Bitcoin (BTC) begins a new week just below $22,000 as the bulls fail to make up the ground lost in February.
After some modest volatility towards the weekly close, BTC/USD is still near three-week lows as a new status quo enters with $22,000 as resistance.
The largest cryptocurrency is at the start of an important macroeconomic data week, however, with plenty of opportunity for volatility to return.
These come primarily 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, with analysts watching the response from the crypto markets, along with the US dollar.
Within Bitcoin circles, whales are seizing the opportunity to buy at current levels, data shows, in a ray of hope for those hoping Bitcoin’s price recovery in 2023 can continue.
At the same time, a formidable new chart event is causing some discomfort: can Bitcoin avoid significant downside as confirmed by its first weekly “death cross”?
Cointelegraph takes a look at these issues and more in the weekly roundup of potential Bitcoin market triggers for the coming week.
Bitcoin Confirms Weekly Chart “Breakdown”
At around $21,800, the latest weekly close had few surprises in store for those on both sides of Bitcoin trading, data from Cointelegraph Markets Pro and TradingView shows
Its lowest level since mid-January, the event sealed a long-awaited pullback for BTC/USD after it spent January experiencing a virtually unchecked uptrend.
Now, the focus is on holding key support levels, mainly in the form of long-term trend lines claimed as support during the run-up to January.
In a new update to Twitter followers on February 13, popular Crypto trader Tony confirmed that $21,400 is where things can get interesting.
“From there, we can really assess whether the bulls have the ability to save the bears or get them to slaughter,” part of the comment read.
Zooming in, fellow account Daan Crypto Trades noted that BTC/USD was sitting between the 200 and 400 exponential moving average (EMA) on 4-hour time frames.
“It looks like we’ll open up with a small gap below us as we speak. Overall, it was just a busy weekend for BTC with a few side changes. Waiting for the CPI. I probably won’t do many actions before then. summarized.
Meanwhile, a more formidable line in the sand comes in the form of the 200-day MA. While it is still at $20,000, the level now constitutes an important level for the bulls to maintain control of.
Sunday night reflections
Previously shared on the BTC Report but key points:
– weekly OB
– Jan high taken
– HTF FVG Drawing Price
– 200MA aligned with prior consolidation
– Let’s see how market sentiment opens
– Plans for both but favoring the pull backHappy Sunday pic.twitter.com/AkTqqarX8a
—BC Richfield (@BC_Richfield) February 12, 2023
On weekly time frames, the picture is no better, trader and analyst Rekt Capital warns. Marking $21,839 as the point of interest, she said that a weekly close below this would “confirm the breakdown” in BTC/USD, a move that finally came to fruition.
That same level had acted as resistance several times since the middle of last year.
The impression of the “most important” CPI arrives
The macro outlook will be dominated by one data point in particular this week with the release of the US Consumer Price Index on February 14 (CPI) for January.
Bets are on inflation to continue to fall in a move that could still boost risky assets despite a dip in early February.
The picture is complicated by a reorganization how the CPI is calculated, but analysts question its importance given the general downward trend in inflation.
Regardless of that, however, this month’s print is being closely watched far beyond crypto circles.
“Tuesday’s CPI report is the most important report to date. After a strong January jobs report and an upwardly ‘revised’ December CPI, uncertainty is everywhere”, capital markets bulletin, The Kobeissi Letter, said Twitter followers on the weekend.
“Both bulls and bears need the report to go their way. Whichever side is right will drive the market for the next month.”
Meanwhile, popular trader and analyst Myles G underlined the consequences for cryptocurrencies should the CPI turn out higher than expected, warning that this would “dump the market big time.”
“Almost every CPI release of the last 6 months has been an instant dump, then an immediate rally after traders digested the data,” fellow trader Satoshi Flipper noted on the relationship between the CPI and market volatility.
“This time it will be different?”
The extent to which the CPI plays a role in policy adjustments at the Federal Reserve is also a topic of debate today, after Chairman Jerome Powell He suggested that another metric may be the “most important” tool for monitoring inflation at the end of last year.
However, with the upcoming interest rate decision due in the third week of March, policy makers will have February CPI numbers on hand in case January turns out to be an unexpected anomaly.
First weekly “cross of death” raises concern
Bitcoin is caught between two “crosses” this month in a curious scenario, which is dividing opinion as to what it means.
As Cointelegraph reported, a “golden cross” on the daily time frames is paired with a “death cross” on the weekly chart.
The latter is the first of its kind for BTC/USD, but death crosses on other time frames have often preceded significant price declines.
It remains to be seen if the daily gold cross will repeat historical patterns and boost the market, but in the meantime, another completely new cross is taking place.
As Caleb Franzen, Senior Market Analyst at Cubic Analytics, pointed out, Bitcoin’s 1-year EMA is about to dip below its 3-year counterpart for the first time.
“This crossover has never happened before, highlighting the severity of the BTC bear market,” he said. wrote in part of the Twitter comment on February 11.
In fact, the event happened in mid-December, but the 1-year EMA has continued to fall ever since, dipping further below the 3-year and 2-year EMAs.
in accompanying analysis, Franzen argued that the cross could reframe the behavior of the Bitcoin bear market. This time, the depression could be harder and longer than before.
“While many Bitcoin investors have noted that BTC typically bottoms out approximately ~400 days after the bull market peak, this chart suggests that this time is different,” he wrote.
“Considering that we have never seen this signal before now, the implication is that the 1-year trend could remain below the 3-year trend for even longer.”
He went on to say that the 2-year EMA may end up crossing below the 3-year EMA as well, which would also constitute a one-of-a-kind event.
“Personally, I wouldn’t be surprised if that happens within the next 6 months as a result of further sideways action or consolidation to the downside,” the analysis forecast.
Whales stay engaged
When it comes to interest in Bitcoin at current prices, the whales may have already broken their silence.
In data released on Feb. 13, research firm Santiment noted that the whales had increased transaction activity as BTC/USD fell to $21,600 around the weekly close.
“Bitcoin dipped to $21.6k on Sunday, and whale addresses responded by transacting at their highest rate in 3 months,” he said. summarized.
Community Contributor Santiment sanr_king called the whale moves “significantly”.
Meanwhile, a snapshot of order book activity on Binance showed the presence of a major whale entity on Feb. 12, along with a fresh wall of sell at just over $22,000 at the weekly close.
On-chain analytics resource Material Indicators, which uploaded the data, noted that it “shows new demand for liquidity coincides with resistance at the 21-day moving average and .618 Fibonacci.”
“Regardless of how high BTC bulls may push before the W closes/opens, the Death Cross is expected to have an adverse impact on short-term bullish momentum.” commentedreferring to the appearance of the aforementioned weekly chart.
Hodlers recover health
Regardless of what the whales choose to do, the average hodler has yet to turn a profit, the data shows.
Related: Bitcoin is already in its ‘next bull market cycle’ — Pantera Capital
According to on-chain analytics firm Glassnode, long-term (LTH) holders have been busy accumulating new positions over the past month, in particular.
Its Hodler Net Position Change metric hit three-month highs on Feb. 13, marking a return to hodling behavior not seen since the FTX debacle.
For those LTH who choose to withdraw some of their coins, conditions are improving as well. In the previous issue of his weekly newsletter, “the week in chain”, Glassnode described profitability as “recovering” in 2023.
He referenced the Spent Exit Profit Ratio (SOPR) metric, which measures the relative proportion of winning coins that appear in transactions.
“In assessing the long-term holder cohort, we can observe a persistent regime of sustained losses since the LUNA collapse,” he wrote.
“Despite this cohort continuing to lose over the past 9 months, there are initial signs of a recovery, with a possible uptrend in LTH-SOPR beginning to form.”
The views, thoughts and opinions expressed here are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
