Bitcoin (BTC) starts a new week in fighting form after its highest weekly close since December 2021.
BTC price strength continues as key resistance comes into play near $50,000 — is there more upside to come?
Bitcoin traders are focusing on the odds after a 13% green weekly candle and the halving just two months away.
That event now acts like a magnet for sentiment, with various theories considering how high anticipation could take BTC/USD in advance.
There are plenty of hurdles on the way, however. This week sees a slew of macroeconomic data from the United States, coming at a time when uncertainty over fiscal policy remains a key topic for both markets and analysts.
The Federal Reserve will likely keenly watch the Consumer Price Index (CPI) and Producer Price Index (PPI) prints for January as markets cement expectations of interest rate cuts.
In the background, meanwhile, the success story of the U.S. spot Bitcoin exchange-traded funds (ETFs) is getting observers excited — a steady institutional bid, they suggest, could provide the fuel required for new all-time highs in the coming months.
Cointelegraph takes a look at these topics and more in the weekly rundown of what to look out for when it comes to BTC price performance.
Bitcoin faces $50,000
The Feb. 11 weekly close was special for Bitcoin bulls, data from Cointelegraph Markets Pro and TradingView shows.
At around $48,315, it was its highest since mid-December 2021.
Last week closed with gains of just under 13.5%, per data from statistics resource CoinGlass — easily Bitcoin’s best of 2024 so far.
The question for pundits now, naturally, is “Where next?”
Here is where opinions tend to differ — some see solid odds of overcoming key resistance around $50,000, while others do not see such a significant price level falling so easily.
In the latter camp is Michaël van de Poppe, founder and CEO of trading firm MNTrading.
“Bitcoin looking at the resistance. Massive weekly candle, through which Bitcoin is back above $48,000,” he summarized in one of his latest posts on X.
“I'm personally interested what price will do around $50,000 in the upcoming 1-2 weeks.”
An accompanying chart showed Fibonacci retracement levels currently in play, along with relative strength index (RSI) data for three-day timeframes.
Van de Poppe added that BTC/USD had been “stronger and more resilient” than he expected, reasoning that up to $57,000 was still possible before the April halving.
Also eyeing Fibonacci levels, as calculated from Bitcoin’s current $69,000 all-time high, is Keith Alan, co-founder of trading resource Material Indicators.
“BTC is testing what I consider to be the strongest technical resistance in the chart. The .618 Fib marks the top of the Golden Pocket on a macro fib retracement from the ATH to the Nov ’22 @FTX_Official Crash induced low,” he warned at the weekend.
Alan suggested that a weekly close above $45,000 — which subsequently materialized — should lead to a consolidatory period before an attack on $50,000. The 0.618 Fibonacci level at $48,300 — exactly the weekly close point — nonetheless still needed to be vanquished.
“I’m watching the weekly close. IMO a close above $45k would mark an R/S flip and some consolidation and a retest of support before attempting $50k would be healthier than a rip above $50k or even a close above the .618 Fib,” he concluded.
“I would consider the latter to be highly manipulative and expect it would FOMO in longs before squeezing shorts to the $52k - $55k range.”
Profitability data sparks local top warning
More concerned about the $50,000 mark, James Van Straten, research and data analyst at crypto insights firm CryptoSlate, flagged on-chain data as a reason for caution.
Citing the percentage of the BTC supply now held at a profit, he showed that BTC/USD is now approaching topping-out levels of past bull markets.
“Bitcoin is approaching 95% of all supply in profit, which usually marks tops,” he told X subscribers alongside data from on-chain analytics firm Glassnode.
“We got to 93% when Bitcoin was at 49,000. The inverse also works when less than 50% of all supply is in profit, which usually marks a bottom.”
In CryptoSlate analysis over the weekend, Van Straten added that the all-time highs in November 2021 produced the last 95%+ profit levels.
The data shows that comparatively little of the BTC supply has remained dormant since the highs.
As noted by Ki Young Ju, CEO of analytics platform CryptoQuant, those who bought the top in 2021 have played a grim waiting game.
#Bitcoin buyers from the 2021 bull cycle are nearing the break-even point.
— Ki Young Ju (@ki_young_ju) February 12, 2024
They've waited almost three years to see $48K again.
Kudos to those diamond hands!https://t.co/JqLntsCm7g pic.twitter.com/a2rz8YGBK7
CPI week comes as stocks hit records
This week sees a classic line-up of U.S. macro data, with the January prints of the CPI and PPI leading the charge.
These will provide key insights into the fight against inflation and the corresponding likelihood of the Federal Reserve shifting policy in risk assets’ favor.
Interest rate cuts are the key topic, with hopes of these beginning at the Fed’s next meeting in March fluctuating as data rolls in.
According to the CME Group’s FedWatch Tool, markets see only a modest chance of this occurring at around 17%, while the majority expect current rates to be held.
“All eyes are on CPI as inflation jumped last month for the first time since September,” trading resource The Kobeissi Letter wrote in part of an X post detailing the week’s releases.
“Big week ahead.”
Key Events This Week:
— The Kobeissi Letter (@KobeissiLetter) February 11, 2024
1. January CPI Inflation data - Tuesday
2. US Retail Sales data - Thursday
3. Philly Fed Manufacturing data - Thursday
4. January PPI Inflation data - Friday
5. Total of 8 Fed speaker events this week
6.~20% of S&P 500 companies report earnings
RT &…
On short timeframes, CPI releases can spark temporary volatility, leading to “fakeout” episodes, which can quickly resolve in either direction.
In a curious juxtaposition, as Cointelegraph reported, the S&P 500 is at all-time highs despite the precarious inflation landscape.
Mining difficulty prepares latest all-time highs
Far less unusual in the current Bitcoin bull market is another jump for network fundamentals due this week.
At its next automated readjustment on Feb. 15, Bitcoin mining difficulty is due to increase by an estimated 6%.
If it comes to pass, it will take the difficulty to new all-time highs and above 80 trillion for the first time, per data from monitoring resource BTC.com.
The impressive move would follow a 7.3% jump from two weeks ago, forming the largest difficulty increase since March 2023.
A similar story is evident for hash rate, which continues its own uptrend this month.
The latest raw data from MiningPoolStats shows the most recent local top of 669 exahashes per second coming on Feb. 6.
“Bitcoin hash rate is absolutely ripping, it’s at ATHs and up 12% in 3 weeks. The next difficulty change for Bitcoin could be as high as 11%,” Van Straten wrote at the time.
“This is the part of the cycle just before the halving where it’s deploy at all costs.”
The halving will decrease the amount paid to miners as a reward per block, minus fees, by 50%, increasing the appeal of engagement beforehand.
Crypto “greed” vs. absent retail
As crypto investor sentiment surfs levels of greed similar to those seen at the 2021 all-time highs, according to data from the Crypto Fear & Greed Index, a pattern is emerging.
Related: 6-figure BTC price in 2024? Bitcoin analyst says $55K now 'worst case'
In a recent analysis, research firm Santiment noted that social media users continue to get excited by BTC price spikes, only to then rotate into altcoins and increase exposure to volatility.
“Bitcoin’s +13% price run in the past week has led traders to speculate numerous new support and resistance milestones, with 50K widely anticipated,” it explained.
“Ironically, as these price levels have been surpassed altcoins have flipped the script in the opening hours of the weekend as the crowd became overly focused on $BTC’s price.”
Santiment showed that despite those altcoins subsequently correcting harder than Bitcoin, the rotation pattern has played out since October.
“Bitcoin retraces mildly, altseason ends much more drastically,” it summarized.
Google trends is without a doubt one of the best retail indicators.
— James Van Straten (@jvs_btc) February 11, 2024
We are a 25% of the interest of 2021, but only 30% off the all time high for #Bitcoin.
FOMO may not even begin until ATH. pic.twitter.com/qyZbk48ASa
Data from Google Trends, meanwhile, shows that mainstream retail interest in Bitcoin remains at a fraction of its own highs despite its price being just $20,000 off the 2021 record.
“FOMO may not even begin until ATH,” Van Straten argued.
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.