Bitcoin BTCUSD begins a new week in great shape after its highest weekly close since December 2021.
BTC price strength continues as key resistance comes into play near $50,000 – is there more upside to come?
Bitcoin traders are focusing on the odds after a 13% green weekly candle and a halving in just two months.
This event now acts as a magnet for feelings, with various theories considering how much anticipation this might take. BTCUSD in advance.
There are, however, many obstacles along the way. This week sees a slew of macroeconomic data from the United States, at a time when uncertainty over fiscal policy remains a key topic for markets and analysts.
The Federal Reserve will likely closely monitor the Consumer Price Index (CPI) and Producer Price Index (PPI) numbers for January as markets cement expectations of interest rate cuts.
In the background, meanwhile, the success story of spot Bitcoin exchange-traded funds (ETFs) in the United States has observers excited: a stable institutional supply, they suggest, could provide the necessary fuel to reach new all-time highs in the coming months.
Cointelegraph examines these topics and more in the weekly roundup of things to watch for in BTC price performance.
Bitcoin faces $50,000
The weekly close on February 11 was special for Bitcoin bulls, as data from Cointelegraph Markets Pro and TradingView shows.
At around $48,315, this is its highest level since mid-December 2021.
Last week closed with gains of just under 13.5%, according to data from statistical resource CoinGlass – easily the best Bitcoin of 2024 so far.
The question for experts today is naturally: “What’s next?”
This is where opinions tend to differ: some see a strong chance of overcoming key resistance around $50,000, while others don’t see such an important price level falling so easily.
In the latter camp is Michaël van de Poppe, founder and CEO of trading firm MNTrading.
“Bitcoin is looking at resistance. Massive weekly candle, thanks to which Bitcoin returns above $48,000,” he summarized in one of his latest articles on X.
“I am personally interested in the price which will be around $50,000 in the next 1-2 weeks.”
An attached chart shows the Fibonacci retracement levels currently in play, as well as Relative Strength Index (RSI) data on three-day time frames.
Van de Poppe added that BTCUSD had been “stronger and more resilient” than expected, estimating that up to $57,000 was still possible before the April halving.
Keith Alan, co-founder of Trading Resource Material Indicators, is also interested in Fibonacci levels, calculated from Bitcoin’s current all-time high of $69,000.
“BTC is testing what I consider to be the strongest technical resistance on the chart. The .618 Fib marks the Golden Pocket top on a macro fib retracement of the ATH to the low induced by the @FTX_Official crash of Nov 22,” he warned over the weekend.
Alan suggested that a weekly close above $45,000 – which subsequently materialized – should lead to a period of consolidation before an attack on $50,000. The 0.618 Fibonacci level at $48,300 – exactly the weekly closing point – nevertheless still had to be overcome.
“I monitor the weekly close. IMO a close above $45,000 would mark an R/S reversal and some consolidation and a retest of support before attempting $50,000 would be healthier than a tear above $50,000 or even a close above the .618 Fib,” he concluded.
“I would consider the latter to be very manipulative and would expect him to FOMO on long positions before squeezing short positions in the $52,000-$55,000 range.”
Profitability data triggers local warning
More concerned about the $50,000 mark, James Van Straten, research and data analyst at crypto news company CryptoSlate, pointed to on-chain data as a reason for caution.
Citing the percentage of BTC supply now profitably realized, he showed that BTCUSD is now approaching the peak levels of past bull markets.
“Bitcoin is approaching 95% of total supply in profits, which typically marks highs,” he told X subscribers alongside data from on-chain analytics firm Glassnode.
“We got to 93% when Bitcoin was at 49,000. The reverse also works when less than 50% of the total supply is made in profit, which usually marks a bottom.
In CryptoSlate analysis over the weekend, Van Straten added that November 2021 all-time highs produced the latest profit levels of over 95%.
The data shows that relatively little of the BTC supply has remained dormant since the highs.
As Ki Young Ju, CEO of analytics platform CryptoQuant, noted, those who bought the top in 2021 played a dark waiting game.
#Bitcoin buyers in the 2021 bull cycle are nearing break-even.
They waited almost three years to see $48,000 again.
Congratulations to those diamond hands!https://t.co/JqLntsCm7g pic.twitter.com/a2rz8YGBK7
CPI week arrives as stocks hit record highs
This week sees a classic set of US macroeconomic data, with January’s CPI and PPI figures leading the way.
These results will provide key insights into the fight against inflation and the corresponding likelihood of a Federal Reserve policy shift toward risky assets.
Interest rate cuts are the key topic, with hopes for such a reduction as soon as the Fed’s next meeting in March fluctuating as the data comes in.
According to the CME Group’s FedWatch tool, markets see only a low probability of this happening, around 17%, while the majority expect current rates to be maintained.
“All eyes are on the CPI as inflation jumped last month for the first time since September,” wrote business resource The Kobeissi Letter in part of an article detailing the week’s releases .
“Big week ahead. »
Key events this week:
1. January CPI inflation data – Tuesday
2. US Retail Sales Data – Thursday
3. Philadelphia Fed manufacturing data – Thursday
4. PPI inflation data for January – Friday
5. Total of 8 Fed conferences this week
6. ~20% of S&P 500 companies report profits
Over short periods of time, CPI releases can trigger temporary volatility, leading to episodes of “counterfeiting,” which can quickly resolve one way or the other.
Interestingly, as Cointelegraph reported, the S&P 500 is hitting all-time highs despite the precarious inflationary landscape.
Mining Difficulty Sets Up Latest All-Time Highs
Much less unusual in the current Bitcoin bull market is another jump in the network’s fundamentals expected this week.
During its next automated readjustment on February 15, Bitcoin mining difficulty is expected to increase by approximately 6%.
If this comes true, it will bring the difficulty to new all-time highs and above 80 trillion for the first time, according to data from monitoring resource BTC.com.
This impressive development would follow a 7.3% jump from two weeks ago, forming the largest increase in difficulties since March 2023.
A similar story is evident for hash rate, which continues its own upward trend this month.
The latest raw data from MiningPoolStats shows the most recent local high of 669 exahashes per second on February 6.
“The Bitcoin hash rate is absolutely booming, it is at ATH and up 12% in 3 weeks. The next difficulty change for Bitcoin could reach 11%,” Van Straten wrote at the time.
“It’s the part of the cycle just before the halving where it’s deployed at all costs.”
The halving will reduce the amount paid to miners as block rewards by 50%, less fees, increasing the attractiveness of pre-committing.
Cryptocurrency “Greed” Against Absent Retail
As crypto investor sentiment rides similar levels of greed to those seen at all-time highs in 2021, according to data from the Crypto Fear & Greed Index, a pattern is emerging.
Related: 6-Digit BTC Price in 2024? Bitcoin Analyst Says $55,000 Is Now “Worst Case”
In a recent analysis, research firm Santiment noted that social media users continue to get excited about BTC price surges, only to turn to altcoins and increase their exposure to volatility.
“Bitcoin’s +13% price rise over the past week has led traders to speculate on many new support and resistance milestones, with 50,000 widely expected,” he explains.
“Ironically, while these price levels were breached, altcoins flipped the script during the weekend trading hours as the crowd became too focused on the price of $BTC.”
Santiment showed that despite the subsequent correction of these altcoins more difficult than Bitcoin, the rotation pattern has been unfolding since October.
“Bitcoin retraces slightly, the season ends in a much more radical way,” he summarizes.
Google trends are undoubtedly one of the best indicators in retail.
We represent 25% of 2021 interest, but only 30% of #Bitcoin’s all-time high.
FOMO might not even start until ATH. pic.twitter.com/qyZbk48ASa
Google Trends data, meanwhile, shows that mainstream interest in Bitcoin remains a fraction of its own highs, although its price is only $20,000 shy of the 2021 all-time high.
“The FOMO might not even start until the ATH,” Van Straten argued.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.