Bitcoin (BTC) begins a new week with bulls aiming for all-time highs as February BTC price volatility continues.
After a solid monthly close, the first weekly candlestick of March ended comfortably above $60,000.
As expectations grow for what will happen next, sellers are tacitly accepting that there may be nothing standing in the way of Bitcoin heading towards price discovery.
This scenario presents one of the most optimistic outcomes for 2024 and is considerably better than many traders and analysts expected.
That said, there remain many volatile hurdles between now and the end of the month, and the April block subsidy halving itself remains a significant moment.
The action will begin almost immediately with the US Federal Reserve to provide guidance on economic conditions.
While this may not come as a surprise to risk asset traders, cryptocurrencies already have plenty to contend with, and exchange-traded funds (ETFs) may continue to buy BTC. Yet the average investor is currently acting on a basis of “extreme greed.”
Will the market trajectory be able to maintain recent trends, or is a period of more significant correction and consolidation possible?
Cointelegraph looks at the current state of the Bitcoin market, which could be a turning point in the current BTC price cycle.
Bitcoin approaches Crunch all-time high zone
Bitcoin started the week at a high on March 4th. The week’s closing price caused price changes of $2,000 per hour, including multi-year highs.
Cointelegraph Markets Pro and TradingView We see a hit of $64,282 on Bitstamp, and BTC/USD is even higher, hovering near $65,000.
On-chain statistical resource where just $5,000 separates bull market from all-time high, limiting year-to-date gains of more than 50% coin glass confirm.
Across social media, traders and analysts are divided between optimism and disbelief, with calls for a major reversal remaining loud.
“Interesting timeline to read today. 50% are looking for fairly high standards, 50% are looking for market-to-rug levels. Typically this happens weekly, but noticeably more spread out than usual. ” says popular trader Skew. I have written In his latest post on X (formerly Twitter).
“Current prices for large-cap stocks are likely near a major psychological inflection point. The reason this is important is because this imbalance will lead to further momentum and consensus on the next big move in the market. This is because there is a high probability that a mean reversion transaction will actually take place.
Skew cited the consensus for continued upside near sensitive all-time highs from 2021 onwards. So far, other regional highs from the year have not acted as resistance for long.
On the more cautious side is Venturefounder, who contributes to on-chain analytics platform CryptoQuant.
in him latest analysisHe suggested that BTC/USD formed a “cup-and-handle” pattern at its all-time high, with bulls and bears alike testing harshly and potentially correcting to a low of $40,000. did.
“Are you ready? BTC rises to the old ATH to eliminate all bears, then heads towards $50,000 or $40,000 Bitcoin to eliminate all bulls after halving will be corrected,” he wrote.
“We will then rally to ATH and eliminate all bears…We will remain in this range until Q4 2024.
Contrasting this view is the broader argument that crypto investing has yet to gain mainstream attention.
If this situation changes, a new wave of viral interest in both Bitcoin and altcoins could materialize, fueling an increasingly parabolic market.
“The bulls are in complete control heading into the week’s close,” said analyst Matthew Hyland. concluded On the weekend.
“Most were and still are offside. Maybe in the crypto Twitter bubble it doesn’t seem like it’s true, but in the real world most people don’t get exposed. No. The panic hasn’t started yet, but it will.”
Analysts warn of ‘bubbles’ in crypto market
Taking a closer look at the possibility of a correction is Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriol Investments.
Mr. Edwards, who has focused heavily on the impact of next month’s halving, was in a calm mood this week, unconvinced by recent developments.
Even if a sharp turnaround doesn’t happen right away, he argues, any remaining enthusiasm from last month may just be taking time to fade.
“It can last two to three weeks until the foam washes out, which means it could be mid-to-late March,” he said. warned.
Edwards emphasized that he is not bearish from a long-term perspective. As an investor, you need to manage risk, especially in markets that are at historically critical levels.
“The price could go up at any time, but it’s a matter of risk management and probability. The risk profile here is much different (worsening) than it was when Bitcoin was $16,000, for example. It’s just a matter of portfolio “It’s something to keep in mind in management,” he continued.
“The volatility (both up and down) in these zones increases by orders of magnitude. The only comparison we have now is early 2021. I think this bull market still has a long way to go.”
Early 2021 saw a similar euphoria across cryptocurrencies before peaking out in early Q2, and a subsequent correction kept Bitcoin’s new all-time highs off the charts until November.
Bitcoin market capitalization counters overheated derivatives
Funding rates are at an all-time high amid concerns about market overheating.
Current data from CoinGlass shows that some platforms are above 0.1%, while the world’s largest exchange Binance itself is closer to 0.05%.
Open interest, a key precursor to BTC price movement, reached a massive $27.7 billion on March 4th, which speaks for itself.
Nevertheless, one analyst noted that the expansion in Bitcoin’s market capitalization over the last week means there is room for further growth in the OI aggregate.
“Bitcoin’s notional open interest is nearing an all-time high. However, when divided by current market capitalization, it is only 2.25%, which is the historical average,” says a study by cryptocurrency insight firm CryptoSlate. and data analyst James Van Straten. summarized Part of X post.
An attached chart from on-chain analytics firm Glassnode showed a similar situation for both Bitcoin and the largest altcoin, Ether (ETH).
Meanwhile, this week began with CME Group Bitcoin futures initially trading hundreds of dollars higher than the spot market.
Fed Chairman Jerome Powell plans to take a “hawkish position” in testimony
The Fed, especially Chairman Jerome Powell, will be the highlight of the upcoming US macro week
Over two days starting March 6, Mr. Powell will testify before House and Senate committees to provide policymakers with an update on the economy.
At the twice-yearly event, Powell is expected to maintain his familiar talk on inflation and interest rates.
The latter is particularly relevant to crypto and risk assets, where much-awaited rate cuts tend to boost performance. So far, this has yet to materialize, with recent macro data pushing market odds to later this year.
“Powell is expected to maintain his hawkish stance in his semiannual testimony to Congress, signaling to markets that the Fed is in no hurry to cut rates,” the Bloomberg Analyst Group said. summarized this weekend.
“If that leads to tighter financial conditions, pressure on the economy continues and the impact of monetary policy is likely to be further delayed.”
Although the market sees little chance of another rate hike, data from CME Group shows that as of March 4, the chance of a March rate cut was almost zero. fedwatch tool.
Nevertheless, trading source Kobessi Letter, in its weekly roundup of upcoming macro events, suggested that considerable volatility is expected before the Fed’s decision scheduled for March 20th. .
“We are now 17 days away from the long-awaited March Fed meeting. A lot can happen before then.” concluded With X.
Statistics to be released in the coming days will also include non-farm payrolls over the weekend.
Sentiment data points to price fixation
For the average crypto investor, the lure of all-time highs is having a familiar impact on sentiment.
Related: Bitcoin daily withdrawals attempt record as $2 billion leaks from exchanges
by Cryptocurrency Fear and Greed Indexlevels of “extreme greed” are at their highest in years.
At 82/100, these have reached levels that historically indicate a market turnaround on an increasingly unsustainable trajectory.
Research firm Santiment analyzed the social media phenomenon last week. is also implied Increased focus on prices could lead to a cooling-off phase.
“After an explosive February that saw the largest monthly market cap increase in crypto history, the discussion has increasingly turned to price-related topics, primarily Bitcoin, AI tokens, and $PEPE.” he said after the end of monthly trading.
“As a result, the market could be flat for a little while.”
The attached graph shows how the frequency of certain topics appearing on social media platforms changes over time.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.
