Will ‘Pre-Half High’ end soon? 5 things to know in Bitcoin this week
Bitcoin (BTC) is at a Crossroads with BTC Price Action Preparing for a February Close – Could It Be a High?
Still above $50,000, the largest cryptocurrency has lost its bullish momentum over the past two weeks.
The prospect of an attack at higher levels remains for some, but reality seems to be taking hold as the buyer's pressure fails to overcome some parties' desire to sell.
The coming days are guaranteed to improve the status quo – key US macroeconomic data will be paired with a volatile source known for the closeness of the monthly candlestick.
The macro landscape is inherently bleak – inflation hitting forecasts recently has cast a question mark over future Federal Reserve actions and whether risk assets will cut benchmark interest rates in the near future.
For Bitcoin, this timeframe especially has its own internal volatility, and the next half will be slower.
Cointelegraph looks at these topics and more in our weekly roundup of key BTC price factors to consider when setting the market in the coming days.
All eyes are on the monthly close of BTC price.
Bitcoin continues to trade in a narrow range after its weekly close in the second half of February.
At $51,700, the latest close provided little impetus for bulls, coming in from $450 earlier, according to data from Cointelegraph Markets Pro and TradingView.
As for the pointers to the commercial utility, the writing is already on the wall.
In a post on X (formerly Twitter) about one of his proprietary trading tools, he wrote, “This is a red W with a new trend precognition (down) signal for BTC.”
The signal is temporary until this new candle closes. I expect it to be vindicated, but we have some wild cards with Thursday's US economic data coinciding with the monthly close. We expect more volatility as we approach close M.
Some prominent market watchers are more positive, even if they act on the side. Among them is social media researcher Bitcoin Mugger.
“Market makers seem to have their eyes on $53k shorts right now,” says the latest section of the X post.
The $50,000 grant continues to be held in stone.
Market makers seem to have their eyes on the $53K shorts.
Bitcoin bears are going to disappear this week. The road to $60k+ is on the horizon. Make a mark. #bitcoin pic.twitter.com/Lz4cNLg0p2
— Bitcoin Munger (@bitcoinmunger) February 25, 2024
BTC/USD is still up more than 20% in February, according to data from statistical resource CoinGlass.
PCE data precedes the monthly close
The week in macro markets was highlighted by US jobs and spending data, the latter of which is the Fed's preferred measure of inflation.
Both come on February 29, providing a volatile end to the risk assets month.
Employment trends fueled market sentiment in January, with the Personal Consumption Expenditure (PCE) index critical to federal policy regarding interest rate decisions.
The numbers come at a difficult time. Inflation data recently beat expectations, and markets strongly supported the Fed's rate cut at its March meeting.
According to data from CME Group's FedWatch Tool, March is currently just 4 percent likely to see rates rise, down from 25 percent in May.
At the same time, optimism in US stocks led the S&P 500 to an all-time high.
“Last week it was about Nvidia, this week it's back to the federation.
“Is it possible to continue the record high run?”
Key events this week:
1. New Home Sales Information – Monday
2. CB Consumer Confidence Data – Tuesday
3. US Q4 2023 GDP Data – Wed
4. January PCE inflation data – Thursday
5. ~10% of S&P 500 companies report earnings
6. A total of 12 events of the Federation speaker this week
Another busy…
— Kobeissi Letter (@KobeissiLetter) February 25, 2024
Kobeci cited last week's strong earnings report from tech giant Nvidia.
Difficulty due to recent highs
As BTC price action cools, network fundamentals are asserting their upside this week.
The latest estimates from statistical resource BTC.com suggest that the Bitcoin mining problem will ease with the upcoming automated correction on February 29.
Difficulty, like hash rate, has seen vertical upside for most of the past year, with retracements not lasting long before new all-time highs are replaced.
Currently, this new reduction is around 2%, while the two previous adjustments were increases of 8.2% and 7.3%.
According to Cointelegraph, a popular theory is that Bitcoin miners are eager to make the most of the current supply rules before the block subsidy is halved in April, which will reduce the amount earned in the newly minted block by 50% to 3.125 BTC.
That said, 2024 has seen the opposite trend of distribution among miners, even going against some of the larger investor segments, or “whales”.
According to the data of the on-chain analysis company Glassnode, since the peak of 1,833,321 BTC on October 23, the BTC balance of known mining wallets has decreased by 1.16%.
However, studies have shown that, in general, inventory more than offsets existing new supply.
“Currently, the monthly output of Bitcoin is 27,000, but the expected halving event in April is to reduce this issue to 13,500 BTC per month. What is interesting is that in all the common pool, the Bitcoin stock is more than four times the production,” said James Van, research and data analyst at CryptoSlate company. Stratton wrote last week.
The ‘whales' who hold between 1k-10k Bitcoins dig deeper into the behavior of a particular group, accumulating approximately 236,000 BTC in a 30-day period, leading the collection run. Meanwhile, ‘Super Whales' who hold 10k Bitcoin or more were observed distributing 50k Bitcoin last month.
Analyst Sees Bitcoin's “Pre-Half Top”
Prominent trader and analyst Rect Capital said that half of the bitcoin investors are offering a “final bargain-buying opportunity” at the start of the macro reforms.
In one of his latest YouTube shorts, Rekt Capital examines the BTC price gains seen around both the 2016 and 2020 halving events.
The first of these peaked at 40% of the area before halving, while 2020 saw a 19% correction.
But let's say the pre-half peak is coming soon,” he explained.
“A 19% retracement — essentially mimicking the 2020 retracement process around half the event — would put us at $42,000, and that's the highest of the retracement range we're out of right now.”
The video entertained the idea of a deeper dive, with critical floor levels of $37,000 and $31,000 on the table based on historical bearish behavior.
Also entertaining the possibility of a significant BTC price drop is Venturefounder, the promoter of on-chain analytics platform CryptoQuant.
For it, the 50-day moving average forms a historical reference point.
With Bitcoin's cycle low in 2023, when BTC was 12 percent above its 50-day moving average, there was a correction, he said on X.
“Each correction ended between 8-11% below the 50DMA.”
The 50-day trend is currently set at $45,700, the level Venturefounder added is the value of the Bitcoin exchange-traded funds (ETFs), which investors in the space value (DCA).
However, he admitted that the trend line is moving higher and approaching the spot price, so if the market continues to track sideways, it may lose its significance.
Spectator profit taking gives a price target of 48,000 BTC
Short-term holders (STHs) form another reason to believe that a BTC price decline may be on the horizon.
Related: Bitcoin Funding Rate Turns Negative, But Have Traders Turned Bearish?
In one of the Quicktake Market Updates on February 25th, CryptoQuant contributor CryptoOnChain warned about the upcoming gains.
Analyzing short-term holders' cost-to-profit ratio (SOPR) measure, cryptocurrency speculation concluded that conditions may soon be favorable for market distribution.
STH-SOPR measures how much profit STHs – investors holding BTC for 155 days or less – have against their purchase price. The metric's 30-day moving average is linked to BTC price movements.
Now, CryptoOnChain argues, Bitcoin is “approaching the selling point for short-term investors.
“An examination of the technical chart also confirms this issue,” confirmed Quicktake.
“Bitcoin is in a position below the resistance in the technical chart. It looks like Bitcoin may go down to around $48,000.”
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.
