Bitcoin (BTC) begins a new week under $22,000 as bulls fail to reclaim ground lost in February.
After some minor volatility towards the weekly close, BTC/USD remained near three-week lows as it entered a new status quo with $22,000 as resistance.
The largest cryptocurrency is at the start of an important week of macroeconomic data, however, there are plenty of opportunities for volatility to return.
These first come in the form of the US Consumer Price Index (CPI), whose January print will be released on February 14.
Other data prints will follow throughout the week, and analysts are keeping an eye on the reaction of the US Dollar as well as the crypto markets.
Within bitcoin circles, whales are taking the opportunity to buy at current levels, the data shows, a glimmer of hope for those hoping the 2023 bitcoin price recovery could continue.
Meanwhile, a formidable new chart phenomenon is causing trouble for some – can bitcoin avoid a significant decline as its first weekly “death cross” confirms?
Cointelegraph takes a look at these issues and more in our weekly digest of bitcoin market potential for the week ahead.
Bitcoin Weekly Chart Confirms “Breakdown”
At around $21,800, there were few surprises in the latest weekly close for those on both sides of the bitcoin trade, data from Cointelegraph Markets Pro and TradingView show.
At its lowest since mid-January, the event sealed a long-awaited retracement for BTC/USD, as it experienced January with practically unfettered upside.
Now, the focus is shifting to key support levels, mostly long-term trend lines reclaimed as support during the January run-up.
In a fresh update to Twitter followers on February 13, popular crypto trader Tony Confirmed That $21,400 is where the situation could get interesting.
“From there we can really assess whether the bulls have it in them to protect the bears, or lead them to the slaughter,” reads part of the commentary.
BTC/USD annotated chart. Source: Crypto Tony / Twitter
Dan Crypto Trades partner account Zoom noted that BTC/USD sat between the 200-period and 400-period Exponential Moving Averages (EMA) on the 4-hour time frame.
“It looks like we’ll be opening up with a small gap beneath us as we speak. Overall just a choppy weekend for BTC with some alts popping. Waiting for the CPI, probably before that he will not take much action. Abbreviation,
BTC/USD annotated chart. Source: Dan Crypto Trades/Twitter
A more formidable line in the sand meanwhile comes in the form of the 200-day MA. While still at $20,000, the level is now a crucial one for the bulls to keep in check.
Trader and analyst Rekt Capital, the picture is no better on the weekly timeframe warned, Flagging $21,839 as a point of interest, he said that a weekly close below it would “confirm a break” in BTC/USD, a move that eventually came true.
That same level had acted as resistance several times since the middle of last year.
BTC/USD annotated chart. Source: Rect Capital/Twitter
“Most Important” CPI Comes To Print
The macro landscape in particular is set to be dominated by one data point this week, with the release of the US Consumer Price Index (CPI) for January on February 14.
Bets are on for a sustained fall in inflation that could still spur riskier assets, despite the early February slump.
picture is more complex than a shuffling How is the CPI calculated, but analysts dispute its significance versus the overall trend of declining inflation.
Despite this, however, this month’s print is being watched far beyond crypto circles.
“Tuesday’s CPI report is the most important yet. After a strong January jobs report and December CPI ‘revised’ high, uncertainty is everywhere,” capital markets newspaper, Kobeissi Paper, Said Twitter followers on the weekend.
“Both bulls and bears need reports to go their way. Whichever side is right will drive the market next month.
Meanwhile popular trader and analyst Miles G. underlined the Should the result for crypto come in higher than the CPI expectation, it warned that it would “dump the market big.”
“Almost every CPI reveal over the past 6 months has been a quick dump, then an immediate recovery after traders digest the data,” said fellow trader Satoshi Flipper. noted Regarding the relationship between CPI and market volatility.
“Will this time be different?”
US CPI chart. Source: Bureau of Labor Statistics
The extent to which the CPI plays a role in policy adjustments at the Federal Reserve is currently a matter of debate, with Chairman Jerome Powell suggesting late last year that another metric may be the “most important” tool for monitoring inflation. .
With the next decision on interest rates only in the third week of March, however, policymakers will have the February CPI numbers should January prove an unexpected anomaly.
First-Weekly “Death Cross” Worries
Bitcoin has been caught in a curious scenario this month between two “crosses” that are dividing opinion about its significance.
As Cointelegraph reported, the “golden cross” on the daily time frame is converging with the “death cross” on the weekly chart.
The latter is a first of its kind for BTC/USD, but death crosses on other time frames are often preceded by significant price declines.
BTC/USD 1-week candle chart (Bitstamp) with the 50, 200MA. Source: TradingView
Will the daily golden cross repeat the historical pattern and the market will bounce back, but in the meantime, another new cross is happening.
As noted by Caleb Franzen, Senior Market Analyst at Cubic Analytics, bitcoin’s 1-year exponential moving average (EMA) is about to drop below its 3-year counterpart for the first time.
“This crossover has never happened before, highlighting the severity of the BTC bear market,” he added wrote In part of the Twitter commentary on 11 February.
This event actually happened in mid-December, but the 1-year EMA has continued to decline since then, falling further below the 3-year and 2-year EMAs.
In an accompanying analysis, Franzen argued that the crossover could redefine bitcoin bear market behavior. This time, depression can be harder and more drawn out than before.
“While many bitcoin investors have noted that BTC typically bottoms approximately 400 days after a bull market peak, this chart suggests that this time is different,” he wrote.
“Given that we have never seen this signal so far, the implication is that the 1-year trend may well be below the 3-year trend!”
He continued that the 2-year EMA could also move below the 3-year EMA, which would similarly be the first of its kind.
“Personally, I would not be surprised if this results in further upside action or downside consolidation within the next 6 months,” the analysis forecast.
BTC/USD 1-week candle chart (Bitstamp) with 52, 104, 156MA. Source: TradingView
whales hang on
Whales may have already broken their silence when it comes to interest in bitcoin at current prices.
In data released on February 13, research firm Sentiment noted that whales had increased trading activity as BTC/USD fell to a weekly close around $21,600.
“Bitcoin Plunges to $21.6k on Sunday, and Whale Addresses Respond by Transacting at Their Highest Rate in 3 Months,” it Abbreviation,
Sentiment community contributor sanr_king called the whale’s move “significant.”
Bitcoin whale transaction chart. Source: Sentiment/Twitter
Meanwhile a snapshot of order book activity at Binance appeared on February 12 with the presence of a major whale unit as well as a new selling wall above $22,000 on the weekly close.
On-chain analytics resource Material Indicator, which uploaded the data, noted that “the new ask liquidity coincides with the 21-day moving average and resistance at the .618 Fib.”
“Regardless of how high BTC bulls can push before W close/open, expect a death cross to have an adverse effect on short term upward momentum,” it commentedReferring to the above weekly chart event.
BTC/USD order book data (Binance). Source: Material Indicator/Twitter
Hodlers bounce back to health
The data shows that what whales love to do, the average hodler has yet to profit from.
Related: Bitcoin Already in Its ‘Next Bull Cycle’ – Pantera Capital
According to on-chain analytics firm Glassnode, long-term holders (LTH) have been busy accumulating new positions over the past month, in particular.
Its hodler net position change metric reached a three-month high on February 13, marking a return to hodling behavior not seen since the FTX debacle.
Bitcoin hodler net position change chart. Source: Glassnode
For those LTHs who choose to cash out some of their coins, the situation is improving as well. In a previous edition of its weekly newsletter “The Week On-Chain”, Glassnode described a “recovery” to profitability in 2023.
This refers to the expense output profit ratio (SOPR) metric, which measures the relative proportion of with-profit coins appearing in a transaction.
“Assessing the long-term holder cohort, we can observe a consistent regime of sustained losses since the collapse of LUNA,” it wrote.
“Despite this cohort continuing to post losses over the past 9 months, there are early signs of recovery with a possible rise in LTH-SOPR.”
Bitcoin LTH-SOPR chart (screenshot). Source: Glassnode
The views, opinions and opinions expressed here are those of the authors only and do not reflect or represent the views and opinions of Cointelegraph.
Source: cointelegraph.com
