Bitcoin (BTC) has started the last week of February on a strong note, surpassing $52,000 and setting a new two-year record for the weekly close. The market is showing bullish momentum, with little indication of a downward reversal. Traders and market observers are divided on the timing, but there is a growing consensus for further upside. Bitcoin has successfully weathered major events this year, and with the block subsidy halving just two months away, many are betting on a classic rally. However, the future outlook is less certain, with some analysts warning of a potential market top in 2024 followed by a “secular” bear market. Additionally, the impact of the halving on price action is being closely scrutinized, especially given the turbulent macroeconomic and geopolitical landscape. In this article, we will explore the major factors influencing BTC price action and their potential implications as we approach the end of February.
Bitcoin closed the week on February 18 at around $52,100, its highest level since November 2021. This brings the market close to the previous peak of $69,000. While predictions for the week’s end varied, little volatility occurred, and the price held steady at $52,000. Some traders believe that Bitcoin will continue to rise before testing recent gains. However, there has been little change in spot markets, with $52,000 acting as a strong resistance level.
The debate over the halving and its impact on price is becoming more heated as we approach the event in two months. Some argue that recent price performance and the emergence of institutional access via U.S. spot ETFs are challenging the traditional Bitcoin market cycles. They suggest that price shifts are occurring at unusual times, disrupting the four-year halving cycle. However, others believe that the current cycles are following the usual pattern, with the market reaching a cycle top months after the halving. Traders and analysts continue to discuss the potential impact of the halving on Bitcoin’s price.
Global liquidity conditions are currently favorable for cryptocurrencies. While recent U.S. inflation data has caused concern, global liquidity remains high. This could serve as a catalyst for the crypto market. However, there are still uncertainties in the U.S. market, and the Federal Reserve may adopt a more hawkish stance before its next interest rate decision in March. Various economic indicators and speeches by Fed officials will be closely watched this week.
Open interest in Bitcoin futures has reached an all-time high on the CME Group exchange, reflecting increased interest from institutional investors. Total exchange open interest also reached its highest level since Bitcoin’s all-time high of $69,000. While open interest spikes have historically preceded price increases, analysts warn of the potential risks associated with fresh positions. The overall sentiment in the crypto market is leaning towards extreme greed, which historically indicates a forthcoming market correction.
In conclusion, Bitcoin is starting the last week of February with a strong performance, reaching a new two-year record for the weekly close. The market is showing bullish momentum, with expectations of further upside. However, there are uncertainties regarding the timing of a market top and the impact of the halving on price action. The macroeconomic and geopolitical landscape adds to the volatility in the crypto market. Traders and analysts are closely monitoring various factors that could influence Bitcoin’s price in the coming days and into the February monthly close.