Bitcoin's February Close Hinges on Key Economic Data and Impending Halving
Summary:
As February concludes, Bitcoin (BTC) might see its highs affected due to a loss in bullish momentum over recent weeks. The status quo is likely to be disrupted due to significant U.S. macroeconomic data and the monthly candle close. Analysts also anticipate volatility due to potential rate cuts by the Federal Reserve and the approaching Bitcoin halving. The month's end may lead to a possibly volatile trend in risk assets, with the odds of the Fed cutting rates slim as per CME Group’s FedWatch Tool. Despite a foreseeable decrease in Bitcoin mining difficulty, Bitcoin accumulation is outpacing the newly produced supply, with major gains in the 'Whale' and 'Super Whale' categories. Some analysts predict a substantial BTC downturn and a drop in BTC price to the $48,000 area.
As February nears its end, Bitcoin (BTC) price action reaches a juncture – will it maintain its highs? Despite remaining above $50,000, the leading cryptocurrency's bullish momentum has dwindled in the past fortnight. Some still foresee an upward surge, but the failure of buyer pressure to eclipse certain groups' selling tendencies indicates an approaching reality check. The upcoming days will potentially disrupt the present scenario, as crucial US macroeconomic statistics coincide with the monthly candle close, typically a source of volatility.
Macroeconomics paints an unstable picture, underscored by recent inflation surpassing predictions, causing doubts about the Federal Reserve's forthcoming actions and if risk assets will see an interest rate cut in the near term. For Bitcoin, this timing is significantly crucial against its internal behaviors, with the next halving inching closer day by day. Let's delve into these topics and more, examining imperative BTC price considerations for the approaching days.
Bitcoin's monthly close stays in the limelight as the cryptocurrency persists in moving within a limited scope post the weekly close, which was present throughout late February. With the latest close near $51,700, this levels off around $450 less than the previous, as confirmed by data from Cointelegraph Markets Pro and TradingView. As per Material Indicators, a trading resource, expect more volatility nearing the monthly close due to coincidences with US Economic Data. While the overall market sentiment veers towards sideways movement, certain digital currency commentators remain optimistic, one of them being social media expert Bitcoin Munger.
CoinGlass data indicates BTC/USD has remained over 20% up throughout February. The week's main macroeconomic events include US job and spending data, the latter being the Fed's chosen measure for inflation. Scheduled for Feb 29, both hold high potential for volatility, especially for risk assets. The Personal Consumption Expenditures (PCE) Index significantly influences the Fed's decisions on interest rates. According to CME Group’s FedWatch Tool, odds for a rate cut at the March Fed meeting remain slim, with March and May having just a 4% and 25% chance of showing decreased rates, respectively.
This intertwines with positive US stock expectations, with the S&P 500 nearing record highs. The week may hold another round of 'strong earnings' following Nvidia's performance last week. Meanwhile, amid cooling BTC price action, network statistics are reconsidering own growth this week. BTC.com predicts a decrease in Bitcoin mining difficulty, anticipating the next automated adjustment on Feb 29.
While the year 2024 has witnessed a clear distribution trend among miners, overall Bitcoin accumulation is successfully countering the newly produced supply. James Van Straten, research analyst at CryptoSlate attributes this increase in Bitcoin accumulation across all cohorts as over four times the listed issuance, with the biggest gains in the 'Whale' and 'Super Whale' categories.
Analyst Rekt Capital has stated that Bitcoin halvings usually offer investors a major discount opportunity during macro uptrends and has also hinted at $37,000 and $31,000 as substantial levels based on historical halving patterns. Other analysts, including Venturefounder, are also considering a significant BTC downturn owing to its correlation with the 50-day moving average (50DMA).
Short-term holders also suggest potential downside in the BTC price. A CryptoQuant market update indicates a warning of potential profit-taking, stating that BTC price may drop to the $48,000 area. Overall, every investment move is embedded with risk, and interested parties must conduct their due diligence while making a decision.
Published At
2/26/2024 10:30:00 AM
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