Bitcoin Approaches $50K Amid Rising Interest & Market Watchfulness for New Highs
Summary:
Bitcoin starts the new week with its highest weekly close since December 2021, as the critical $50,000 resistance level edges closer. With eyes on major U.S. economic data this week and the forthcoming halving event, market observers, investors, and analysts are watchful. Meanwhile, the encouraging performance of the U.S. spot Bitcoin exchange-traded funds bolsters hopes of new record highs. Despite a 13.5% week-on-week gain, opinions differ on the potential for surpassing the $50,000 mark. Attention is also drawn to a local top warning resulting from Bitcoin's profitability and the 95% profitability mark for all supply, historically signifying market tops. Finally, data from Google Trends suggests mainstream retail interest in Bitcoin remains significantly lower than its peak, indicating that a retail surge might only occur once Bitcoin reaches a new all-time high.
Bitcoin (BTC), starting the new week on a high note, closed at its highest weekly valuation since December 2021. As the digital currency continues its strength, the $50,000 resistance is now approaching. Observers are keeping a close watch, given the powerful 13% green weekly candle and the approaching halving in just two months. Proponents suggest that Bitcoin's sentiment is being drawn towards the halving like a magnet with varied theories discussing how high it could crest before the event. Several obstacles remain to be overcome, nonetheless. With a pile of key economic data awaited from the United States this week and a persisting uncertainty around financial policy, investors and market analyzers are watching closely. The Federal Reserve is expected to monitor January's Producer Price Index (PPI) and Consumer Price Index (CPI) prints closely as the market braces for interest rate cuts. Meanwhile, the successful run of spot Bitcoin exchange-traded funds (ETFs) in the U.S. fuels excitement amidst observers who suggest that a steady institutional offer could fuel new record-breaking levels in the coming months. Cointelegraph breaks these topics down along with other key issues to watch for pertaining to BTC pricing.
Bitcoin is facing the daunting $50,000 mark after posting its highest weekly close since mid-December 2021 at approximately $48,315, as indicated by data from Cointelegraph Markets Pro and TradingView. According to CoinGlass, Bitcoin's last week ended with gains of approximately 13.5%, marking the best performance of 2024 thus far. The challenge now is to determine the subsequent move; opinions vary widely with some confident of surmounting the crucial $50,000 resistance and others believing it will not fall that easily. One such sceptic is Michaël van de Poppe, founder and CEO of trading firm MNTrading, who believes Bitcoin's performance in the next 1-2 weeks around the $50,000 range will be telling.
Furthermore, information about Bitcoin's profitability brings attention to a warning about a local peak. Considering the portions of the BTC supply currently being held at a profit, James Van Straten, research and data analyst at crypto insights firm CryptoSlate, has noted warning signs. He points out that Bitcoin is nearing the 95% profitability mark for all supply which has historically been a sign of market tops.
Investors are also keeping a watchful eye over the U.S. macroeconomic data releasing this week, led by the PPI and CPI prints for January. These figures will offer crucial insights into the battle against inflation and the effect that it's likely to have over the Federal Reserve's policy concerning risk assets.
In light of the existing Bitcoin bull market, a significant jump for network fundamentals due this week isn't entirely surprising. Bitcoin mining difficulty is anticipated to rise by an estimated 6% at its next automatic revision on February 15, according to BTC.com data. Maintaining these growth rates will push the difficulty to an all-time high, exceeding 80 trillion for the first time.
Crypto Fear & Greed Index points out that crypto investor sentiment is showing similar greed levels as seen during the 2021 peak. Interestingly, research firm Santiment observed a pattern, noting that social media users' excitement increases with BTC price hikes, but then quickly switch to altcoins, encountering more price volatility.
Fresh data from Google Trends indicates that despite Bitcoin currently trading just $20,000 short of the 2021 record, mainstream retail interest is significantly lower than its peak. This suggests that retail surge may only start once BTC hits the all-time high again.
Published At
2/12/2024 1:10:33 PM
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