Bitcoin price is up today thanks to favorable macroeconomic data and some conspicuous whale moves — how long might the BTC gains continue?
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Bitcoin price is up on Feb. 16 as a combination of factors sends (BTC) to six-month highs.
Data from Cointelegraph Markets Pro and TradingView shows BTC/USD hit $24,895 on the day — its best since mid-August 2022.
Bitcoin bulls are feeling the gains this week as the largest cryptocurrency puts in an impressive return to form after weeks of consolidation.
Macroeconomic tailwinds, principally from the United States, have come hand in hand with improving sentiment across risk assets, giving optimists the edge.
BTC/USD gained almost 10% on Feb. 15 and another 2% on Feb. 16, with altcoins following suit.
BTC/USD daily returns chart (screenshot). Source: Coinglass
The gains come in a key week of U.S. macroeconomic data prints, these so far feeding the narrative that inflation is ebbing — an important prerequisite for risk asset performance.
Ahead of the Wall Street open, Cointelegraph takes a look at what is moving crypto markets today.
U.S. macro data emboldens Bitcoin bulls
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It began with a Consumer Price Index (CPI) that mostly conformed to expectations despite a reshuffle in its calculation.
CPI is a classic volatility catalyst for stocks and crypto, and despite a slow initial reaction, the reaction this time ultimately proved no different.
Retail sales and manufacturing numbers then further boosted the outlook, with investors providing more “dry powder” for risk trades and sending crypto higher.
With even more data still to come, the mood is thus all about whether the good news will continue — and whether it can sustain the latest innings of Bitcoin’s blistering 2023 comeback.
“After a stampede for 10%, BTC bulls ran into a wall,” Keith Alan, co-founder of monitoring resource Material Indicators, summarized.
“Clean rejection on the first test of key Weekly MAs. A hot Jobless Report could strengthen another attempt. Looking for a partial retrace to deliver another setup to scalp the volatility around the U.S. economic reports.”
Alan referred to the 50-week and 200-week moving averages (MAs), the latter providing clean resistance since the middle of last year.
Should U.S. unemployment data come in above expectations, it could send a signal to the market that the Fed’s restrictive economic policy is working and that a turnaround could come sooner rather than later.
The Fed lowering interest rates and boosting liquidity would make risk asset trades more appealing.
BTC/USD 1-week candle chart (Bitstamp) with 50, 200MA. Source: TradingView
BTC price vies with U.S. dollar strength
In a curious, if temporary, state of affairs, Bitcoin is climbing in tandem with the U.S. dollar.
Traditionally negatively correlated, the two assets are both benefiting from the current climate — but for different reasons.
As explained by Dr. Jeff Ross, founder and CEO of Vailshire Capital Management, short-term treasury yields have moved higher, resulting in capital flowing into the U.S.
“BTC going higher because of increasing worldwide liquidity,” he added, referencing the aforementioned liquidity changes.
U.S. dollar index (DXY) 1-day candle chart. Source: TradingView
Others are nervous, however, querying how long the out-of-character status quo might continue.
“Markets are starting to bifurcate, with Tradfi & $DXY not supporting the move yesterday,” trader Mark Cullen warned in part of a tweet on Feb. 16.
“I think the highs are going to get swept, but the Q is, if this move wipes out both sides 1st?”
BTC/USD annotated chart. Source: Mark Cullen/ Twitter
Bitcoin whales guide support and resistance higher
As Bitcoin began to rise sharply once more, opportunities to influence the rally were not lost on some of its biggest traders.
Related: Bitcoin eyeing ‘next big move’ which could see $19K retest — analyst
Whales are constantly in touch with order book activity, and current conditions have seen bid and ask liquidity move up and down the order book — taking spot price with it.
“Expecting rejection at $25k and a dump to clear the way for volatility around the 8:30am ET Jobless Report, but they just laddered asks up to $28k,” a tweet explained on the day.
“If they clear $25k they can exploit the upside illiquidity fast. If you can identify the game, you can mitigate risk.”
An accompanying screenshot of the Binance BTC/USD order book showed $25,000 strengthening overnight, with crucial support also inching higher to $21,600.
BTC/USD order book chart (Binance). Source: Material Indicators/ Twitter
“Corrections are relatively short-lived in an upwards trending market,” Cointelegraph contributor Michaël van de Poppe meanwhile argued.
“Higher timeframe levels get one test and then markets start to shoot upwards, as people over short the correction. Breaking $25K and we’ll continue towards $30-35K for Bitcoin.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Source: cointelegraph.com
