"Strong resistance." What will happen to the price of bitcoin in the coming days
Analysts of Exmo and BitRiver estimated when the bitcoin rate will overcome the mark in $25 thousand.
Bitcoin (BTC) rate fell below $24,000 on the morning of February 22. The asset has fallen by $1,000 per day, from $24,900 to $23,900. According to CoinGecko, at 14:00 time the first cryptocurrency is trading at around $24,000 and has fallen by 3.5% within 24 hours. Bitcoin has a market capitalization of $465 billion with a daily trading volume of $44.5 billion. The share of the asset on the market is 40.4%.
During the day, traders' positions were liquidated for $150 million. According to Coinglass, the most liquidations occurred in pairs with bitcoin - $52.6 million, followed by Ethereum (ETH) with losses of $25.2 million. The second largest cryptocurrency exchange Coinbase reported a net loss for last year - it exceeded $2.6 billion.
"The market as a whole looks optimistic."
CEO Exmo.me
Bitcoin showed staggering growth in January, but February was less productive. The price needs to "rest" before further movement. Bitcoin (BTC) has very strong resistance at the level of $25K and it will take some time to accumulate to pass this level. The other altcoins from the top 20 by market capitalization are also stuck in a narrow price range. The market as a whole looks optimistic, and participant sentiment has improved over the past couple of months, with more and more good news and positive metrics emerging, as well as investments by large tech companies in the cryptocurrency industry. Many believe that a bull market has arrived.
At this point, there is no intrigue about the extent to which the Fed will raise interest rates on March 22; more questions arise about the regulator's goals. Already the markets are expecting a rate hike above 5% and some banks are predicting 5.5%. Also, everyone is wondering how long the Fed will keep the rate high. The regulator was expected to start cutting interest rates in the fourth quarter, but the closer the time comes, the more doubtful it is. This situation could lead to asset sales, as financial market participants "started buying back too soon." So-called "smart money" is now predominantly in cash or protective assets. And less experienced investors are often subject to hysteria and panic.
We should also pay close attention to the rhetoric of Fed Chairman Jerome Powell and other speakers. A strong labor market, as well as a possible rise in the price of oil, entitle the Fed to be tough on the economy. Rising unemployment could soften the regulator's stance, and inflation of 4-4.5% by summer could give hope that a rate cut will occur as soon as this year. There is a high probability (over 90%) that the FOMC will raise rates by 0.25 p.p. to 5% at its upcoming meeting. If the phrase "further hikes are appropriate" comes out, the markets may take the news negatively.
Short-term the BTC needs a "rest" after the excellent movement a month earlier. Resistance at $25K turned out to be too strong, and the buyers did not have enough strength to pass it. In the short term, we should expect a small correction to the area of $22.5-23 thousand, too much liquidity has accumulated "below" and the big players will obviously want to take it. In the future, in case the price fixes above $25 thousand, the next stop will be around $28 thousand, and it will not be far from $30 thousand.
The report of the Coinbase exchange turned out to be controversial, the shares of COIN after falling by 1% on the premarket. Earnings per share (EPS) of $2.46 and total fourth-quarter earnings of $629.10 million (with a forecast of $587.81 million) are better than expected. As you can see, traders rated this report plus or minus with no sharp fluctuations, although the exchange's past three reports have been markedly worse than today's. The big concerns are about the ban on stacking by other exchanges and the situation with Stablecoin, which accounts for a significant portion of Coinbase's revenue. It's worth keeping an eye on this news as it could have a significant impact on the price of COIN. Not too long ago, Katy Wood and her hedge fund ARK Invest started buying Coinbase stock again and now could start selling it at any time.
In other crypto-assets, the hype around artificial intelligence is still going on, so coins related to this direction are noticeably "shooting" up. There will be news that a certain token from the category has made a strong profit in a short period of time for some time to come. Considering the whole market, we can say that we have entered the accumulation zone. It is a transitional stage before a full-fledged bull market; for that reason, you can find more and more data that whales are actively buying this or that coin - from the last one you can remember Cardano (ADA), Litecoin (LTC) and bitcoin as well. Full-fledged position formation by big wallets is starting to take place.
Bitcoin met strong resistance in the area of $25-25.25 thousand. This is a serious level, and sellers are well aware of what will follow when it is surrendered. Buyers tried to pass it five times already, and all attempts failed. The fall of the S&P 500 index and the recovery of the dollar index forced buyers to retreat from the highs they reached.
In 12 trading days, the S&P 500 Index fell 4.72%. Investors are interpreting earlier U.S. statistics as evidence that the Fed will be raising interest rates longer to control inflation. Plus, there are occasional warnings in Bloomberg articles about an impending collapse of the S&P 500, which also does not add to investors' optimism in the stock and cryptocurrency markets.
According to the latest data from CME Group, the market is considering a 25bp rate hike at the U.S. Federal Reserve's March 22 meeting with a probability of 79 versus 87.8% a week ago. Market participants expect the rate to rise to 5% APR, May 1 to 5.25% with a 77.7% probability. It is important for investors now that the U.S. Central Bank does not increase the rate hike again to 50 from 25 bps.
Sellers protected the level of $25 th. Now buyers need to protect the level of $23.8 th. to prevent the strengthening of the downward correction below $23 th. The technical picture on the daily chart indicates the continuation of upward movement with the targets at $29-30 th. If on Wednesday the trading ends above $24.5 th, If the level of $23.3 thou will not resist, then risks of bitcoin falling to $22.1 thou will sharply increase.
Watch the dynamics of the dollar and futures on the S&P 500 index. Without the growth of the index, buyers will not have enough strength to pass resistance and hold support.
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