Crypto markets traded higher on Friday. Bitcoin (BTC) fell 1.21% to $24,407, while Ethereum (ETH) broke $1,650. BTC volume over the past 24 hours was around $29.04 billion, down 17.78% in the last 24 hours. The crypto market was a bit nervous after the FOMC minutes showed that inflation and recession risks are still real. BTC and other digital assets were in the red after the dismal FOMC meeting minutes, but the market quickly digested the shock and rebounded. It will be interesting to see whether central banks continue their hawkish stance or ease monetary policy in the coming weeks.
BTC and altcoins are pulling back sharply, but today’s correction is simply a retest of lower support or a sign of deterioration. Bitcoin faced another rejection at $25,211 on Feb. 21, which may have tempted short-term bulls to give up and book gains. That could take the price to its first major support at the 20-day exponential moving average. The asset saw its price rise 16% between Feb. 13 and 16, virtually nullifying the bears’ expectations of a monthly option expiration below $21,500. Due to the strong rally, these bearish bets are unlikely to pay off, especially as the February 24th expiry occurs. However, the bulls did not anticipate the sharp rejection of the $25,200 price on Feb. 21, and this reduces their chances of making a $480 million profit on BTC options expiry this month. Even if the news flow remains negative, the bulls can take profits of up to $480 million on Friday’s monthly options expiration. However, the bears can still improve their situation significantly by pushing the price of BTC below $23,000.
Although Ether has been above the $1,680 level since Feb. 17, the bulls have failed to clear the overall hurdle at $1,743. That may have attracted selling from short-term traders. The asset’s price rose 18% between February 13 and February 16, but has since been range trading near the $1,700 level. Despite recent price gains, Ether derivatives metrics remain neutral-to-bullish as investors consider the tightening regulatory environment and the potential impact of Ethereum’s Shanghai upgrade. Since the launch of the Beacon Chain on December 1, 2020, the Ethereum ecosystem has lost only 226 validators, accounting for only 0.04% of 524,060 validators. Such slim chances of being slashed were highlighted by an Ethereum core developer on Twitter, implying that people shouldn’t be concerned about staking ETH for that reason.
On the macro front, the drop in the rise comes after the consumer price index (CPI) print on February 14 showed higher-than-expected inflation, as well as increased regulatory enforcement from the US Securities, and Exchange Commission (SEC). Crypto prices remain highly correlated with the Dow and S&P 500. Following the January CPI print, which showed inflation was higher than expected at 0.5%, the FOMC minutes confirmed that the Fed will continue to raise interest rates for as long as they believe it is necessary. Meanwhile, investors’ appetite for risk is likely to remain muted, and potential crypto traders may want to wait for signs that US inflation has peaked, or for the Fed to signal that smaller-scale interest rate hikes are on the way. A more transparent regulatory roadmap for the crypto industry would also help to improve sentiment in the sector.
Technical Outlook:
Bitcoin:
BITCOIN after making the low of $15,476 started trading in a range from $16,000 to $17,250. The asset finally gave a breakout above the range and witnessed a sharp rally making the high of $25,250. Post this move, BTC started to consolidate in a ‘Rising Channel’ pattern and is facing stiff resistance around $25,200 (200 Day Moving Average and the previous top of 15th August 2022). On a broader time scale (Weekly Chart) the asset is trying to make a ‘Tweezer Top’ (Bearish pattern), However the pattern would be complete if the subsequent candle breaks the low of the current week’s candle. To further rally, BTC needs to break, close and sustain above the key level of $25,250.
ETH:
ETH gave a breakout above the range ($1,050 to $1,250) and witnessed a sharp rally. The prices surged almost by 39% and made a high of $1,741. Post this move, the asset is consolidating in a narrow range from $1,600 to $1,725 and is facing strong resistance at its horizontal trendline at $1,750. Hence, to further rally it needs to break , close and sustain above the key resistance of $1,750. Once it does that then we may expect the prices to go up to the $2k levels. ETH has a strong support zone at $1,500 to $1,450.
BNB:
BNB after making the low of $220 started moving in an uptrend and rallind up to $337.8. The asset faced a strong resistance at $336 (Horizontal Trendline) and witnessed a correction and the prices made the weekly low of $282.8. However, it didn’t give a daily close below its 200 Day Moving Average. BNB has a strong support zone from $280 – $300 (Horizontal Trendline). If it breaks the support then it may further drop to $250 levels. To witness a rally BNB needs to break, close and sustain above $336. Currently, the asset is trading in a narrow range from $300 to $320 with low volumes.
Weekly Snapshot:
| USD ($) | 16 Feb 23 | 23 Feb 23 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $23,623 | $23,947 | 1.37% | $25,134 | $21,460 | $25,127 | $23,644 |
| ETH | $1,640 | $1,651 | 0.67% | $1,733 | $1,470 | $1,719 | $1,605 |
| BNB | $304.76 | $308.53 | 1.24% | $325.60 | $283.70 | $319.30 | $304.22 |
| crypto | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | 12.89% |
| Ethereum (ETH) | -5.38% |
| Binance Coin (BNB) | -21.41% |
| Resistance 2 | $28,500 | $2,000 | $1.80 | $380 |
|---|---|---|---|---|
| Resistance 1 | $25,250 | $1,750 | $1.50 | $336 |
| USD | BTC | ETH | Matic | BNB |
| Support 1 | $21,500 | $1,500 | $1.25 | $300 |
| Support 2 | $17,500 | $1,250 | $1.05 | $255 |
Market Updates:
- Snow Crash manuscript that coined the term ‘metaverse’ to be auctioned by Sotheby’s. The manuscript is part of a larger series of physical and digital items related to the famous book.
- Coinbase launches its own layer-2 network for building decentralised apps. The network, known as Base, is designed to be a low-cost, secure, developer-friendly environment that Coinbase said will serve as a bridge to bring users into the crypto economy.
- USDC issuer Circle to increase staff by up to 25% amid layoff season. The plan to expand its workforce comes just months after it mutually called off its plans to go public via a SPAC merger.
- A three-way partnership involving the company RMS Titanic (RMST), Hong Kong-based Venture Smart Financial Holdings and Web3 firm Artifact Labs will begin tokenizing precious artifacts from the Titanic to unlock a myriad of Web3 functionalities.
