Bitcoin Hits Two-Year High as Halving Approaches Amid Global Economic Turbulence
Summary:
Bitcoin began the final week of February with a record-setting weekly close of over $52,000. While predictions vary, majority opinion indicates more upside as the Bitcoin halving event approaches. Despite this short-term optimism, more distant forecasts vary, with some suggesting a possible peak in 2024 before a 'secular bear market' begins. Regarding other factors affecting the Bitcoin market, the U.S and global macroeconomic situation contributes further instability. Open interest in Bitcoin futures has reached a new all-time high, and investor sentiment trends towards 'greed', indicating a state of market euphoria.
Bitcoin (BTC) is kicking off the final week of February on a high, exceeding $52,000, setting a two-year record for a weekly close. There's little indication that the upward momentum is about to reverse, as more and more market participants expect the cryptocurrency to continue towards all-time highs. Market experts and traders are divided over when the next significant move will happen, but a majority anticipates further increases.
Bitcoin has weathered the storm from major events this year, and as the reduction in Bitcoin block rewards (the halving) is only two months away, many are speculating on a price rally. But the forecast for the more distant future is vaguer; some analyses suggest Bitcoin may peak in 2024 before a "secular bear market" begins, while the overall impact of the halving on Bitcoin's price is also under scrutiny.
Add the current macroeconomic and geopolitical instability in the U.S. and beyond, and it's clear that potential catalysts for market volatility aren't scarce. Cointelegraph revisits the significant factors affecting Bitcoin's price and projects their potential influence in the coming days and weeks.
Bitcoin started the weekend with a triumphant weekly close on Feb. 18, reaching its highest point since November 2021 at approximately $52,100, according to data from Cointelegraph Markets Pro and TradingView. This takes Bitcoin close to its peak price of $69,000.
Predictions varied on how the week would end, with different support levels in play in case of a sudden market reversal. Eventually, there was little turbulence, and the price of Bitcoin held above $52,000 as the trading day began in Asia.
Overall, it seems Bitcoin is likely to see another price surge before a more significant test of its recent gains. However, the near-term price predictions remain evasive for many spot markets, which have focused on $52,000 and its associated resistance over the past week.
Several commentators have agreed with this potential trajectory, including Venturefounder, a contributor to CryptoQuant. However, the basis for this consensus lies in the behavior of the relative strength index (RSI).
Although some argue that recent price developments challenge the standard four-year cycle of Bitcoin, others insist that it's business as usual and that a cycle top should be expected months after the halving. One prominent trader and analyst, Credible Crypto, posited last year that a top might be expected in late 2024, followed by the "first major secular Bitcoin bear market." Nevertheless, he acknowledges there's still room for gains before the April halving.
As for macroeconomic factors, the recent U.S inflation data caused concerns among analysts, as both the Consumer Price Index (CPI) and Producer Price Index (PPI) rose more than expected in January. Markets, which had previously felt assured that the Federal Reserve would revise its interest rate policy by March, are now reassessing that likelihood.
Open interest (OI) in Bitcoin futures has reached a new all-time high, with $6.8 billion invested in CME Group's Bitcoin futures. Similar highs are noted elsewhere, with total exchange OI hitting $22.8 billion on Feb. 19, the highest since Bitcoin reached $69,000.
Risk-reward ratio notwithstanding, Bitcoin funding rates and leverage remain at manageable levels, suggesting a lack of undue over-optimism among traders. However, cross-crypto sentiment indicates increasing euphoria among average investors, with high levels of "greed" indicated on the Crypto Fear & Greed Index.
This news piece does not offer investment advice or recommendations. Like any investment or trade, there are associated risks, and it's advised for readers to do their own research before making any decisions.
Published At
2/19/2024 11:14:57 AM
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