China Stocks Fall 8% in Hours – 5 Things to Know in Bitcoin This Week
Bitcoin (BTC) begins the first week of February by escaping a crash below $42,000.
BTC's price action remains in a tight range – January's gains are held at just 0.6%. What's next for the market?
Still battling around the low-to-mid-$40,000s, Bitcoin bulls don't yet have the real momentum needed to overcome the selling pressure and test the top of the range.
The road ahead looks bumpier: the halving is two and a half months away, and views on how prices will react both before and after will vary widely.
Some believe that a big change is coming and that Bitcoin will not only break through the area's resistance, but could also set a new all-time high before mid-April. Others call for “business as usual” – months after the halving, no significant price action.
In the background, macroeconomic concerns continue to rise, joined by fresh turmoil in China's stock markets this week.
With U.S. data surprising markets last week, there are questions about how the Federal Reserve's economic policy may evolve — especially regarding the timing of interest rate cuts, a key issue for crypto and risk assets.
Cointelegraph takes an in-depth look at these topics and more in our weekly list of what to look for when it comes to BTC/USD.
BTC price indicators warn about volatility in advance
At around $42,550 on Bitstamp, Bitcoin's latest weekly close was the second highest of 2024.
The following was typical behavior – he wanted to sell BTC/USD, at which point he made two retries of $42,200.
Bid liquidity has kept the current demand zone in Bitcoin's wide range above its 150-day high.
In his recent analysis of the spot market, the popular trader Skew described overnight price action as a barrier that protects against a prior decline.
Most of the $BTC Coinbase Spot anticipating lows in the previous tweet have now been filled.
key is taker flow on coinbase is now and if limit bids are support price else may disappear later $BTC spot cvds and delta most of today's taker bids and volume is driven by binance… pic.twitter.com/NNfTeyUpXU
— Skew Δ (@52kskew) February 5, 2024
It has fallen from a two-year high of more than $49,000 in mid-January and pointed to the mid-January reminder, plus $43,100, as a key level to overcome.
“So what I'm looking for today is if the price continues to hold the 1H/4H trend and buyers continue to move above the $43.1k/diagonal downtrend line,” explained part of another post on X.
The accompanying chart features both simple and exponential moving averages on the 4-hour chart, as well as a sloping resistance line.
Elsewhere, both the Relative Strength Index (RSI) and Bollinger Bands are starting to give signs that volatility may be returning.
In weekly timeframes, the RSI reset to lower levels as the spot price strengthened, analyst Matthew Hyland noted over the weekend.
Currently, the weekly RSI stands at 68.9 – just below the key 70 level, which often marks major price breakouts.
#BTC weekly RSI trending as price strengthens: pic.twitter.com/1bBBrsdSGd
— Matthew Hyland (@MatthewHyland_) February 4, 2024
Meanwhile, the three-day Bollinger Bands chart shows that a major squeeze is underway, with the bands tighter than anywhere since late October 2023, Hyland noted.
As Cointelegraph has reported several times, periods of tight bands suggest price expansion should follow — but it's not immediately clear in which direction.
#BTC 3-Day Bowling Bands Squeezing!
Stricter than pre-30k activity break in October: pic.twitter.com/80AkVtVqLm
— Matthew Hyland (@MatthewHyland_) February 4, 2024
Pre-Half All-Time High Bitcoin?
The central argument for Bitcoiners this year – every four years – is to halve the block grant.
Currently, due on April 18th, this will reduce the amount miners receive for each block mined by 50% to 3.125 BTC reward.
With just over two months to go, the impact of the halving on market sentiment is already being discussed and closely watched by commentators. As a result, their views on what will happen to BTC price action are very different.
In the year In a February 2 market update, trading group DecenTrader CEO and co-founder Filbfilb announced his resignation.
In his eyes, this half-year will play out like any other game, with no significant price increases months after the event. The expectation is that the market will “sell the news” on the halving – just like the US spot Bitcoin exchange-traded funds (ETFs) did in early January.
“So forecasting, it seems reasonable to expect some more Fomo towards the $49k level through early March and then some sustained consolidation before the news-of-the-event starts to sell off again,” PhilbFilb wrote.
“Bitcoin has a tendency to run forward with sell-the-news halvings, so keep that in mind. Following the halving, Bitcoin took 220 – 240 days to reach a new all-time high. I expect a similar outlook with Bitcoin making a trip to a new all-time high in mid-to-late Q4 2024.” This gives some time to check the investor's adjustment in between.
As reported by Cointelegraph, Q4 2024 is somewhat earlier than many major BTC price predictions when it comes to new all-time highs.
Filbfilb's forecast, however, provides a stark contrast to those with bullish voices challenging BTC price records before it halves or declines.
“Let's step back and ask ourselves how the next 30 to 60 days might play out. A lot of people are afraid of flooding, but I want to outline the bull situation,” wrote the famous investor Fred Krueger in a February 4th post on X.
Kruger based his hypothesis on the rapid changes in the new ETF nets, which have seen a steady decline in selling pressure.
“A total of 175,000 coins are worth 7.5 billion. This in 18 trading sessions,” he calculated.
“There are 20 to 40 trading sessions over the next 30 to 60 days. I estimate this will generate between $4 and $6 billion in new revenue. With a market cap of $850 billion, it's pretty easy to see that *market 50% or about 64K. Basically all the time.” It's high.”
Yes, it can be absolutely powerful. And I expect violence.
— Fred Krueger (@dotkrueger) February 4, 2024
James Van Straet, a research and data analyst at crypto insights firm CryptoSlate, drew comparisons to recent gains in meta market capitalization, with Krueger responding that he “expects an attack” regarding Bitcoin's own growth.
Spot Bitcoin ETFs collect BTC
Those ETF flows make fascinating reading on their own.
Globally, the total supply of BTC in ETF products now exceeds 3%, with US spot offerings by asset managers BlackRock and Fidelity accounting for three-quarters of newly minted BTC.
This does not include Greyscale Bitcoin Trust (GBTC), an ETF that continues to offer high spending as its newly converted clients spend.
The voice competition is not even close today. $GBTC is troubling peers over $100 million. Another day with a total dollar amount under $1 billion though pic.twitter.com/xPCvIZPM3a
— James Seyff (@JSeyff) February 2, 2024
According to Cointelegraph ETF Investment Advisor Nate Geraci, both BlackRock and Fidelity made the top ten ETFs by revenue flow last month despite only launching offerings on January 11th.
“I never thought I'd see the day,” he wrote in part of X's comments.
Cointelegraph previously reported on the “wait and see” game being played by market observers when it comes to the EFF.
They believe that the gray pressure is decreasing, and eventually, the net flow should stop.
“Once we start seeing green on this chart, what narrative should you sell other than an unknown event,” financial analyst Tedtalksmacro argued in a recent YouTube video about GBTC's exit.
It has promised to enter China as stocks have stagnated.
Beyond Bitcoin, the so-called week of relatively quiet macroeconomic data may already surprise.
At the moment, China is leading the volatility as stocks hit five-year lows and the CSI 1000 index fell 8%.
The drama follows injections of liquidity from Beijing and the bankruptcy of Evergrande, China's second largest property giant.
In a February 4 statement cited by Reuters, the China Securities Regulatory Commission, or China Securities Regulatory Commission, C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C. R.C.C.C.C.R.C.C.C.R.C.C.C.R.C. In a statement, the firm said it would “reinforce expectations and confidence and strongly guard against abnormal market fluctuations.”
The CSI 1000's year-to-date losses have stalled at about 27% at the time of writing.
“China's equity markets seem to be joining their collapsing real estate market,” trading source Kobeisi wrote in part in response to the letter.
“China's HY real estate index is down more than 85 percent from 2 years ago. The question becomes: Is this crisis contained?
BREAKING: China's CSI 1000 index is now down 8% and is down 30% in the first month of 2024.
Over the past 10 days, China's CSI 1000 index has fallen 21 percent.
Minutes ago, the Chinese government again promised to stabilize the market.
This comes after countless stimuli… pic.twitter.com/qd4NQEfxOd
— Kobeissi Letter (@KobeissiLetter) February 5, 2024
This set the stage for the much-anticipated Wall Street open as they speculated on how the US would conduct its quantitative tightening (QT) pivot.
As Cointelegraph reports, bets on a lower Fed rate at the March meeting have eased after last week's non-farm payrolls data beat expectations.
Adds unemployment numbers to the mix this week.
At the same time, concerns about the health of the regional banking sector continue. Regarding the impact on Bitcoin and crypto, Arthur Hayes, the former CEO of the BitMEX exchange, sees the first statement in March, followed by a spectacular BTC price recovery.
Its minimum BTC price is set at $30,000.
Whales balance in “big” movements
Behind the scenes and despite the BTC price landscape, whales are being seen preparing for a change.
Related: Bitcoin Price Finds Stable Coin As Supply Jumps 3.5% In One Month
In a recent study, Sentiment found major changes in the composition of whales over the past week.
The number of wallets holding between 1,000 BTC and 10,000 BTC is now at its highest since November 2022, while 100-1,000 BTC wallets are the lowest since then. Numbers stood at 1,958 and 13,735 wallets respectively.
“Bitcoin will range from 41 thousand to 44 thousand dollars, but this week the wallets are getting bigger,” he summarized.
In the year November 2022 was a watershed moment as the collapse of the FTX exchange sent crypto markets soaring, culminating in Bitcoin dropping to $15,600 a month later.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
