Bitcoin’s Rally Hit Resistance – Skepticism is Growing
The largest cryptocurrency by market cap experienced a classic fakeout in the low-volume weekend trading, slipping below $25,000.
Although Bitcoin had made swift gains and even touched new six-month highs in the past week, February’s progress has been much slower than January’s 40% gains.
Bitcoin’s bullish rally paused
BTC experienced a fakeout during low-volume weekend trading and slipped below $25,000, and bulls still lack momentum. The resistance at $25,000 was one of the primary reasons for the rally’s slowdown.
A critical monthly close is due soon, as well as the United States Federal Reserve minutes. This important event is taking place on February 22nd at 19:00 GMT.
Order book activity: large-volume traders play a part
Material Indicators initially flagged the order book activity. They queried how long the phenomenon would last with bulls powerless to make inroads higher.
Do you think support will hold at the notorious bid wall to play the range again or will it spoof and dump?
Remember #TradFi Markets are closed Monday. If you're playing the game with Notorious B.I.D., manage your risk accordingly. pic.twitter.com/ZyZlHTMFWM
— Material Indicators (@MI_Algos) February 19, 2023
A chart of the Binance order book confirmed that significant bid support had moved lower to $23,460, giving the spot price room to go down. Crypto traders are naturally cautious due to the order book activity.
READ MORE: Crypto Trader Bullish on Solana and Litecoin, Sets Sell Target for Bitcoin
Macro weaknesses and RSI divergence: impact on crypto markets
Venturefounder, a contributor to blockchain analytics platform CryptoQuant, warned that external factors such as macro weaknesses could have a bearish impact on crypto markets. He also took the Relative Strength Index (RSI) metric under consideration. This indicator measures how overbought or oversold an asset is at a given price point, giving some idea of potential trend shifts.
#Bitcoin bearish RSI divergence continues…
Almost the exact opposite way of May-July 2021 period.
I think any macro weakness can have #BTC snap back to $19-20k real quick. pic.twitter.com/Z31iXXBL3U
— venturefoundΞr (@venturefounder) February 20, 2023
Federal Reserve minutes on crypto pundits’ radar
An upcoming event of exceptionally high import is the release of the minutes from February’s Federal Open Market Committee (FOMC) meeting at the Fed.
Some analysts expect that Fed Chair Jerome Powell will include talk of a moratorium on the rate hike policy. However, only some are convinced that the FOMC minutes will be positive. Among them is financial market research resource Capital Hungry, which warned that “sneaky hawkish revisions” may be revealed.
Feds sneak in hawkish revisions out of the spotlight (not an active FOMC) with market already adjusted to CPI revisions and Jan report.
PCE data feeds into elevated inflation sentiment.
It would be a chess move by Powell and a great call by me 😁
Dollar Domination.
— Capital Hungry (@Capital_Hungry) February 20, 2023
Conclusion
Bitcoin’s progress in February has been much slower than January’s. Resistance at $25,000 and growing skepticism among traders and investors have contributed to the rally’s slowdown.
Additionally, external factors such as macro weaknesses could immediately have a bearish impact on crypto markets. Finally, the upcoming release of the FOMC minutes at the Fed has put the crypto community on edge, with some predicting “sneaky hawkish revisions.”
Andrey Kunev
Reporter at CoinsPress
Andrey Kunev is a knowledgeable cryptocurrency content creator passionate about the crypto market. With extensive experience in market analysis and investment reporting, Andrey is a valuable asset to the CoinsPress team. As a frequent contributor, he offers insightful and comprehensive coverage of market trends, price fluctuations, and new advancements in cryptocurrency. Whether you're a seasoned investor or just getting started, Andrey's clear and concise writing offers a comprehensive look at the current state of the crypto market and its prospects. Stay up-to-date with CoinsPress's expert analysis and commentary on all things cryptocurrency.
