Inflation

Bitcoin price nears $25K as analysts place bets on CPI impact

Bitcoin lines up a fresh charge at multimonth resistance, but BTC price action already faces calls for a comedown triggered by CPI.

Bitcoin (BTC) eyed key resistance near $25,000 on March 14 as markets awaited key economic data from the United States.

BTC/USD 1-day candle chart (Bitstamp). Source: TradingView

Hopes CPI will bring Bitcoin “consolidation”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD making monthly highs of $24,917 on Bitstamp overnight.

The pair remained buoyant after the impact of multiple U.S. bank closures sent crypto markets skyrocketing.

Now, all eyes were temporarily on the Consumer Price Index (CPI) print for February when it came to short-term BTC price action.

A classic crypto volatility catalyst in itself, last month, CPI showed an unwelcome slowdown in inflation abating; this, in turn, gave rise to fears that the Federal Reserve would keep interest rates higher for longer.

However, risk assets had little time to worry as the banking crisis overshadowed the inflation debate. On the day, expectations already pointed to the Fed abandoning rate hikes altogether — regardless of CPI trends.

“Bitcoin sweeping the highs here as it’s testing range high at $25K,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, told Twitter followers.

“You’d preferably want to see some period of consolidation (CPI day today) before continuation. If markets sweep range high at $25.2K, make a bear. div and fall back, I’d be looking for shorts to $23K.”

BTC/USD annotated chart. Source: Michaël van de Poppe/ Twitter

On-chain monitoring resource Material Indicators pointed to a potential shake-up in order book composition thanks to CPI.

Should the data outpace expectations, bid support could “rug,” it warned, opening up the path for a deeper BTC price correction.

“Asia may continue to eat ask liquidity and clear a path for volatility before the CPI Report,” it commented about moves on the BTC/USD pair on Binance.

“If CPI is hot, I expect support to rug. If it’s cold, and another bank doesn’t go under before lunch, a bigger short squeeze.”

An accompanying chart from co-founder Keith Alan showed $23,600 and $25,000 as the principal areas of bid and ask liquidity, respectively.

BTC/USD order book data (Binance). Source: Keith Alan/ Twitter

Material Indicators added that in order for Bitcoin’s overall rally to have legs, it would need to deliver multiple weekly closes above its 200-week moving average (WMA).

“Need full candles above the 200 WMA to consider a breakout,” it confirmed.

BTC/USD 1-week candle chart (Bitstamp) with 200MA. Source: TradingView

CPI: “Manufactured” or “in some solid shape”?

Lower-than-expected CPI readings would boost the case for the Fed to lay off further rate hikes and loosen financial conditions.

Related: Fed starts ‘stealth QE’ — 5 things to know in Bitcoin this week

For his part, U.S. President Joe Biden last week appeared to have no concerns that inflation was on the right track, even before the banking crisis fully erupted.

In a White House press conference, Biden said he was “optimistic we’re going to get the — the CPI next week. Hopefully, we’ll be in — in some solid shape.“

Among analysts, however, there were suspicions. A surprise drop in CPI would be most beneficial for a Fed currently backed into a corner by recent events, popular trader xTrends implied.

“I believe tomorrows CPI will be manufactured to prevent a market crash, and it will be silently revised weeks later like they did with the last few CPI numbers,” he revealed in part of the Twitter commentary.

A starker warning on macro came from Cathie Wood, CEO of ARK Invest, who issued a grim forecast for the consequences of any further rate hikes.

In a dedicated Twitter thread on March 13, Wood, under whose leadership ARK continues to increase crypto exposure, called for a Fed “pivot” on rates.

“If the Fed continues to focus on lagging indicators like the CPI, and does not pivot in response to the deflationary forces telegraphed by the inverted yield curve, then this crisis will devour more regional banks and further centralize, if not nationalize, the US banking system,” she wrote.

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

$920B is the number to watch now that crypto’s trillion dollar total market cap is gone

The crypto market is taking a walloping, and there are three important reasons why BTC’s $380 billion valuation is a key support for the entire market.

Big round numbers always pique the interest of investors and the $1 trillion total crypto market capitalization is no exception. It’s a level that held for 48 days before collapsing on March 9. After a 16-hour negative 8.6% price movement, the indicator fell to $914 billion, its lowest level since Jan.13.

Total crypto market cap in USD, 1-day. Source: TradingView

Concerns about the stability of the U.S. banking industry, specifically the downfall and subsequent closure of Silvergate Bank (SI) on March 8 and the shut down of Silicon Valley Bank (SVB) on March 10 by The California Department of Financial Protection and Innovation, are among the reasons for breaking below the $1 trillion capitalization support. Silvergate was a critical fiat gateway network for the most important cryptocurrency exchanges and intermediaries.

The California Department of Financial Protection and Innovation did not provide an explanation for SVB Bank’s closure. Nonetheless, it stated that the financial institution will be the first FDIC-insured institution to fail in 2023.

Silicon Valley Bank possessed more than $200 billion in assets and provided financial services to a number of crypto-focused venture firms, including Andreessen Horowitz and Sequoia Capital.

Don’t forget, however, the ongoing efforts of the U.S. Federal Reserve to curb inflation, which include increasing interest rates above 2% in August 2022 and reducing its balance sheet through asset sales. In addition to this, U.S. labor market data released on March 10 revealed the creation of 311,000 jobs in February 2023, supporting the notion that the Fed’s anti-stimulus measures require additional firepower.

The unexpected result of the central bank’s cautious stance is a greater likelihood of a longer and more severe economic downturn. Investors demanded a higher return for two-year treasury notes versus longer-term dated bonds, causing the inverted bond curve to reach its highest level in 40 years.

What is the significance of the $920 billion market capitalization?

A notable bounce occurred as total crypto capitalization reached $920 billion, indicating large buyers around that level, which may appear insignificant at first but is critical for Bitcoin (BTC), the leading cryptocurrency. To begin, one must understand that Bitcoin accounts for roughly half of total crypto capitalization when stablecoins are excluded.

As a result, Bitcoin’s $380 billion market capitalization serves as the foundation for the $920 billion total. Three reasons explain why such a level is critical from a valuation standpoint.

Bitcoin is still a top-20 global tradable asset, valued at over $380 billion, ahead of the giant retailer Walmart (WMT), international payment processor Mastercard (MA), and the highly profitable consumer discretionary Procter & Gamble (PG). It becomes more difficult to attribute failure after such a remarkable accomplishment.

Despite Bitcoin’s 50% decline in 12 months to $19,650, its performance is comparable to that of billion-dollar companies such as Credit Suisse Group (CS) down by 63%, First Republic Bank (FRC) 51%, Warner Bros. (WBD) 43%, and Intel Corporation (INTC) 43%.

Lastly, by maintaining its $380 billion capitalization, it remains the seventh largest global base money when compared to fiat currencies. For example, the Australian Dollar (AUD) has a monetary supply of $378 billion, while the Canadian Dollar (CAD) has a monetary supply of $220 billion. The Indian Rupee, with a monetary base of $500 billion, is the next potential target.

At the moment, the options put/call ratio is stable

Traders can gauge the market’s overall sentiment by measuring whether more activity is going through call (buy) options or put (sell) options. Generally speaking, call options are used for bullish strategies, whereas put options are for bearish ones.

A put-to-call ratio of 0.70 indicates that put option open interest lags behind the more call options and is therefore bullish. In contrast, a 1.40 indicator favors put options, which is a bearish sign.

Related: South Dakota gov vetoes bill excluding crypto from definition of ‘money‘

BTC options volume put-to-call ratio. Source: laevitas.ch

Since March 8th, protective puts have been in greater demand, indicating derivatives traders’ risk aversion. Aside from a brief overshoot on March 9 when the put-to-call ratio jumped above 1.50, nothing was out of the ordinary as the movement coincided with the Bitcoin price falling below $22,000.

The gap favoring the put options risk metric had been narrowing, indicating that even professional traders were finding themselves shorthanded as the crypto market continued to fall to new lows.

More importantly, the Bitcoin options market shows no signs of stress, which is encouraging given the immense pressure from the banking sector and the prospects of a dwindling economy.

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

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

$920B is the number to watch now that crypto’s trillion-dollar total market cap is gone

The crypto market is taking a walloping, and there are three important reasons why BTC’s $380 billion valuation is a crucial support for the entire market.

Big round numbers always pique the interest of investors, and the $1 trillion total crypto market capitalization is no exception. It’s a level that held for 48 days before collapsing on March 9. After a 16-hour negative 8.6% price movement, the indicator fell to $914 billion, its lowest level since Jan.13.

Total crypto market cap in USD, 1-day. Source: TradingView

Concerns about the stability of the United States banking industry are growing. The downfall and closure of Silvergate Bank, and the shutdown of Silicon Valley Bank (SVB) by the California Department of Financial Protection and Innovation are among the reasons for the crypto market dropping below the $1 trillion market capitalization support. Silvergate was a critical fiat gateway network for cryptocurrency exchanges and intermediaries.

The California Department of Financial Protection and Innovation did not explain SVB’s closure. Nonetheless, it stated that the financial institution would be the first FDIC-insured institution to fail in 2023.

Silicon Valley Bank possessed over $200 billion in assets and provided financial services to several crypto-focused venture firms, including Andreessen Horowitz and Sequoia Capital.

Don’t forget the ongoing efforts of the U.S. Federal Reserve to curb inflation, which include increasing interest rates above 2% in August 2022 and reducing its balance sheet through asset sales. In addition to this, U.S. labor market data released on March 10 revealed the creation of 311,000 jobs in February 2023, supporting the notion that the Fed’s anti-stimulus measures require additional firepower.

The unexpected result of the central bank’s cautious stance is a greater likelihood of a longer and more severe economic downturn. Investors demanded a higher return for two-year treasury notes versus longer-term dated bonds, causing the inverted bond curve to reach its highest level in 40 years.

What is the significance of the $920 billion market capitalization?

A notable bounce occurred as total crypto capitalization reached $920 billion, indicating large buyers around that level, which may appear insignificant at first but is critical for Bitcoin (BTC), the leading cryptocurrency. Bitcoin accounts for roughly half the total crypto capitalization when stablecoins are excluded.

As a result, Bitcoin’s $380 billion market capitalization serves as the foundation for the $920 billion total. Three reasons explain why such a level is critical from a valuation standpoint.

Bitcoin is still a top 20 global tradable asset, valued at over $380 billion — ahead of the giant retailer Walmart, international payment processor Mastercard, and the highly profitable consumer discretionary Procter & Gamble. It becomes more difficult to attribute failure after such a remarkable accomplishment.

Despite Bitcoin’s 50% decline in 12 months to $19,650, its performance is comparable to that of billion-dollar companies such as Credit Suisse, down by 63%; First Republic Bank, down 51%; Warner Bros Discovery, down 43%; and Intel Corporation, down 43%.

Lastly, by maintaining its $380 billion capitalization, it remains the seventh largest global base money compared to fiat currencies. For example, the Australian dollar has a monetary supply of $378 billion, while the Canadian dollar has a monetary supply of $220 billion. The Indian rupee, with a monetary base of $500 billion, is the next potential target.

At the moment, the options put/call ratio is stable

Traders can gauge the market’s sentiment by measuring whether more activity is going through call (buy) options or put (sell) options. Generally speaking, call options are used for bullish strategies, whereas put options are for bearish ones.

A put-to-call ratio of 0.70 indicates that put option open interest lags behind the more call options and is bullish. In contrast, a 1.40 indicator favors put options, which is a bearish sign.

Related: South Dakota gov vetoes bill excluding crypto from definition of ‘money‘

BTC options volume put-to-call ratio. Source: laevitas.ch

Since March 8, protective puts have been in greater demand, indicating derivatives traders’ risk aversion. Aside from a brief overshoot on March 9 when the put-to-call ratio jumped above 1.50, nothing was unusual as the movement coincided with the Bitcoin price falling below $22,000.

The gap favoring the put options risk metric had narrowed, indicating that even professional traders were shorthanded as the crypto market fell to new lows.

More importantly, the Bitcoin options market shows no signs of stress, which is encouraging given the immense pressure from the banking sector and the prospects of a dwindling economy.

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

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Fed signals a sharp rate hike in March due to inflation — Here’s how Bitcoin traders can prepare

The U.S. Federal Reserve is set to roll out a fresh interest rate hike on March 22, and options traders could use this risk-averse strategy to generate profits.

Like it or not, for crypto investors, the U.S. Federal Reserve policy on interest rate hikes and high inflation is the single most relevant measure for gauging demand for risk assets. By increasing the cost of capital, the Fed boosts the profitability of fixed-income instruments, but this is detrimental to the stock market, real estate, commodities and cryptocurrencies.

One positive aspect of the Fed’s meetings is that they are scheduled well in advance, so Bitcoin (BTC) traders can prepare for those. Federal Reserve policy decisions historically cause extreme intraday volatility in risk assets, but traders can use derivatives instruments to yield optimal results as the Fed adjusts interest rates.

Another challenge for traders is they face pressure from Bitcoin being highly correlated to equities. For example, the 50-day correlation coefficient versus the S&P 500 futures has been running above 70% since Feb. 7. Although it does not state cause and consequence, it is evident that cryptocurrency investors are waiting for the direction of traditional markets.

It’s also possible that Bitcoin’s low emissions could prove to be a benefit as investors realize that the Fed is running out of options to curb inflation. By raising interest rates even further, it could cause the U.S. government’s debt repayments to spiral out of control and eventually surpass $1 trillion annually. This creates a huge incentive for Bitcoin bulls, but extreme caution is needed by those willing to make trades based on interest rate hikes.

Risk takers could benefit from buying Bitcoin futures contracts to leverage their positions, but they could also be liquidated if a sudden negative price move occurs ahead of the Fed’s decision on March 22. For this reason, pro traders are more likely to opt for options trading strategies such as the skewed iron condor.

A balanced risk approach to using call options

By trading multiple call (buy) options for the same expiry date, traders can achieve gains 3 times higher than the potential loss. This options strategy allows a trader to profit from the upside while limiting losses.

It is important to remember that all options have a set expiry date, so Bitcoin’s price increase must happen during the set period.

Listed below are the expected returns using Bitcoin options for the March 31 expiry, but this methodology can also be applied to different time frames. While the costs will vary, the general efficiency will not be affected.

Profit / Loss estimate. Source: Deribit Position Builder

The call option gives the buyer the right to acquire an asset, but the contract seller receives (potential) negative exposure. The iron condor consists of selling the call and put options at the same expiry price and date.

As shown above, the target profit area is above $23,800, and the worst scenario is a 0.217 BTC (or $5,156 at current prices) if the expiry price on March 31 happens below $23,000.

Related: Bitcoin price enters ‘transitional phase’ according to BTC on-chain analysis

To initiate the trade, the investor must buy 6.2 contracts of the $23,000 put (sell) option. Then, the buyer must sell 2.1 contracts of the $25,000 call option and another 2.2 contracts of the $27,000 call option. Next, the investor should sell 3.5 contracts of the $25,000 put (sell) option combined with 2 contracts of the $27,000 put option.

As a final step, the trader must purchase 3.9 contracts of the $29,000 call option to limit losses above the level.

This strategy yields a gain if Bitcoin trades between $23,800 and $29,000 on March 31. Net profits peak at 0.276 BTC ($6,558 at current prices) between $25,000 and $27,000, but remain above 0.135 BTC ($3,297 at current prices) if Bitcoin trades in the $24,400 and $27,950 range.

The investment required to open this skewed iron condor strategy is the maximum loss, hence 0.217 BTC or $5,156, which will happen if Bitcoin trades below $23,000 on March 31. The benefit of this strategy is the wide profit target area, yielding a better risk-to-reward outcome than leveraged futures trading, especially considering the limited downside.

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

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

It’s not the end of crypto: EU asset manager gives 5 reasons why

Despite Bitcoin failing as an inflation hedge in 2021 and 2022, its limited supply may still attract more attention if inflation remains above central banks’ targets.

The ongoing cryptocurrency winter and massive collapses in the industry do not mean that digital assets like Bitcoin (BTC) are doomed to fail, according to a major European asset manager.

Despite BTC failing to protect investors against rising inflation in 2021 and 2022, Bitcoin’s limited supply may still attract more attention if inflation remains above central banks’ targets, according to investment executives at Paris-based investment manager Amundi.

Amundi chief investment officer Vincent Mortier and macroeconomist Tristan Perrier on March 2 released a thematic paper analyzing the state and the perspectives of the crypto market. The executives argued that Bitcoin has failed to serve as an inflation hedge over the past two years due to “dramatic rises in policy and market interest rates” that pressured “all asset classes.”

According to the paper’s authors, nominal interest rates are likely to stop surging or may even fall if inflation is high, but not rising. Such a situation would potentially lead to a bull market for Bitcoin, the Amundi investment execs said, stating:

“This is a much more favorable environment for an asset whose supply is finite and that has a long duration in essence, as its main attraction is its future potential rather than its current status.”

The analysts also provided five reasons why the recent setbacks in the crypto industry — including collapses of firms such as FTX and Celsius — may not mean the end of cryptocurrencies.

The recent crisis is likely to bring more realistic expectations from the industry and “separate the wheat from the chaff,” the Amundi executives said. They compared crypto to blue-chip tech stocks, which also experienced wild price collapses before starting to thrive. The analysts also noted that the current market downturn still comes in line with Bitcoin’s historical price cycles.

Bitcoin’s price historical chart. Source: CoinGecko

Mortier and Perrier mentioned Ethereum’s successful shift to a proof-of-stake blockchain, highlighting the industry’s capabilities in reducing energy consumption. The executives also noted that the key value propositions of crypto, such as decentralization and immutability of transactions, have not been touched by the crisis.

Another reason is that prominent companies in finance and other industries have not stopped expressing their interest in crypto entirely, with heavyweights such as BlackRock acquiring a stake in Circle in 2022.

Related: France on the verge of passing stringent crypto firm licensing laws

Finally, regulation will likely bring a more positive impact on the industry despite certainly causing temporary price setbacks, the analysts argued. They stressed that many regulators have eventually preferred not to put a blanket ban on crypto after several attempts and that advanced economies now see it as a possibility.

Despite expressing some level of bullishness toward the future of crypto, Amundi’s investment executives still noted that the real economic utility of crypto “still needs to be fully confirmed.” That would need widespread use of public blockchains in the real economy and the associated non-speculative demand, the experts noted.

Ethereum price action and derivatives data confirm bears are currently in control

Investors are unwilling to add long positions, as the Shanghai fork is expected to unlock a significant amount of ETH over a short period.

The price of Ether (ETH) declined 6% between March 2 and 3, followed by tight-range trading near $1,560. Still, analyzing a wider time frame provides no clear trend, as its chart can point to a descending channel or a slightly longer seven-week bullish pattern.

Ether (ETH) price index in USD, 1-day. Source: TradingView

Ether’s recent lack of volatility can be partially explained by the upcoming Shanghai hard fork, an implementation aimed at allowing ETH staking withdrawals. Those participants were each required to lock 32 ETH on the Beacon Chain to support the network consensus protocol.

After a series of delays, typical for changes in the production environment, the Shanghai Capella upgrade — also known as Shapella — is expected for early April, according to Ethereum core developer and project coordinator Tim Beiko. The Goerli testnet upgrade on March 14 will be the final rehearsal for the Shanghai hard fork before it is rolled out on the mainnet.

Recession risks increase, favoring ETH bears

On the macroeconomic front, United States Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee on March 7. Powell stated that interest rates will likely rise higher than anticipated after “the latest economic data have come in stronger than expected.”

Evidence points to the Fed lagging behind the inflation curve, boosting the odds of harder-than-expected interest rate increases and asset sales by the monetary authority. For instance, an inflation “surprise” index from Citigroup rose in February for the first time in more than 12 months.

For risk assets, including cryptocurrencies, a more substantial move by the Fed typically implies a bearish scenario, as investors seek shelter in fixed income and the U.S. dollar. This shift becomes more pronounced in a recessionary environment, which many speculate is either coming or already here.

The regulatory environment is adding additional pressure for cryptocurrency firms, especially after U.S. Press Secretary Karine Jean-Pierre said the White House has noted that the crypto-friendly bank Silvergate had “experienced significant issues” in recent months.

Let’s look at Ether derivatives data to understand if the $1,560 level is likely to become a support or resistance.

ETH derivatives show reduced demand for longs

The annualized three-month futures premium should trade between 5% and 10% in healthy markets to cover costs and associated risks. However, when the contract trades at a discount (known as “backwardation”) versus traditional spot markets, it shows a lack of confidence from traders and is deemed a bearish indicator.

Ether 3-month futures annualized premium. Source: Laevitas

The chart above shows that derivatives traders became slightly uncomfortable as the Ether futures premium (on average) moved to 3.1% on March 7, down from 4.9% one week prior. More importantly, the indicator became more distant from the 5% neutral-to-bullish mark.

Still, the declining demand for leverage longs (bulls) does not necessarily translate to an expectation of adverse price action. Consequently, traders should analyze Ether’s options markets to understand how whales and market makers are pricing the odds of future price movements.

The 25% delta skew is a telling sign th market makers and arbitrage desks are overcharging for upside or downside protection.

In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 10%. On the other hand, bullish markets tend to drive the skew metric below -10%, meaning the bearish put options are in less demand.

Ether 30-day options 25% delta skew: Source: Laevitas

The delta skew moved above the bearish 10% threshold on March 4, signaling stress from professional traders. A brief improvement happened on March 7, although the metric continues to flirt with bearish expectations as options traders place higher costs on protective put options.

Investors basing their decisions on fundamentals will likely look to the first couple of weeks following the Shanghai upgrade to measure the potential impact of the ETH unlock. Ultimately, options and futures markets signal that pro traders are less inclined to add long positions, giving higher odds for $1,560 becoming a resistance level in the coming weeks.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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

Bitcoin traders eye $19K BTC price bottom, warn of ‘hot’ February CPI

It could be a testing few weeks for Bitcoin and risk assets, market commentators say, with Fed Chair Jerome Powell due to kick off the triggers on March 8.

Bitcoin (BTC) failed to react at the March 6 Wall Street open as consensus formed around a potential violation of $20,000.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

$19,000 BTC price is “breakdown target”

Data from Cointelegraph Markets Pro and TradingView tracked a limp BTC/USD as it clung to $22,400 at the time of writing.

Motionless throughout the weekend, the pair offered few trading opportunities as concerns built up over the impact of forthcoming macroeconomic data from the United States.

Specifically, the February print of the Consumer Price Index (CPI), due March 14, is expected to be “hot,” or above expectations, analyst Venturefounder said.

“New Bitcoin higher low, and the bearish RSI divergence continues,” he wrote in a Twitter update on the day.

“With a hot CPI number coming and FOMC meeting later this month, March could be a bad month for risk-on assets including BTC. A breakdown from this level would target $19k BTC.”

An accompanying chart laid out the potential path to below $20,000 and also highlighted the bearish divergence in Bitcoin’s relative strength index (RSI), formed when the metric’s trajectory runs in the opposite direction to price — downward versus upward, respectively.

BTC/USD annotated chart. Source: Venturefounder/Twitter

CPI prints tend to spark short-term volatility across risk assets, this nonetheless often short-lived, with the Bitcoin spot price then returning to previous levels.

Continuing, popular trader Crypto Ed likewise voiced belief in $19,000 marking the next local BTC price floor.

“Biggest bulltrap ever, but the bottom is in. Enjoy the coming months and don’t get fooled on the lower TF’s!” part of Twitter commentary read.

U.S. dollar lines up key test

Turning to macro markets, trading resource Game of Trades drew attention to what it called “heavy resistance” on U.S. dollar strength.

Related: BTC price ‘in the chop zone’ — 5 things to know in Bitcoin this week

Traditionally inversely correlated with Bitcoin, the U.S. Dollar Index (DXY) now faced a key trend line retest.

“DXY is closing in on a heavy resistance zone after reclaiming the macro uptrend line,” Game of Trades wrote.

“Reaction here will be pivotal for all markets.”

U.S. Dollar Index (DXY) annotated chart. Source: Game of Trades/Twitter

Popular trader Crypto Chase, meanwhile, saw a tight trading range in place on the S&P 500, mimicking the lack of momentum on Bitcoin.

Attention was already on the March 7 appearance before the U.S. Congress by Jerome Powell, chair of the Federal Reserve, for cues on the monetary conditions going forward.

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

Bitcoin traders eye $19K BTC price bottom, warn of ‘hot’ February CPI

It could be a testing few weeks for Bitcoin and risk assets, market commentators say, with Fed Chair Jerome Powell due to kick off the triggers on March 8.

Bitcoin (BTC) failed to react at the March 6 Wall Street open as consensus formed around a potential violation of $20,000.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

$19,000 BTC price is “breakdown target”

Data from Cointelegraph Markets Pro and TradingView tracked a limp BTC/USD as it clung to $22,400 at the time of writing.

Motionless throughout the weekend, the pair offered few trading opportunities as concerns built up over the impact of forthcoming macroeconomic data from the United States.

Specifically, the February print of the Consumer Price Index (CPI), due March 14, is expected to be “hot,” or above expectations, analyst Venturefounder said.

“New Bitcoin higher low, and the bearish RSI divergence continues,” he wrote in a Twitter update on the day.

“With a hot CPI number coming and FOMC meeting later this month, March could be a bad month for risk-on assets including BTC. A breakdown from this level would target $19k BTC.”

An accompanying chart laid out the potential path to below $20,000 and also highlighted the bearish divergence in Bitcoin’s relative strength index (RSI), formed when the metric’s trajectory runs in the opposite direction to price — downward versus upward, respectively.

BTC/USD annotated chart. Source: Venturefounder/ Twitter

CPI prints tend to spark short-term volatility across risk assets, this nonetheless often short lived, with the Bitcoin spot price then returning to previous levels.

Continuing, popular trader Crypto Ed likewise voiced belief in $19,000 marking the next local BTC price floor.

“Biggest bulltrap ever, but the bottom is in. Enjoy the coming months and don’t get fooled on the lower TF’s!” part of Twitter commentary read.

U.S. dollar lines up key test

Turning to macro markets, trading resource Game of Trades drew attention to what it called “heavy resistance” on U.S. dollar strength.

Related: BTC price ‘in the chop zone’ — 5 things to know in Bitcoin this week

Traditionally inversely correlated with Bitcoin, the U.S. dollar index (DXY) now faced a key trend line retest.

“DXY is closing in on a heavy resistance zone after reclaiming the macro uptrend line,” Game of Trades wrote.

“Reaction here will be pivotal for all markets.”

U.S. dollar index (DXY) annotated chart. Source: Game of Trades/ Twitter

Popular trader Crypto Chase meanwhile saw a tight trading range in place on the S&P 500, mimicking the lack of momentum on Bitcoin.

Attention was already on the March 7 appearance before the U.S. Congress by Jerome Powell, Chair of the Federal Reserve, for cues on the monetary conditions going forward.

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

BTC price ‘in the chop zone’ — 5 things to know in Bitcoin this week

BTC price keeps traders and analysts in the dark as a week of macro triggers dawns while Bitcoin network fundamentals head toward new all-time highs.

Bitcoin (BTC) starts a new week with consolidation in the air amid some of the least volatile conditions ever.

Despite losing 5% in an hour last week, Bitcoin’s subsequent lack of volatility is on every trader’s mind.

The question is whether that will change in the coming days.

There are plenty of potential catalysts, from macroeconomic data to exchange setups and more, but which will win out — and in which direction it will send BTC price — remains to be seen.

Behind the scenes, it remains business as usual for Bitcoin network fundamentals, with miners preserving their newfound buoyancy and ready for new all-time highs in difficulty.

Cointelegraph takes a look at these major market-moving factors and summarizes opinions as to how they might shape BTC price action this week.

Bitcoin price stays paralyzed after weekly close

While anything can and does happen in Bitcoin, the weekend was marked by one word only when it comes to BTC price action — boring.

After flash volatility on March 3 due to a combination of  Silvergate Bank concerns and exchange margin calls, BTC/USD has remained eerily quiet.

Data from Cointelegraph Markets Pro and TradingView proves the point, with spot price moving within a barely perceptible range ever since.

Bulls nonetheless failed to recover much of the lost ground, leading Bitcoin to finish the week down around 5.1% on Bitstamp.

BTC/USD 1-week candle chart (Bitstamp). Source: TradingView

For Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, there is still reason to believe that the market will soon draw a line under the current short-term trend.

“Boring price action on Bitcoin since the correction, but still acting in support here,” he told Twitter followers on March 6.

“Indices bounced already and seem to continue to do so. Might have another sweep of the lows and then reverse up, losing $21.5K = trouble time.”

BTC/USD annotated chart. Source: Michaël van de Poppe/ Twitter

A further post eyed a potential bounce target for $23,000 should the bulls reclaim some strength.

“I just want to see some price movement today if I am honest,” popular trader Crypto Tony continued.

“I remain short as of few days ago with my stop loss at $23,200 to remain transparent. I would like to see a move up to $22,800 before any downside.”

BTC/USD annotated chart. Source: Crypto Tony/ Twitter

Fellow trading account Daan Crypto Trades noted that BTC/USD had already closed the modest CME futures gap from the weekend.

$22,000 or $22,650 needs to be crossed for Bitcoin to provide “clear direction,” he acknowledged.

For trading resource Skew, the weekly open at around $22,300 should function as a “pivot” for near-term price performance.

“Probable that this weekly open price will trade as a pivot for 1D breakdown towards weekly demand ($19K) else HL with confirmation above $23K,” a tweet about the daily chart stated.

“We’re in the chop zone currently. (weakness or strength in coming day will be leading of momentum/direction).”

BTC/USD annotated chart. Source: Skew/ Twitter

All eyes on Fed’s Powell as macro signals return

The macroeconomic scene begins to heat up in the coming days after a cool week, with Jerome Powell, chair of the United States Federal Reserve, due for two rounds of testimony.

A classic source of market volatility, Powell’s words to the U.S. Congress’ House Financial Services Committee could flip the overall mood — at least briefly — depending on his language regarding future economic policy.

At stake, in particular, are interest rates, with the next decision on a benchmark Fed rate hike still two weeks away.

“Expecting Bitcoin volatility to pick up during midweek next week during Powell’s testimony,” trader, analyst and angel investor Crypto Santa confirmed in part of weekend Twitter posts.

Popular analytics account Tedtalksmacro also flagged nonfarm payroll data and a statement and press conference from the Bank of Japan toward the end of the week as crunch points.

As Cointelegraph reported, the liquidity decisions of central banks outside the U.S. are increasingly considered an important influence on Bitcoin markets.

“US dollar liquidity is on the rise so far in March (~+100bn inflows),” Tedtalksmacro added.

“Liquidity leads, price lags!”

According to CME Group’s FedWatch Tool, the odds of the Fed’s March rate hike coming in at 50 basis points versus the previous 25 basis points stood at 28.6% as of March 6.

Fed target rate probabilities chart. Source: CME Group

Fundamentals set for yet more all-time highs

Another adjustment, another all-time high — when it comes to Bitcoin difficulty, the only way is up.

The latest data from BTC.com confirms that later this week, the difficulty will inch 1% higher to new record levels of 43.5 trillion.

This is no mean feat, coming at a time when BTC/USD has been consolidating for several weeks and miner profit margins continue to be slender.

Nonetheless, hash rate shows that commitment from mining participants is also in a firm uptrend. Raw data estimates from MiningPoolStats put the hash rate at 320 exahashes per second as of March 6.

On-chain analytics firm Glassnode meanwhile shared profitability statistics for Bitcoin miners, this having recovered markedly versus the second half of 2022.

Additional data shows miners have yet to begin a firm accumulation trend at current prices, despite being 40% up versus the start of the year.

On a rolling 30-day basis, miners’ BTC balances were lower in March.

Funding rates give cause for optimism

On derivatives markets, analysts are eyeing a potential rerun of conditions that sent BTC/USD to its February highs above $25,000.

This is principally thanks to funding rates, which have flashed negative twice since last week’s 5% BTC price dip.

“Bitcoin Funding Rate doing similar to Ethereum now, turned negative a couple times after the nuke a few days ago,” trading suite DecenTrader noted on March 6.

“Prior to this, Funding Rates were last negative before the pump to $25k on the 12th of Feb.”

Bitcoin weighted average funding rate chart. Source: Decentrader/ Twitter

In the way, however, the ratio of longs to shorts remains “stubborn,” DecenTrader added, with two longs for every short “typically higher than usual for Bitcoin.”

Bitcoin long/ short ratio chart. Source: Decentrader/ Twitter

Cointelegraph has published a guide that fully explains funding rates and how they work.

Sentiment index hits 6-week lows

In a more pronounced turnaround than price action would suggest, crypto market sentiment is increasingly shedding any trace of bullishness this month.

Related: EOS, STX, IMX and MKR show bullish signs as Bitcoin searches for direction

According to the Crypto Fear & Greed Index, the mood on the ground is now “neutral,” while the return of “fear” is getting ever nearer.

At 47/100, the Index hit its lowest level since mid-January over the weekend.

As Cointelegraph reported, research is even querying the extent of crypto’s newfound cold feet, arguing that the market’s reaction to the Silvergate episode was out of proportion.

“Traders are more of a mixed bag when it comes to shorting or longing the markets right now,” research firm Santiment, which published the findings, stated.

Santiment added that sentiment might not necessarily form an accurate reflection of market strength given the aforementioned state of funding rates.

“So there could be something funky going on with an inflated amount of negative comments, even though perpetual contract funding rates on exchanges aren’t necessarily matching the sentiment,” it concluded.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

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

Bitcoin price would retest $25K without Silvergate saga — analysis

Strong U.S. equities and a floundering dollar normally serve to boost BTC price action — but Silvergate is the elephant in the room.

Bitcoin (BTC) stayed lower into the weekend as ongoing problems at Silvergate bank pressured markets.

BTC/USD 1-day candle chart (Bitstamp). Source: TradingView

Bad news holds Bitcoin back

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD lingering at around $22,350 on March 4.

The pair had managed to avoid further losses after the initial shock around Silvergate wiped 5% off the spot price in minutes. 

With United States equities delivering a strong finish to the week, Bitcoin and altcoins were unable to capitalize on what traders argued would normally be an opportunity for gains.

“Most global equity indices have now printed higher lows,” popular commentator Tedtalksmacro wrote in part of an update overnight.

“If it weren’t for the silvergate fears, BTC would be primed to breach the highs above 25k next week.“

S&P 500 1-hour candle chart. Source: TradingView

Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, hoped that a comeback for Bitcoin could still hit.

“Bitcoin dropped from $23,800 to $22,300, while the Nasdaq and S&P were making strong bounces. Matter of time until Bitcoin catches up,” he told Twitter followers.

A failed attempt by the U.S. dollar to head higher formed another potential tailwind for crypto, but this is still untapped as the week’s trading concluded.

Silvergate sags to all-time low

Silvergate halted its institutional fiat settlement arm, the Silvergate Exchange Network, on March 3 as concerns about bankruptcy multiplied.

Related: 3 BTC price hurdles Bitcoin bulls are failing to clear in 2023

As some proposed alternatives for exchanges, others regretted the bank’s downfall and hoped that the situation would improve.

Bitcoin advocate Nic Carter said that he had “always respected Silvergate for being unapologetically pro crypto when virtually no one else was.“

“Sad to see their current predicament, hope they make it through the other side,” he added.

The stock of Silvergate Capital closed the week at record lows, at one point trading below $5. At its peak during Bitcoin’s 2021 all-time highs, it traded above $150.

Silvergate Capital (SI) 1-week candle chart. Source: TradingView

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