Open Interest Echoes $69K BTC Price — 5 Things to Know in Bitcoin This Week
Bitcoin (BTC) begins the last full week of February above $52,000 – a new two-year record for a weekly close.
BTC price strength is showing signs of a downward reversal.
What is the road ahead?
Traders and market observers are at odds as they were at the time, but understanding requires more and more time.
Bitcoin has successfully navigated turbulence from the year's major events to date, and with the block grant now halved in just two months, bets are on the classic rally.
The picture doesn't look too predictable – BTC/USD may reach a peak before the start of a “secular” bear market in 2024, analysts warn this week, and the overall downside potential for price action is under the microscope.
Add to this the tumultuous macroeconomic and geopolitical situation in the United States and beyond, and it's even clearer that crypto dynamic catalysts are waiting at every turn.
Cointelegraph takes an updated look at the key factors affecting BTC price action and how they might play out in the coming days at the February monthly close.
The weekly close will send Bitcoin to November 2021
Bitcoin sits at a weekly high on Feb. 18 — a November 2021 high of around $52,100, according to data from Cointelegraph Markets Pro and TradingView.
That would take the market symbolically back to its then euphoric high – a high of $69,000.
Predictions for how the week would end were mixed, with various support levels on the radar for the market to reverse at the last minute. In the event, however, there was a little volatility, which led to the Asian trade session holding around $52,000.
“Bitcoin is at $52,000 with a total market capitalization of $1.9T,” Michael van de Pop, founder and CEO of MNTrading, wrote in the X summary.
Van de Pop explained the currently popular theory regarding the short-term BTC price performance – before returning to test another leg of recent results.
“The surface looks relatively sealed for Bitcoin,” he continued.
“My total thesis is about $54-58k and then consolidation and broad correction. After that rotate to Altcoins.
However, the change has eluded spot markets for most of the past week, creating a focal point for the $52,000 and associated resistance liquid sticker.
Joining in on the recent forecast, Venturefounder, a contributor to on-chain analytics platform CryptoQuant, agreed with a $58,000 target. Its foundation, however, focuses on the behavior of the Relative Strength Index (RSI).
“If all are followed, the last BTC RSI high signal exiting the downward channel will push the price higher (~$58k), then a correction will follow and this level will become a strong support (~$50k) going forward.” He concluded.
#Bitcoin cycles are never the same, but it often says so.
1) Weekly RSI making lower highs, lower lows to higher highs and completing higher lows.
2) Following the cycle peak, the first three RSI peaks > 50 will have a strong reaction against resistance (or… pic.twitter.com/OW59mXPjdL
— venturefoundΞr (@venturefounder) February 19, 2024
Over the weekend, Venturefounder, which takes BTC's price, admitted that it tends to err on the side of caution in the current environment, noting any purchases, despite its strong performance despite its position in Bitcoin exchange-traded funds (ETFs).
As Cointelegraph continues to report, these represent a major shift in market volatility over the past month.
“Honestly, Bitcoin is holding up so well that no one is buying the #BTC ETF over the weekend,” he summed up.
I think the non-ETF buyers of that level are expecting the strong ETF net flow to continue and therefore buying the dip are basically trying to run the price next week.
Half cycles are controversial.
The debate surrounding the halving and its impact on prices has intensified with less than two months to go.
For some, price performance in recent months – particularly with the emergence of institutional access via US spot ETFs – calls for a re-evaluation of normal Bitcoin market cycles.
The four-year cycle is revolving around halving events, suggesting a challenge to price swings that come at unusual times.
#Bitcoin has made history.
A retracement from the .618 FIB closed a weekly candle from a high to a cycle low before BTC's first decline: pic.twitter.com/MuhXMdrHF9
— Matthew Hyland (@MatthewHyland_) February 19, 2024
As Cointelegraph reports, others view the current cycle as “business as usual” — a cycle peak should come months or so after the halving.
In some of his latest X engagements, popular trader and analyst Credible Crypto continues that narrative.
“Is this time really different? Or is this time the same as the previous times except people *think* it's different because they mistakenly use the half as a single point for our cycle?” he asked.
Credible Crypto linked to a previous post on the end of 2023 and thought it was peaking at the end of 2024, which it then called “the first major global Bitcoin bear market.”
“In the coming months, I expect it to continue upward at a more aggressive pace than we've seen so far, building up to what could be a major hit to the books to conclude this multi-year cycle,” the post read.
But there are plenty of opportunities for gains ahead of the April halving, according to another trader and analyst, Rect Capital, which has seen a “pre-halving rally” that began two months ago in previous cycles.
“BTC has one last pre-half left,” he added last week.
“Historically, it tends to happen only a few weeks before it happens.”
Global liquidity conditions support crypto
Caution will mark the sentiment of macro analysts this week after recent US inflation data gave the Federal Reserve a major headache.
Both the Consumer Price Index (CPI) and the Producer Price Index (PPI) rose more than expected in January.
Markets that had previously been confident that the Fed would lighten interest rate policy and reduce quantitative tightening (QT) as early as March have quickly reassessed the odds.
This, in turn, weakens the appetite for risk assets that appreciate increased liquidity, which is the basis for investor demand. With the S&P 500 reaching record highs this month, some divergence between market performance and macro reality continues to play out.
According to Philip Swift, creator of the Bitcoin Stats platform, global liquidity conditions are better than ever on the contrary – a possible crypto stimulus in itself.
“We are nearing a new all-time high in global liquidity,” he said with the M2 money supply chart in early February.
“Arguably the most important thing for a bull market. That's when the party starts for Bitcoin.
In the US, however, much remains to be done to unsettle markets and bring about a more hawkish stance on the Fed ahead of the next interest rate decision at the end of March.
This week, jobless claims, the Fed's January meeting minutes and the S&P Purchasing Managers' Index (PMI) lead the pack, as well as various speeches by Fed officials.
Key events this week:
1. Presidents' Day, markets are closed – Monday
2. Fed meeting minutes – Wednesday
3. S&P Global Services PMI data – Thursday
4. Existing home sales data – Thursday
5. 5 Fed speaker events this week
6. ~15% of S&P 500 companies report earnings…
— Kobeissi Letter (@KobeissiLetter) February 18, 2024
“We are looking at the federal minutes at a time of reasonable cuts,” business resource Kobayashi's letter in the X Weekly notes in part.
Price cuts are now being pushed through June.
Bitcoin open interest matches a 26-month record high
The main Bitcoin futures for CME Group have seen all-time highs in open interest (OI) in recent days.
At $6.8 billion, OI saw a significant increase this month as ETF inflows increased and BTC price action showed a rebound above key resistance levels.
Now, a similar phenomenon is playing out elsewhere.
According to the latest data from CoinGlass, the exchange's total OIA reached $22.8 billion on February 19, surpassing Bitcoin's all-time high of $69,000.
OI spikes have been ahead of BTC prices in recent months, but analysts say the volatility could go either way.
“Bitcoin's hot position is at a very dangerous level. Open interest on all coins will reach a 2021 high,” CryptoQuant contributor JA Marton warned last week.
“Yes, the price may be higher, but the risk-reward ratio is not ideal.”
#Bitcoin open interest will only rise from February.
It increased by +3.3 billion dollars or +32%.
Spot premium and funding rates are still neutral so that's good. pic.twitter.com/dSa0YmZEn2
— Daan Crypto Trades (@DaanCrypto) February 12, 2024
Both remain at relatively manageable levels and hedge against downside risk, which suggests a lack of “irrational exuberance” among traders in general.
Crypto sentiment turns to “extreme greed”.
When it comes to crypto sentiment, there are increasing signs that the average investor has reached a euphoria.
Related: Bitcoin Price Has No Chance of Hitting All-Time High Before Halving – Here's Why
The latest Crypto Fear and Greed Index shows Bitcoin's all-time high levels of greed from 2021.
Last week, the index scored 79/100, corresponding to “extreme greed” and briefly hitting those 2021 levels.
At the time of writing, the index, itself a late indicator, stood at 75/100.
“Absolute bullying breeds correction. In the year By 2021, almost everyone saw a 69k ATH and believed there was more upside,” Venturefounder commented on market psychology over the weekend.
It is almost certain that $BTC will break below $25k again by October 2023. Bitcoin doubled in just a few months without a major correction.
The index historically indicates an inward long-term market correction at 90 or above — something that hasn't happened since the first quarter of 2021.
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.
