are a few factors at play this week that could affect the price of Bitcoin, such as the release of minutes from the United States Federal Reserve, a potential external price trigger, and Bitcoin network fundamentals that are expected to reach yet another all-time high.
The weekend saw Bitcoin rise back above $25,000, but this was not to last. Crypto Chase commented on Twitter that Bitcoin typically saves its meaningful moves for US stock market hours. Material Indicators, a monitoring resource, flagged the order book activity and asked if the bid support would hold or if it would spoof and dump. Fellow trader and analyst Matthew Hyland commented that it was hard to tell whether Bitcoin could break higher on short timeframes, and he suggested that holding the area around $22,800 in the event of a pullback would not be surprising.
Venturefounder, a contributor to on-chain analytics platform CryptoQuant, warned that external factors such as “macro weakness” could have an immediate bearish impact on crypto markets. The upcoming week holds fewer potential macro triggers than the last, but the most important event is the release of the minutes from February’s Federal Open Market Committee (FOMC) meeting at the Fed. The market is expecting the Fed Chair Jerome Powell to talk about a moratorium on rate hike policy. Capital Hungry warned that the FOMC minutes could contain sneaky hawkish revisions and that PCE data could feed into elevated inflation sentiment.
Bitcoin bulls have a problem, which is becoming increasingly evident on short timeframes — the 200-week moving average (WMA). This classic “bear market” trend line has acted as resistance since the middle of 2022, and all attempts to reclaim the level have been met with flat rejection so far. Caleb Franzen, senior market analyst at Cubic Analytics, commented that if Bitcoin manages to break above the 200-week MA cloud, there will be more coverage of crypto from TradFi.
The good news is that Bitcoin network fundamentals are keeping the bullish vibe firmly intact as the month draws to a close. The next automated readjustment will see difficulty adding an estimated 10% to its current tally, sending it to new all-time highs. Data from on-chain analytics firm Glassnode shows that miners have begun retaining more BTC than they sell on rolling monthly timeframes, reversing a trend of net sales in place from mid-January. Raw data from MiningPoolStats shows that Bitcoin network hash rate is also preserving its upward trend, remaining at over 300 exahashes per second (EH/s).
The latest findings from research firm Santiment suggest that crypto market sentiment becomes too greedy around the 8-month highs. The ever-popular Crypto Fear & Greed Index shows “greed” as the overriding sentiment flavor across crypto this week, with a reading of 62/100 for the Index, marking new highs since the November 2021 push to $69,000 on BTC/USD.
All eyes are on the US dollar this week and the FOMC minutes, as any return of inflationary tendencies would boost U.S. dollar strength, which could be a bullish tailwind for risk assets, including crypto. Matthew Dixon, founder and CEO of crypto rating platform Evai, commented that if the US dollar is already on the way down to complete the Y wave, this will be positive for Bitcoin, Ethereum, and other cryptocurrencies.
The last week of February is an important one for Bitcoin, with a critical monthly close due and a number of external price triggers that could affect its price. As always, traders and analysts are keeping a close eye on the order books, the US dollar, and the network fundamentals as they try to predict where Bitcoin is headed in the days to come.
Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.
