Bitcoin (BTC) is starting the week with some volatility and fresh all-time highs as the price continues to be unpredictable. The cryptocurrency had its highest-ever weekly close, but it’s facing resistance in breaking higher. The battle between price discovery and selling pressure at key psychological levels is ongoing, while the spot exchange-traded funds (ETFs) continue to exert pressure on the price. This week will determine which side gains the upper hand.
ETF buying has had a significant impact on the market, with even long-time bulls reconsidering their price predictions for BTC/USD in the long term. Some now see $1 million as a conservative estimate. However, others warn that the current bull run may lead to a price top sooner than expected.
In addition to the market dynamics, the release of United States macro data this week will set the tone for the Federal Reserve’s decision on interest rates. Bitcoin miners are also taking advantage of the current price by locking in profits before the block subsidy halving in April.
Bitcoin experienced high volatility leading up to the weekly close on March 10, with the highest price reaching $69,000. However, the price quickly dropped to $67,120 shortly after. There was a relief bounce, but Bitcoin reached new all-time highs during the Asia trading session on March 11. Traders are closely watching the $63,500 to $65,500 price range as a key level to maintain the current uptrend.
On-chain analytics revealed movement of coins that had been dormant for up to a decade, indicating increased activity before the weekly close. This suggests that long-term holders may be taking advantage of the high prices.
The upcoming release of the Consumer Price Index (CPI) for February on March 12 will have an impact on short-term trading across various assets, including Bitcoin. The market is eager to see interest rate cuts, but Fed officials are trying to manage expectations. The CPI figures and other data points will be crucial in determining the Fed’s decision at its upcoming meeting.
Bitcoin market observers are waiting for the spot ETFs to resume buying this week. The ETFs have been instrumental in driving up the price, and many believe this trend will continue. Major institutions are showing optimism and are expected to add Bitcoin exposure.
Miners, despite facing a halving that will reduce their rewards, have been selling significantly at the current highs. This has surprised many, but it could be due to the recent price surge. The Puell Multiple, which measures the value of coin issuance against its yearly moving average, is at historically high levels. However, it is not as high as previous cycle peaks.
Despite the price discovery and volatility, long-term Bitcoin holders are holding onto their coins. The transfer volumes among long-term holders have not matched those seen in 2021, and the net unrealized profit/loss (NUPL) for these holders is not at levels indicative of a blow-off top.
It’s important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any decisions.