FX.co ★ Bitcoin continues its consolidation movement near $24.5k: when can we expect a resumption of growth?

Bitcoin has moved to the stage of consolidation movement for the past days due to the unsuccessful retest of the $25k–$25.2k area. The resistance of sellers above the important level turned out to be so powerful that repeated retests of the area did not bring the desired results.

Under pressure from sellers, Bitcoin began to decline within the $24k–$24.8k price area. As long as the buyers hold this line, the bullish trend of the cryptocurrency remains intact, and we can look forward to renewed attempts to break above $25k.

Near the $25.1k level, 200 WMA passes, overcoming which can open the way for the cryptocurrency to $30k. The last time the price was above this metric was before the collapse of LUNA/UST. For the pattern to materialize, the price of BTC needs to complete two trading weeks above $25.1k.

However, the likelihood of a successful implementation of this pattern raises questions, given the growing skepticism in related markets. Investor sentiment in the medium term looks mixed, and may become bearish after the release of the Fed minutes.

Macroeconomic factors

The publication of the Fed's reports suggests that the agency considers the current level of inflation high and the deflationary trend rate insufficient over the past three months. On this basis, the regulator will continue to follow its monetary policy and reduce balance sheets.

Some members of the Fed announced the need to raise the key rate by 0.50%. At the same time, all officials agree with the rate increase by 0.25% in February. The agency is also concerned about a strong labor market and growing uncertainty about the U.S. economy in 2023.

The Fed has tightened its opinion on the current situation, and the issue of raising the rate by 50 bps will likely be considered in the near future or, at least, prolonging the aggressive policy. If the labor market remains strong, the likelihood of a 0.50% rate hike will increase.

Clouds continue to gather over the stock market, specifically the S&P 500 index. According to Morgan Stanley analysts, in the coming months, the price of SPX could collapse to $3,000, which is equivalent to a 25% price drop. As of February 23, the asset made a bearish breakdown of the $4,000 level.

BTC/USD Analysis

Despite the high level of correlation between BTC and SPX, there is reason to believe that the cryptocurrency will be able to get rid of the stock index. According to Glassnode data, in recent months, there has been an increase in the number of addresses with at least 1 BTC in balance.

In addition, we should not forget that the consolidation movement continues within the $24.1k–$24.8k area. Last time, a local accumulation period contributed to a bullish breakdown and the consolidation of BTC above $24k.

As of February 23, the Bitcoin market is dominated by bearish sentiment, according to data from Coinglass. If the situation does not change dramatically in the coming days, BTC will continue its upward movement due to large volumes of short positions.

On the daily chart of BTC, we see a classic consolidation of the cryptocurrency. The asset failed to consolidate above $25k after a series of retests, due to which the price went to the lower border of the range. At the current stage, the bulls clearly lack the volume to finally seize the initiative.

Buyers manage to buy off most of the bearish volumes, but the bulls have not yet been able to fully absorb the red candle. The technical charts also indicate a consolidation period. In the coming days, we may see the final attempt of the bears to break through the $24k level.

Results

Bitcoin is consolidating and accumulating volumes for further upward movement. During this period, the bullish activity has decreased, allowing bears to actively move the price downward. The last two attempts by the sellers were unsuccessful, and the bulls defended the $24.1k level.

If the current trend continues, the consolidation period will end by the end of the current trading week. The probability of an impulsive price movement in the coming days will increase significantly. Among the main targets are $25k for bulls and $24.1k for bears.