Bitcoin (BTC) heading into the last week of February down but showing signs of strength with key support level in place.
After a few days of jitters in the macro and crypto markets alike, BTC/USD has fallen below $40,000, but there are already signs that a comeback may be what starts the week in the right direction.
The situation is far from easy – concerns about inflation, US monetary policy, and geopolitical tensions are all factors, and with them, the potential for stocks to continue to suffer.
More signals from the US Federal Reserve will be hot property in the short term, as March is expected when the first major rate hike is announced and delivered.
Could all of this be a storm in the teacup for bitcoin, which, technically, is stronger than ever?
Cointelegraph presents five factors that could influence price action in the coming days as storm clouds remain over the global economy.
Stocks lead a gloomy overall week
The main story for bitcoin traders this week is coming from abroad – the post-COVID economic outlook and concerns about relations with Russia.
The first comes in the form of how the Fed will respond to rising inflation and, more specifically, whether its rate increases will start in March as expected.
These increases are bad news for booming stocks, which have seen two years of runaway gains thanks to the Fed’s giant liquidity program to counter another COVID-era demon: shutdowns and unprecedented controls on economic activity.
With “easy money” that will soon start to dry up, something of a reality check can be within everyone’s reach.
In terms of raising interest rates, many people are soon risking a recession – a topic already under consideration discussion As a “necessary evil” for other countries – a light touch, on the contrary, could fail to bring down the highest inflation in 40 years.
Besides, the situation with Russia and its alleged plans for Ukraine raises even more concern about stocks.
Conversely, commodities such as oil have benefited from fears of outright war, and these have so far been misplaced as diplomacy falters this week.
In general, the short-term view is characterized by a lot of uncertainty, while it is optimistic stay to come back for both risky assets such as cryptocurrencies and traditional stocks by the end of 2022.
However, there is no hiding the numbers.
“Global stocks lost another $1.3 trillion in stock market cap this week due to escalating Russia/Ukraine risks and the possibility of continued Fed rate hikes this year,” Summarization Sunday.
The latter is expected to halt growth and lead to a recession by 2023 in the first half of the year in the United States. Shares are now worth $114 trillion, equivalent to 134 percent of global GDP.”
Wall Street trading begins on Tuesday of this week due to a public holiday in the United States.
BTC Price Targets CME Futures Gap
However, it has been tough for the average daily Bitcoin trader this month.
February offered only about two weeks of easy gains, with the overall effects ending the party the week before.
Since then, BTC/USD has lost the $40,000 support and is threatening a complete reversal of the recently achieved ground this month.
In the event, however, $38000-level Previously flagged as necessary to hold For bulls – remained intact.
The weekly close, while at a multi-week low, was accompanied by a fresh breakout on the 4-hour chart’s Relative Strength Index (RSI), a classic signal that precedes a short-term price rebound.
According to Altcoin, Bitcoin has since moved up a bit, holding around $39,200 at the time of writing.
# bitcoin 4 hours RSI broke out with the close
Waiting for MACD confirmation: pic.twitter.com/J7rPoYISlU
– Matthew Hyland (@MatthewHyland_) February 21 2022
Seasoned traders tend to ignore the weekends on BTC/USD due to the lack of volume which exacerbates any particular move. As such, a drop to $38,000 in and of itself might be a bit of an exaggeration in market sentiment.
What’s more, the bounce has clear targets – $40,000 with support/resistance flipped, but also Friday’s closing price of CME stock exchange futures at $39,860, which is higher than the main part of Saturday’s decline.
Livecoin February 20 2022
Bitcoin usually fills these “gaps” in the CME chart, often within days or even hours once the new week’s trading begins.
Who buys while you sell?
Amid disbelief that some are choosing to sell their bitcoin now after holding out for months on the downside, data shows that the big players are smelling a bargain.
There are many examples, with on-chain monitoring resource BitInfoCharts Show The “up only” trend for one entity in particular.
Monday alone saw his stock increase by 150 BTC, and he’s not alone – others have accumulated coins during the local drop this weekend.
When you panic sell # bitcoinThis guy buys it all.
– C15Capital ⚡️ (@Capital15C) February 20 2022
However, owners of small sizes are not necessarily weak hands. The latest numbers from cross-chain analytics company Glassnode Displays The number of wallets holding at least 0.01 BTC ($393) has now reached an all-time high of 9.4 million.
The last peak was actually in late January before Bitcoin’s recent surge to $45,500.
As Cointelegraph reported over the weekend, a Bitcoin show It is becoming increasingly illiquid in generalwith the ratio remaining dormant for at least one year, approaching record levels.
Ruined days of coins hints about a possible bottom
Those looking for signs that $38,000 was local ground really don’t need to look far.
Thanks to an analysis of the on-chain data, it can now be seen that long-term Bitcoin investors repeated their behavior over the weekend, which accompanied BTC price troughs in July 2021 and September 2021.
The dataset, this time from CryptoQuant, Judged Coin Destroyed Days (CDD) – The cumulative number of days since the last movement of each bitcoin on a given day.
The weekend saw a large number of “old” coins on the move, thus “destroying” the largest number of idle days since the July 2021 low under $30,000.
In terms of raw numbers, the foregoing giants were the highest since July 2019 – although the event at the time was a local top rather than a bottom.
This phenomenon was noted by the IT contributor to CryptoQuant, which also highlighted another on-chain metric judging hackers pointing to a price drop.
# bitcoin I found something really interesting. Before prices fell, some long-term HODLers made a move BTC dollars Because LTH-SOPR is up twice today. Each time after this event the price drops. Inquiries into the giants also showed a significant rise. What is CDD and LTH-SOPR – read the tweets below. pic.twitter.com/HaPLgbkUjh
– Information Technology (IT_Tech_PL) February 20 2022
Reaction, the popular Twitter account PlanC I suggested That the two could be a leading indicator of bitcoin in the future.
‘Extreme fear’ is back
With all the factors influencing, it can be said that it is not surprising that participants in the cryptocurrency market do not quite know how they feel about the prospects.
The Cryptographic Fear and Greed IndexA popular sentiment gauge that attempts to quantify market sentiment agrees.
Bouncing around under $40,000, the general feeling was Flirting with a return to the “extreme fear” zoneonly to re-enter it even as the spot bitcoin price moves higher.
As of Monday, the index measures 25/100 – the “highest” possible reading of severe fear, but more than 50% lower than the “neutral” level seen just four days ago.
Fear and greed saw the floors much deeper this year, and the final reversal had entered January when Approaching historic lows of 9/100.