We are seeing Bitcoin split at the key $25,000 resistance along with early signs that things are not going well for the BTC price rally.
The final week of February begins with shaky sentiment as key areas of resistance fail to break through.
BTC/USD is below the $25,000 level after a typical low-volume fake-out over the weekend, and bulls are still in short supply.
The biggest cryptocurrency surged last week to hit a six-month high, looking like another 2023. recovery phase.
But the good times didn’t last. February’s progress is much slower than January’s 40 percent. rise is hard to come by. what about the rest of the month?
A significant monthly close is expected, as well as possible external price drivers – minutes from the US Federal Reserve Bank.
Meanwhile, Bitcoin network fundamentals are about to hit new all-time highs as miners are in full recovery mode.
Cointelegraph examines these and more in its BTC price forecast for the last week of February.
RSI’s “bearish divergence” triggers the alarm
After a mostly quiet start to the weekend following days of macro data reactions, Bitcoin woke up late Sunday to climb above $25,000.
But that didn’t last long, and as Cointelegraph reported, signs in the exchange’s order book indicated manipulative activity by many traders.
According to data from Cointelegraph Markets Pro and TradingView, the drop after the week’s close took BTC/USD below $24,000 before returning to levels similar to Saturday’s.
Traders had good reason to be vigilant.
“Without much focus on weekend PA..BTC generally saves meaningful moves for US equity market hours,” Crypto Chase wrote in its Twitter summary. .
Resource watchdog Material Indicators first noted order book activity and asked how long the phenomenon would last if bulls lacked the strength to make larger incursions.
Additional charts on the Binance order book confirmed that the key bid support, known as the “bid wall,” has fallen to the $23,460 level, leading to a downside for the spot price.
Fellow trader and analyst Matthew Hyland admitted that it’s “really hard to tell” if Bitcoin can go higher in the short term.
He said on the day that an area around $22,800 if a pullback followed by a big breakout “wouldn’t surprise me.”
More concerned about the strength of the takeoff was Venturefounder, a contributor to on-chain analytics platform CryptoQuant.
In a Twitter thread, he warned that external factors such as “macro weakness” could have a direct negative impact on crypto markets.
“Bitcoin Bears RSI Divergence Continues… Almost Reversed From 2021.” May-July Any macro weakness could see BTC drop from $19,000 to $19,000 quickly. I think it can go back up to $20,000,” said one commenter.
Venturefounder specified the Relative Strength Index (RSI) metric, which measures how overbought or oversold an asset is at a given price point. in 2021 The RSI rose against BTC’s price correction, reaching an all-time high of $69,000 in November of that year.
Focus on FOMC minutes and USD
It remains to be seen what form macro market “weakness” will take.
Next week, the US will release Personal Consumption Expenditure (PCE) data on private consumption, with potential macroeconomic drivers significantly lower than last week.
However, it was the Federal Open Market Committee (FOMC) in February. The publication of the minutes of the Fed meeting has the most crypto pundits.
The final rate hike was decided here, and Fed Chairman Jerome Powell was expected to include talk of a moratorium on rate hikes, if only in theory.
Crypto Chase said of the event: “Powell will release FOMC minutes on Wednesday detailing what a ‘pause’ in rate hikes will look like.
“I’ll start looking at the swing entrance in the middle of next week.
But not everyone is convinced that the FOMC minutes will go smoothly. Among them is financial market research source Capital Hungry, which warned this week that an “insidious hawkish correction” could be exposed.
“The Fed has taken the adjustment out of focus (rather than the active FOMC) and markets have already adjusted to the CPI correction and the January report.” PCE data shows rising inflation sentiment,” he said in one of his Twitter comments.
A recovery in inflationary trends would boost the US dollar, which spent the last week of macro trading erasing previous gains.
Matthew Dixon, founder and CEO of his cryptocurrency valuation platform Evai, described a scenario for the US dollar index (DXY) that is slower due to risk assets, including cryptocurrencies.