The value of Bitcoin: the value falls 4% today
Yesterday, for a very brief moment, the Bitcoin value had managed to be worth $25,200, while today it fell to $24,000.
In fact, $25,200 is a critical threshold because in case it is breached steadily, it could start another ascent to higher numbers.
Truth be told, there had already been three other attempts to cross it in the past week, all of which had failed.
It is as if right now there is a kind of wall for Bitcoin’s price, located exactly around $25,200, which is very difficult to break through.
And after four consecutive failed attempts, it now appears that Bitcoin wants to take a break of sorts, and then perhaps try again in the coming days.
Bitfinex’s analysis
Crypto exchange Bitfinex, which belongs to the same group that Tether is also a part of, published a couple of days ago the Bitfinex Alpha 42 report, which showed that the recent jump in Bitcoin’s value to around $25,000 was mainly driven by the liquidation of short positions worth more than $155 million.
According to Bitfinex analysts, over the past two weeks, the price of BTC has chased both long-standing long positions and liquidated “overzealous” short positions.
This process saw it reach its highest price in eight months, followed by an abrupt but short-lived pullback that caught some short-term bullish speculators off guard, who had been betting on a further push towards $26,000.
In such a scenario, they argue that any profit-taking in the wake of the recent rally, and a stop run by those who had become overly aggressive and chased further uptrends, could drive Bitcoin’s value back below $24,000
They add that historically this type of price movement which simultaneously liquidates both long and short positions has led to range formation.
Therefore, this area is expected to form over the coming days, where the price may lateralize for a while.
The macro picture today and the influence on Bitcoin value
Today’s decline in the value of Bitcoin may have been triggered by the fears generated yesterday in the international geopolitical picture, especially those regarding the continuation of the war in Ukraine.
Indeed, the macroeconomic-financial picture has not improved significantly in recent weeks, so the small bull run in Bitcoin’s price that led to four times to try to get back above $25,000 seemed like an anomaly.
It is enough to consider that, for example, the Nasdaq 100 index in recent sessions has lost everything it had gained at the beginning of the month.
Right now, that index is only up 11% from the end of 2022, while the price of Bitcoin is +45%.
While in January there actually appeared to be an improvement in the economic-financial picture at the macro level, the enthusiasm was extinguished in February as a result of significantly less positive data.
Chances are, it was the evolving macro picture that sent the price of Bitcoin and the Nasdaq 100 index down yesterday, losing 2.5%.
The Bitfinex report itself focuses specifically on the US inflation number and the Fed’s monetary policy in response to it.
While data released in January showed that inflation had fallen significantly in December, in February, however, the January data showed a possible pause in this downward process, suggesting that the Fed’s monetary policy may remain restrictive for quite some time to come.
What is emerging so far, however, is that there do not appear to be any clear signs of a worsening situation.
In other words, what is on the horizon is a period of stagnation at current values, waiting until the time is ripe to begin envisioning a concrete easing of the Fed’s monetary policy. If that were the case, the $25,000 attack would only be delayed for a while.
It is worth noting that already at the end of January there were four unsuccessful attempts to cross the $24,000 threshold and stay above it, and after a lateralization downturn below $23,000 that lasted about ten days, 24 000 dollars exceeded abruptly, and with momentum , also $25,000 was attacked.
