BTC whale population shrinks to early 2020 levels – 5 things you need to know in Bitcoin this week

Bitcoin (BTC) continues to push for a bullish end to February as the monthly close ushers in another week-long price action.

The largest cryptocurrency appears poised to maintain its gains as it closes out the second month of 2023 – keeping the bulls’ hopes alive in the process.

Can the good times continue? The week ahead could mark decision time for a key area of ​​BTC price action around $25,000.

Analysts are looking to a breakout to $30,000 if support can become more permanent, while concerns remain that a return to the resistance gained in January is still on the agenda.

Amid a quiet week for macroeconomic data, any catalysts to whether BTC/USD goes up or down may come from Bitcoin itself.

One thing is certain, on-chain data shows: Long-term Bitcoin hodlers are not in the mood to sell just yet, and at current prices, they continue to add massively to their BTC exposure.

Cointelegraph takes a look at some of the key factors to consider when it comes to what Bitcoin could do in the week ahead.

Bitcoin’s monthly close precludes March’s trend confrontation

It looked like a touch-and-go over the weekend, but Bitcoin managed to avoid a major retracement and bounced back into the new week.

A weekly close of around $23,500 was music to the ears of those eager to see a bullish rebound sooner rather than later.

“BTC has managed to break back above the ~$23400 level, which is the Range High of the macro Monthly Range,” popular trader and analyst Rekt Capital explained.

“This is what BTC needs to keep doing for a bullish bias as February nears its end. The upcoming month-end close will be very interesting.”

BTC/USD annotated chart. Source: Rekt Capital/Twitter

At current levels, BTC/USD is up about 1.25% in February 2023 – modest by historical standards, but still notable in maintaining the gains for the year.

For Rekt Capital, March marks the true make-or-break month for BTC/USD as it approaches a long-term trendline, a break from which would mean a complete trend reversal.

“February is coming to an end and indeed not too much excitement for BTC as has historically been the case for a pre-breakout Monthly Candle,” he continued.

“Given that the Macro Downtrend is a sloping trendline, the breakout price for BTC will be slightly lower at ~$24500 in March.”

BTC/USD annotated chart. Source: Rekt Capital/Twitter

Another message repeated $25,000 as the level to break to “confirm” a macro uptrend.

Fellow trader Crypto Chase was more categorical about short-term price action. In an overnight tweet, he also marked $25,000 as the line in the sand.

“Perfect 22.7 tag and bounce. But weekend move.. I wouldn’t be surprised if there was another test of the 0.618 or a third run,” he said. noticed about the lows of the weekend.

“At that point it’s make or break for me. Hold on and we can still see 25K+ liq, lose and then 20K.

Trading source Stockmoney Lizards, meanwhile, described a “short-term bullish reversal” for both the price and the relative strength index (RSI) on the 4-hour chart as the weekend drew to a close.

The macro focus shifted to central bank liquidity

In a refreshing change from the previous two weeks, releases of US macroeconomic data will be more subdued in early March.

However, as Cointelegraph reported, analysts are increasingly looking at releases from Asian counterparts as a potential BTC price influencer.

Liquidity injections from central banks – unlike the Federal Reserve – remain an important topic.

“Global Liquidity – Expected to Rise in 2023, But Recently Declined,” popular commentator Tedtalksmacro tweeted on the day.

“- China injected ~$450 billion into money markets in December + January – US liquidity has remained flat, government liquidity has recently surpassed the Fed. Markets are a product of liquidity * risk appetite.”

Macro liquidity comparison table. Source: Ted Talk Macro/Twitter

Tedtalksmacro nevertheless highlighted a possible countertrend in the form of Japan’s central bank, the Bank of Japan (BoJ), which he believes may yet resort to financial tightening to curb inflation.

“Last Friday, Japan’s core inflation hit its highest level since 1981 –> fueled speculation that the BOJ will need to tighten after years of extremely accommodative monetary policy,” he said. noted.

He compares the performance of US macro assets to cryptocurrency according to the January consumer price index (CPI) data print added that crypto assets remained “stubborn” despite others beginning to rise higher.

Macro asset comparison table. Source: Ted Talk Macro/Twitter

Analysis platform Mosaic Asset focused on the potential for the Fed to raise benchmark interest rates more than expected at the March meeting.

“With no signs of the economy slowing and yet another inflation report that came out hotter than expected last week…that increases pressure on the Federal Reserve to keep rate hikes going faster and longer than markets expect,” it wrote in the latest edition of its updates series, “The Market Mosaic”, on February 26.

“That is reflected in the probabilities of the size of the next rate hike, where implicit market estimates currently point to a 0.25% increase. But views are quickly shifting to the 0.50% opportunity, with more on the way as rates stay high for longer.”

According to CME Group’s FedWatch Tool, the probability of an increase of 0.5% instead of February’s 0.25% is currently 27.7%.

Graph of probability percentages from the Fed. Source: CME group

Sellers see first week of net losses in 2023

Although Bitcoin is up more than 40% since the start of the year, the road to recovery remains fragile for the average hodler.

That is the conclusion of the latest data from research firm Santiment, which shows that last week’s mixed BTC price action still managed to produce net realized losses among sellers.

Ether (ETH) saw the same phenomenon play out, marking the first week in 2023 where sellers lost.

“Bitcoin & Ethereum Both Have More Traders Selling at a Loss Than Profit This Week, First Week So Far in 2023,” Santiment noticed.

“Historically, if the mob is more likely to leave their positions at a loss, bottoms are more likely to form.”

Bitcoin, Ethereum realized losses annotated chart. Source: Santiment/Twitter

Sellers’ bad luck contrasts with the strategy still firmly in place for long-term holders, who continue to increase their BTC holdings.

According to on-chain analytics company Glassnode, hodlers’ net position change reached a new four-month high this weekend, reflecting the rate at which accumulation is occurring.

Bitcoin hodler net position change table. Source: Glassnode/Twitter

In addition, the percentage of BTC supply that has been dormant for at least five years is now higher than ever before at 28.24%.

Bitcoin % supply last active 5+ years ago chart. Source: Glassnode/Twitter

Bitcoin earnings hit 8-month high

A broadly similar situation is currently seen among Bitcoin miners.

Here, Glassnode’s data shows that miners are holding more BTC than they are selling on a 30-day rolling basis, but current prices keep the trend precarious.

While it doesn’t take much price reduction to return to net sales, current conditions remain much healthier than those of previous months.

Bitcoin miner net position change table. Source: Glassnode

A silver lining comes in the form of miner earnings, which, while modest, are still the highest in eight months.

Income chart for Bitcoin miners. Source: Glassnode/Twitter

Income was helped by ordinals fees, which passed the $1 million mark in February.

Despite ordinal numbers resulting in a “fuller mempool” for Bitcoin, research noted just last week, miners managed to clear it, Glassnode shows.

Bitcoin mempool chart. Source: Glassnode

For Bitcoin whales, it’s early 2020

They may be responsible for some interesting events in the exchange’s order books, but Bitcoin’s whale numbers are actually declining.

Related: Bitcoin May Just Take 4 Weeks To Reach $30,000 As Major Monthly Close Looming

With price action still well over 65% below all-time highs, the biggest Bitcoin investors have not yet decided that now is the time to return to the market.

According to Glassnode, the number of whales is now at its lowest in three years – just 1,663 unique entities now control 1,000 BTC or more. Three years ago, in February 2020, Bitcoin was trading for less than $10,000.

Glassnode defines a unique entity as “a cluster of addresses managed by the same network entity”.

At their peak in February 2021, there were 2,161 such whale entities.

Bitcoin whales chart. Source: Glassnode

“Clusters” of whale transaction activity can nonetheless provide insight into support and resistance, even with depleted whale numbers.

As monitoring source Whalemap points out, $23,000 remains a major price focus thanks to that whale factor this month.

The views, thoughts and opinions expressed here are those of the authors only and do not necessarily reflect or represent the views and opinions of Cointelegraph.






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