Bitcoin (BTC) starts the last week of February in a volatile mood as a crucial area of resistance fails to break.After a classic “fakeout” during low-
Bitcoin (BTC) starts the last week of February in a volatile mood as a crucial area of resistance fails to break.
After a classic “fakeout” during low-volume weekend trading, BTC/USD is back below $25,000 with bulls still lacking momentum.
The largest cryptocurrency saw what looked like the next stage of its 2023 recovery last week, making swift gains and even tapping new six-month highs.
The good times were not to continue, however, and February’s progress has been much slower and hard won than January’s 40% gains. How will the rest of the month pan out?
A critical monthly close is due, along with a potential external price trigger in the form of minutes from the United States Federal Reserve.
Meanwhile, Bitcoin network fundamentals are due to leap to yet another all-time high, and miners are in full recovery mode.
Cointelegraph takes a look at these factors and more in an overview of BTC price perspectives for the final week of February.
RSI “bearish divergence” causes alarm
After a mostly calm start to the weekend after days of macroeconomic data reactions, Bitcoin woke up late Sunday to rise back above $25,000.
This was not to last, however, and as Cointelegraph reported, signs on exchange order books pointed to manipulative moves by large-volume traders.
A subsequent comedown after the weekly close took BTC/USD below $24,000 before a bounce back to the same levels as Saturday, where the pair still traded at the time of writing, according to data from Cointelegraph Markets Pro and TradingView.
For traders, there was naturally cause to be wary.
“Not paying much attention to weekend PA.. BTC typically saves it’s meaningful moves for US stock market hours,” Crypto Chase wrote in part of a Twitter summary.
Monitoring resource Material Indicators, which originally flagged the order book activity, meanwhile queried how long the phenomenon might continue with bulls powerless to make inroads higher.
Do you think support will hold at the notorious bid wall to play the range again or will it spoof and dump?
Remember #TradFi Markets are closed Monday. If you’re playing the game with Notorious B.I.D., manage your risk accordingly. pic.twitter.com/ZyZlHTMFWM
— Material Indicators (@MI_Algos) February 19, 2023
An additional chart of the Binance order book confirmed that major bid support, known as a “bid wall,” had moved lower to $23,460, giving spot price room to drift lower alongside.
Fellow trader and analyst Matthew Hyland meanwhile admitted that it was “really hard to tell” whether Bitcoin could break higher on short timeframes.
Holding the area around $22,800 in the event of a pullback, followed by the key breakout, however, “wouldn’t surprise me,” he said on the day.
More concerned about the strength of the rally was Venturefounder, a contributor to on-chain analytics platform CryptoQuant.
In a Twitter thread, he warned that even external factors such as “macro weakness” could have an immediate bearish impact on crypto markets.
“Bitcoin bearish RSI divergence continues… Almost the exact opposite way of May-July 2021 period. I think any macro weakness can have BTC snap back to $19-20k real quick,” part of comments stated.
Venturefounder referenced the Relative Strength Index (RSI) metric, which measures how overbought or oversold an asset is at a given price point. In 2021, RSI was increasing versus a BTC price correction, this subsequently ending in current all-time highs of $69,000 in November that year.
All eyes on FOMC minutes and U.S. dollar
What form that “weakness” on macro markets might take remains to be seen.
The upcoming week holds considerably fewer potential macro triggers than the last, with a sprinkling of U.S. data releases including personal spending in the form of the Personal Consumption Expenditures (PCE) Index.
The event on most crypto pundits’ radar, however, is the release of the minutes from February’s Federal Open Market Committee (FOMC) meeting at the Fed.
This was where the latest benchmark interest rate hike was decided, and expectations now are for Fed Chair Jerome Powell to have included talk of a moratorium on rate hike policy — if only theoretically.
“We also have FOMC minutes releasing on Wednesday where Powell will describe what a rate hike ‘pause’ could look like,” Crypto Chase mentioned about the event.
“Middle of upcoming week is where I start considering swing entries.”
Not everyone is convinced that the FOMC minutes will be plain sailing, however. Among them is financial market research resource Capital Hungry, which this week warned that “sneaky hawkish revisions” may be revealed.
“Feds sneak in hawkish revisions out of the spotlight (not an active FOMC) with market already adjusted to CPI revisions and Jan report. PCE data feeds into elevated…
cointelegraph.com