FX.co ★ Bitcoin tries to gain a foothold above $25k despite falling trading activity

After Friday's impulse growth, Bitcoin is moving within the $23.9k–$25.1k fluctuation range. Following the results of yesterday's trading day, the cryptocurrency managed to neutralize the pressure of sellers and resume the upward movement.

The asset again tested the $25k level despite Presidents day in the U.S., and as a result, a day off on the stock market, which in turn means a decrease in overall trading activity. If the stock instruments resume the upward movement at the end of today, then BTC may end the trading day above $25k.

However, as of writing, there is high seller activity in the Bitcoin market above the $25k level. This does not allow the cryptocurrency to successfully consolidate above this mark, which may lead to the formation of a "false breakout" pattern and exacerbate the fall in the BTC price.

Stock market situation

The stock market is preparing to resume work after an additional weekend on an alarming note. According to Wall Stret Journal surveys, investors fear a more aggressive policy from the Fed in connection with the latest statistical evidence of the stability of the American economy.

BBG also reports that despite the decline in capitalization, technology stocks still look overbought against the background of the key S&P 500 index. This may mean that the stock market will continue to decline for the foreseeable future.

Meanwhile, the SPX index is holding the $4,000 mark, which is an important part of Bitcoin's bullish trend. Despite the strong support area, the technical indicators of the index look weak and point to further attempts to break through the key support level.

DXY Analysis

The U.S. dollar index is back in our reviews, which is regaining prominence amid the end of the correction and the resumption of quantitative easing policies. The DXY has been slightly correcting and consolidating over the last five days.

Technical metrics point to a high probability of a resumption of the upward movement towards the 104–106 area, where an important resistance level passes. The stochastic oscillator has formed a bullish crossover, and the RSI has regained its direction upward.

BTC/USD Analysis

Meanwhile, there is a slight panic in the crypto market and a lack of understanding of further BTC price movement. According to Glassnode, the supply of coins that have not moved in the last 5–7 years is actively growing. As of February 21, there is no talk of a massive sell-off, but the dynamics are alarming.

CoinShares also reported another weekly outflow of funds from the crypto stock in the amount of $32 million. The reduction in the investment presence in the crypto market continues for the second week in a row, but with the development of the impulse growth of BTC on Friday, the trend will be interrupted after the current week.

Bitcoin technical metrics point to a continuation of the upward movement and consolidation above $25k. The Stochastic has formed a bullish crossover and the RSI has turned up again. If this momentum continues after the stock market opens, the probability of ending the trading day above $25k will increase significantly.

Results

Bitcoin looks bullish, and with the corresponding movement of stock indices, the crypto asset will successfully gain a foothold above $25k. The key resistance level is at $25.1k, where the 365 EMA passes. This is a strong milestone that the asset may not break through on the first attempt.

Therefore, a local pullback is likely, which does not pose a threat to the upward trend. It will delay the final consolidation above $25k and force BTC to consolidate. But in general, Bitcoin will continue its upward movement and gain a foothold above $25k in the short term.