Bitcoin starts a new week at just under $22,000 as the bulls fail to regain the ground they lost in February. cryptocoin.comWe have compiled for you the developments that will affect Bitcoin and altcoins this week.
Bitcoin confirms weekly chart ‘dump’
The recent weekly close at around $21,800 has taken both sides of the Bitcoin trade by surprise, according to the data. The event, which was the lowest since mid-January, sealed a long-awaited pullback for BTC/USD after spending the month of a practically unchecked rise.
Attention is now focused on key support levels, mostly in the form of long-term trend lines that were reclaimed as support during the January spike. Analyst Crypto Tony confirmed in a new update for his Twitter followers on Feb. 13 that $21,400 is where things could get interesting. “From there, we can really assess whether the bulls are inside to save the bears or lead them to slaughter,” he said in part of the comment.
Other analyst Daan Crypto Trades noted that the BTC/USD pair sits between the 200-period and 400-period exponential moving average (EMA) on 4-hour timeframes. He also said, “It seems like we’re going to open up with a little space underneath us as we speak. Overall a volatile weekend for BTC and some altcoins popping up. The CPI is expected and probably won’t trade much before that,” he summarized.
Trader and analyst Rekt Capital warns that the chart is not getting better on weekly timeframes. Marking $21,839 as his point of interest, he said a one-week close below this would ‘confirm the crash’ in BTC/USD, and that move has finally happened. The same level had acted as resistance several times since the middle of last year.
The “most important” CPI edition has arrived
The macro landscape will be dominated by one data point in particular this week, with the release of the US Consumer Price Index (CPI) for January on February 14. The stakes are clear that inflation will continue to decline despite the drop in early February, a move that could still support risky assets.
The picture is complicated by a reorganization of how the CPI is calculated, but analysts debate its significance in the face of the overall downward trend in inflation. But regardless of that, this month’s edition is being watched closely far beyond crypto circles.
Meanwhile, popular trader and analyst Myles G highlighted the implications for crypto if the CPI comes in higher than expected, warning that it will ‘drastically depress the market’.
The extent to which the CPI plays a role in policy adjustments in the Federal Reserve is also currently a matter of debate, after Fed chair Jerome Powell suggested late last year that it could be another ‘most important’ metric for monitoring inflation. With the next decision on interest rates being made in the third week of March, policymakers will have their hands on the February CPI figures in case of an unexpected abnormality in January.
Weekly ‘death cross’ causes concern for first time
Bitcoin has been caught between two ‘intersections’ in an interesting scenario this month, which is causing controversy over its importance. The ‘golden cross’ on the daily timeframes merges with the ‘death cross’ on the weekly chart. The latter is the first of its kind for BTC/USD, but death crosses on other timeframes often precede significant price drops.
It is not yet clear whether the daily golden cross will repeat the historical patterns and keep the market alive, but meanwhile, another brand new cross is taking place. As market analyst Caleb Franzen at Cubic Analytics noted, Bitcoin’s 1-year exponential moving average (EMA) is about to drop below its 3-year counterpart for the first time.
“This crossover, which highlights the seriousness of the BTC bear market, has never happened before,” he wrote in a February 11 Twitter commentary. The event actually occurred in mid-December, but the 1-year EMA has continued to drop since then, falling further below the 3-year and 2-year EMAs.
He added that the 2-year EMA may also fall below the 3-year EMA, which will be the first of its kind. “Personally, I wouldn’t be surprised if this happens as a result of further sideways movement or downward consolidation over the next 6 months,” the analysis forecast said.
Whales may have broken the silence
When it comes to interest in Bitcoin at current prices, the whales may already have broken the silence. In data released on Feb. 13, research firm Santiment noted that whales accelerated their trading activity as the BTC/USD pair dropped to $21,600 around the weekly close.
“Bitcoin dropped to $21.6k on Sunday and whale addresses responded by trading at a 3-month high,” the platform summed up. Sanr_king, a contributor to the Santiment community, described the whale movements as ‘important’.
Meanwhile, a snapshot of orderbook activity on Binance showed the presence of a large whale presence on Feb. 12, as well as a new sell wall at just over $22,000 at the weekly close. The on-chain analytics resource Material Indicators, which uploaded the data, said it “shows that new selling liquidity is coinciding with resistance at the 21-Day Moving Average and .618 Fib.”
Referring to the aforementioned weekly chart formation, he commented that ‘to expect the Death Cross to have a negative impact on the short-term upside momentum, regardless of how high BTC bulls can go before the W close/open’.
Crypto owners recovered
According to the data, the average hunter has yet to make a profit, no matter what the whales choose to do. Long-term holders (LTHs) have been particularly busy accumulating new positions last month, according to on-chain analytics firm Glassnode. The Hodler Net Position Change metric hit a three-month high on February 13, marking a return to hodling behavior not seen since the FTX debacle.
Conditions are also improving for LTHs who choose to cash out some of their cryptocurrencies. Glassnode announced in the previous issue of its weekly newsletter ‘The Week On-Chain’ that profitability was ‘recovered’ in 2023.
He referred to the Spent Output Profit Ratio (SOPR) metric, which measures the relative rate of for-profit cryptocurrencies appearing in transactions. By assessing the ‘Long-Term Holder cohort’, Glassnode wrote, we can observe a regime of persistent sustained losses since the collapse of the LUNA.
Expected financial developments in the USA
Macroeconomic news is important for cryptocurrency markets. However, the financial developments that will take place this week have been determined.
- Tuesday, February 14 (16.30 CEST)
- US Consumer Price Index (CPI) Disclosure, Expectations: 6.2% Previous Rate: 6.5%
- Wednesday, February 15 (17.00 CET)
- Statements by ECB President Lagarde
- Thursday, February 16 (16.30 CEST)
- Statement on U.S. Unemployment Claims, Expectations: 200k Previously: 196k
- US Producer Price Index (PPI) Disclosure, Expectations: 0.4% Previous Ratio: -0.5%
