Bitcoin (BTC) Begins New Week with Strong Momentum and Eyes on Key Resistance at $50,000
The leading cryptocurrency, Bitcoin (BTC), is starting the week off strong with its highest weekly close since December 2021.
With a 13% increase in price over the past week, BTC traders are closely watching the key resistance level of $50,000 to see if there is more potential for upside.
As the halving event approaches in just two months, many are speculating on how high BTC/USD could potentially go in anticipation of this highly anticipated event.
However, there are still several obstacles to overcome. This week, the United States will release important macroeconomic data, which is especially crucial given the current uncertainty surrounding fiscal policy.
The Federal Reserve will be closely monitoring the Consumer Price Index (CPI) and Producer Price Index (PPI) for January, as the market continues to expect interest rate cuts.
In the background, the success of U.S. spot Bitcoin exchange-traded funds (ETFs) is generating excitement among observers, who believe that a consistent institutional demand could provide the necessary fuel for BTC to reach new all-time highs in the coming months.
In this weekly update, Cointelegraph will dive into these topics and more, providing insight on what to watch for in terms of BTC price performance.
Bitcoin’s Price Reaches $50,000
The latest weekly close on February 11 was a significant milestone for Bitcoin bulls, as data from Cointelegraph Markets Pro and TradingView shows.
The cryptocurrency reached a high of $48,315, its highest level since mid-December 2021.
Last week saw gains of almost 13.5%, according to data from CoinGlass – making it the best week for Bitcoin in 2024 so far.
The question on everyone’s mind now is, “What’s next?”
Opinions vary on the answer to this question – some believe that Bitcoin has a good chance of breaking through key resistance at $50,000, while others are more skeptical.
In the latter camp is Michaël van de Poppe, founder and CEO of trading firm MNTrading.
“Bitcoin is approaching resistance levels. The weekly candle is massive, and Bitcoin is back above $48,000,” he summarized in one of his recent posts on X.
His accompanying chart showed Fibonacci retracement levels and relative strength index (RSI) data for three-day timeframes.
Van de Poppe also noted that BTC/USD has been “stronger and more resilient” than he expected, and he believes that it could reach as high as $57,000 before the April halving.
Keith Alan, co-founder of trading resource Material Indicators, is also keeping a close eye on Fibonacci levels. He believes that the .618 Fib, which marks the top of the “Golden Pocket” on a macro fib retracement from the all-time high to the November 2022 crash-induced low, is the strongest technical resistance on the chart.
“BTC is currently testing this level, and a weekly close above $45,000 – which has already occurred – should lead to a consolidation period before attempting to break through $50,000. However, the 0.618 Fibonacci level at $48,300, which is exactly where the weekly close occurred, still needs to be overcome,” Alan cautioned over the weekend.
“In my opinion, a close above $45,000 would indicate a reversal in support/resistance levels, and a period of consolidation and retesting of support before attempting to break through $50,000 would be healthier than a sudden surge above $50,000 or a close above the 0.618 Fib,” he concluded.
Warning: Local Top Alerted by Profitability Data
James Van Straten, a research and data analyst at CryptoSlate, has expressed concern over the $50,000 mark and has flagged on-chain data as a reason for caution.
According to Van Straten, the percentage of BTC supply currently held at a profit is approaching levels seen in previous bull markets, which typically indicate a market top.
He shared this insight with X subscribers, along with data from Glassnode, an on-chain analytics firm.
In a recent analysis by CryptoSlate, Van Straten also pointed out that the last time BTC reached above 95% profit levels was during the all-time highs in November 2021.
The data also shows that there has been relatively little dormant BTC supply since the highs, as noted by Ki Young Ju, CEO of CryptoQuant.
Ju also mentioned that those who bought at the top in 2021 have been stuck in a waiting game.
Google and Web 3.0: Exploring the Future of the Internet
This week’s economic data in the United States is a must-watch for investors, with the release of the Consumer Price Index (CPI) and Producer Price Index (PPI) for January taking center stage.
These reports will provide valuable insights into the ongoing battle against inflation and its potential impact on the Federal Reserve’s monetary policy, which could affect the performance of risk assets.
The focus is on potential interest rate cuts, with expectations for a shift in policy at the Fed’s upcoming meeting in March fluctuating as new data emerges.
According to the CME Group’s FedWatch Tool, the likelihood of a rate cut currently stands at only 17%, with the majority of investors anticipating no change in rates.
“All eyes are on the CPI, as last month saw the first increase in inflation since September,” noted trading resource The Kobeissi Letter in a recent post discussing the week’s releases.
Short-term fluctuations in CPI data can lead to “fakeout” movements, causing temporary volatility before quickly resolving in either direction.
In a curious contrast, the S&P 500 has reached record highs despite the uncertain inflation landscape, as reported by Cointelegraph.
Web 3.0: The Future of Google and the Internet
As the current Bitcoin bull market continues, the network’s fundamental metrics are also on the rise.
On February 15, the next automated readjustment will take place, leading to an estimated 6% increase in Bitcoin mining difficulty.
If this prediction holds true, it will mark a new all-time high for difficulty, surpassing 80 trillion for the first time according to BTC.com data.
This significant jump follows a 7.3% increase just two weeks ago, making it the largest difficulty increase since March 2023.
Similarly, hash rate is also on the rise this month, reaching a recent peak of 669 exahashes per second on February 6 according to MiningPoolStats.
“Bitcoin hash rate is soaring, currently at all-time highs and up 12% in just 3 weeks. The next difficulty adjustment could be as high as 11%,” stated Van Straten at the time.
The upcoming halving will decrease the reward paid to miners per block by 50%, making it more enticing for them to engage in mining before the event takes place.
Understanding the Differences Between Web 2.0 and Web 3.0
As the Crypto Fear & Greed Index indicates that crypto investor sentiment is currently at levels of greed similar to those seen during the 2021 all-time highs, it is becoming clear that a certain pattern is emerging.
In a recent analysis, research firm Santiment pointed out that social media users tend to get excited by Bitcoin’s price spikes, but then quickly rotate into altcoins, increasing their exposure to volatility.
Despite subsequent corrections in altcoins being more drastic than those in Bitcoin, this rotation pattern has been playing out since October.
Furthermore, data from Google Trends shows that mainstream retail interest in Bitcoin is still significantly lower than its own previous highs, even though its price is only $20,000 away from the 2021 record.
It seems that the fear of missing out (FOMO) may not even begin until Bitcoin reaches its all-time high.
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