Bitcoin (BTC) begins the final week of February with a fresh two-year record for the weekly close, surpassing $52,000. The price of BTC continues to show strength, with bulls driving the market closer to all-time highs. Traders and market observers are divided on the timing, but there is an increasing consensus that further upside is likely. Bitcoin has successfully weathered turbulence from major events this year and with the block subsidy halving just two months away, there is anticipation of a classic rally. However, the future outlook is less predictable, with analysis warning of a potential top later in 2024 followed by a “secular” bear market. The impact of the halving on price action is also under scrutiny. Additionally, the macroeconomic and geopolitical situation in the United States and beyond adds to the volatility of the crypto market. This article provides an overview of the major factors influencing BTC price action and how they may play out in the coming days leading up to the February monthly close.
BTC closed the week on February 18 at around $52,100, its highest weekly close since November 2021. This brings the market close to its previous peak of $69,000. Various support levels were monitored in case of a market reversal, but little volatility occurred, and $52,000 held during the Asia trading session. Traders anticipate another leg up before a potential correction. The market has been relatively stable, with $52,000 acting as a significant resistance level. Analysts predict a target of $58,000 based on the relative strength index (RSI) behavior. Despite no daily spot BTC ETF buys over the weekend, Bitcoin has performed well. The debate around the halving and its impact on price is intensifying as it approaches. Some argue that recent price performance, coupled with institutional access through U.S. spot ETFs, challenges the traditional Bitcoin market cycles. Others believe that the current cycles are “business as usual” and expect a cycle top to occur months after the halving. There is an expectation of further upside before the halving in April, as seen in previous cycles.
Global liquidity conditions are favorable for cryptocurrencies, despite caution among macro analysts due to higher-than-expected U.S. inflation data. The Federal Reserve’s potential move to tighten monetary policy dampens the tone for risk assets. However, the S&P 500 continues to hit all-time highs, indicating a divergence between market performance and macro reality. In contrast, global liquidity conditions are better than ever, which could serve as a catalyst for cryptocurrencies. The upcoming release of jobless claims, the Fed’s January meeting minutes, and the S&P Purchasing Managers’ Index (PMI) will further impact market sentiment. Open interest in Bitcoin futures has reached a 26-month record, indicating increased market participation and interest. However, caution is advised as the risk of a snap downside move exists. Despite this, both open interest and sentiment levels remain relatively manageable, suggesting a lack of “irrational exuberance” among traders. The Crypto Fear and Greed Index shows increasing signs of euphoria among average investors, reaching the highest levels of greed since the 2021 Bitcoin all-time high. However, extreme bullishness often precedes corrections, as seen in 2021.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before making any decisions.