Bitcoin bulls weakens at the end of the week 📊

12:03 PM February 3, 2023

Despite a great session on Wall Street yesterday, fueled by the Meta Platforms' biggest rise in a decade and the overtones of the Fed decision and Powell's speech, which hinted at a global disinflationary trend, cryptocurrencies failed to sustain gains.

  • Bitcoin once again fell below $24,000 and is trading near $23,500. After the session overseas, weak results were presented by Apple, Amazon and Alphabet - potentially indicating lower opening markets and risk aversion at the end of the week, which could affect the price of Bitcoin;
  • A report by The Wall Street Journal indicated that more than 85% of Tether Holdings is controlled by a narrow group of individuals with no experience in finance on such a massive scale, and the reserves of the company issuing the largest stablecoin only slightly exceed the value of all USDT tokens;
  • Speculation is growing about a potential lifting of China's cryptocurrency ban, following reports by Sia Finance according to which former senior central bank official Huang Yiping called on regulators to revisit the ban in the face of lost opportunity for tokenization and blockchain technology in the long term;
  • On the contrary, in the United States, a complete ban on cryptocurrencies 'on the Chinese model' was called for by Charlie Munger, known for his joint management of Berkshire Hathaway with Buffet. 

Bitcoin's price, annualized funding rate and rolling three-month basis (Glassnode)

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The financing costs paid (a premium is paid by 'bulls' when perpetual futures prices are above the spot BTC price) by futures traders to maintain long positions are the highest since December 2021, indicating, quite a lot of expectations of further price increases. The indicator by contrarian speculators could be interpreted as a selling cue as bitcoin failed to break through $24,000 on a sustained basis and the performance of mega-techs disappointed Wall Street yesterday, entitling indexes to open lower at the end of the week. A possible market correction could cause prevailing bullish speculators to close cost-generating 'bullish bets' en masse. Source: Glassnode

Bitcoin, H4 interval.  Although weakness is not a foregone conclusion in view of the correlation with the NASDAQ (gold chart) which may fall victim today to weaker results from major tech companies the BTC price may soon test the SMA50 (blue) and SMA100 (black) average, this would mean a correction towards $22,000 where the 23.6 Fibonacci retracement of the upward wave started in November 2022 is located. The RSI indicator has approached a neutral level since mid-January noting 'lower and lower highs,' potentially indicating exhausted bullish momentum. Source: xStation5


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