Specialist RBC Crypto analyzed the situation on the market and assessed the prospects for the movement of the bitcoin rate for the next seven days.
“There will be a correction in all markets”
Financial Analyst BitRiver Vladislav Antonov
Bitcoin got off to a good start to the new week, while a run from risky assets forced buyers to start taking profits on long positions in order to once again take a wait-and-see position. In five trading days from February 20 to 25, the BTC/USDt pair fell by 4.93% to $23,076. The weekly low was recorded at $22,841.
On Monday (February 20), Bitcoin rose to $25,121, taking advantage of low volumes on President’s Day and closed exchanges in the US. Growth took place on volume, but buyers failed to maintain the height. I had to retreat to $24,842.
On Tuesday (February 22), the pressure on bitcoin intensified against the backdrop of an accelerating fall in the futures for the S&P 500 index. In the US session, the S&P 500 index fell by 2%. There were worries on the market about the future actions of the US Federal Reserve and increased risks of a stock market collapse due to a possible rate hike longer than investors expected.
An additional negative factor for the crypto market was the quarterly report of the Coinbase cryptocurrency exchange. In 4 sq. In 2022, the company made a loss of $557 million ($2.46 per share) compared to a profit of $840 million ($3.32 per share) a year earlier. The report says that revenue was reduced by 75% due to falling trading volumes amid a series of bankruptcies and scandals in the crypto industry.
On Thursday (February 23), the BTC/USDt pair fell to $23,940. The price fell to $23,608. The decline in quotes was facilitated by the fall of the S&P 500 index and the growth of the dollar, which reacted to rumors that on Friday the PCE price index (core consumer inflation) will show strong data. Market participants decided not to wait to sell risky assets before the publication of the personal consumption price index, which is an important indicator of inflation for the Federal Reserve System (Fed).
The report was released on Friday (February 24) at 16:30 Moscow time. US inflation, as measured by the Personal Consumption Price Index (PCE), rose to 5.4% year on year in January from 5.3% in December. The value turned out to be higher than the forecast of 4.9%. The annual core PCE price index rose to 4.7% from 4.6% in the same period, compared with an forecast of 4.3%. On a monthly basis, PCE core inflation and PCE inflation rose 0.6%.
The upbeat PCE inflation data added to the Fed’s hawkish fears, as well as boosting US Treasury yields, putting heavy pressure on US stock markets. The DXY index rose to 105.26 points. The S&P 500 index fell 1.08%, the Nasdaq index fell 1.68%. The bitcoin rate has fallen to $22,841.
According to the latest data from CME Group, the probability of a rate hike by 25 bp to 5% per annum at the meeting on March 22 is 73% against 73% a day earlier. It turns out that rate futures did not react to US statistics, believing that the Fed would not increase the rate increase step. In addition, important reports will be released before the meeting (March 22):
- On March 10, a report on the labor market in the US will be released. It is important for the US Federal Reserve, therefore it has a strong influence on all risky assets;
- On March 14, the US inflation report will be released. Data is more important than labor market data. The US Federal Reserve is fighting inflation, so before the meeting of the US Central Bank, consumer prices are the focus of all traders and investors.
The BTC/USDt pair is trading at $23,000. American statistics have spoiled the position of buyers. Now you need to watch the support of $22,250 – this is the level at which the price is still allowed to rise above $25,250. It will be very interesting to see at what level the week will end. It is unlikely that buyers will be active on Sunday with a negative close of the S&P 500 and a strengthening dollar.
I do not rule out that on Monday there will be a correction in all markets. This is where buyers need to seize the moment and gain a foothold above $24,000. I also do not rule out that investors will reconsider their view of PCE inflation data.
Source: Cryptocurrency
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