- Bitcoin price has consolidated below the $52,768 roadblock for almost a week amid buyer momentum exhaustion.
- BTC could drop 10% to the most critical Fibonacci level, 61.8% at $47,445, a formidable blockade between January 8 -12.
- Invalidation of the bearish thesis will occur if the price records a new local top above the $52,816 range high.
Bitcoin (BTC) price is showing weakness as the US market steps into a three-day holiday remembering some of the country’s founding fathers. Low trading volumes could leave markets volatile and susceptible to a big shift.
Also Read: Bitcoin price bullish outlook inspires IntoTheBlock’s 85% forecast of BTC at a new ATH by August
Bitcoin market lull as US commemorates Presidents’ Day
Presidents’ Day, which celebrates first President George Washington’s birthday, gives many Americans the day off on February 19. He is remarked upon as the first leader of a new republic — not a tyrant.
The celebration has become a consumerism bonanza with certain states making it a public holiday. The actual birthday is on February 22, but Congress voted to move the holiday to Monday. In doing so, lawmakers noted clear benefits to the economy, including enhanced retail sales and travel on three-day weekends.
The holiday colloquially known as Presidents’ Day officially celebrates only George Washington’s birthday. The story of how it became a three-day weekend is steeped in differing calendars, inconsistent punctuation, labor issues — and, of course, politics.https://t.co/RQxztUZesg
— The New York Times (@nytimes) February 19, 2024
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
Bitcoin price outlook amid Presidents’ Day lull
After a week of consolidation, Bitcoin price is likely to drop, as markets tend not to wait so long. The Relative Strength Index (RSI) at 78 also shows BTC is already overbought. This status often precipitates a pullback.
In addition, Bitcoin price’s current Spent Output Profit Ratio (SOPR) indicates a possible correction. This is because it has increased above 1 as a 30-day Simple Moving Average (SMA). For the layperson, this ratio suggests that BTC holders who are sitting on unrealized profits at current Bitcoin prices may soon cash in on their gains.
With the possibility of a correction as suggested by the RSI and the SOPR indicators, investors should not succumb to the fear of missing out (FOMO) after a striking surge in Bitcoin price. Instead, they should consider waiting for the SOPR rate to fall below 1 before they can enter the market.
If sellers pull the trigger, Bitcoin price could make a 5% fall to the 78.6% Fibonacci level, or in a dire case, retrace the 61.8% Fibonacci level of $47,445, which barred BTC upside potential between January 8 and 12.
The Moving Average Convergence Divergence (MACD) is also showing fading histogram bars, suggesting a waning bullish cycle.
BTC/USDT 1-day chart
On the other hand, if the bulls fasten their grip on BTC, Bitcoin price could extend north, shattering the $52,768 roadblock to record a new local top. A higher high above this level would invalidate the bearish thesis, bringing $55,000 into focus. In a highly bullish case, the gains could extrapolate to the $60,000 psychological level, 15% above current levels.
Also Read: Week Ahead: AI Coins take center stage ahead of Nvidia earnings
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