BTC Whale Stock Shrinks To Early 2020 Levels – 5 Things To Know In Bitcoin This Week

Bitcoin (BTC) continues to push for a bullish end to February as the monthly close kicks off another week of price action.

The largest cryptocurrency looks set to preserve its gains as it closes in the second month of 2023 – keeping bull hopes alive in the process.

Can the good times continue? The coming week could mean decision time for a key area of ​​BTC price action around $25,000.

Analysts are eyeing a breakout towards $30,000 if support can become more permanent, while concerns remain that a move back towards resistance regained in January remains on the cards.

Amidst a quiet week for macroeconomic data, any catalysts to decide whether BTC/USD goes up or down could come from Bitcoin itself.

One thing is for sure, on-chain data shows – long-term Bitcoin hodlers are in no mood to sell yet, and at current prices, they continue to increase their BTC exposure en masse.

Cointelegraph takes a look at some of the most important factors to keep in mind when it comes to what Bitcoin could do in the coming week.

Bitcoin monthly close rules out March trend settlement

It looked touch-and-go over the weekend, but Bitcoin has managed to avoid a major retracement and turned higher in the new week.

A weekly close of around $23,500 was music to the ears of those interested in seeing a bullish rally sooner rather than later.

“BTC has managed to break back above the ~$23400 level which is the Range High for the macro Monthly Range,” popular trader and analyst Rekt Capital explained.

“This is what BTC needs to continue to do for a bullish bias as February draws to a close. The coming month-end will be very interesting.”

At current levels, BTC/USD is up around 1.25% in February 2023 – modest by historical standards, but still eye-catching in terms of preserving this year’s gains.

For Rekt Capital, March marks the real make-or-break month for BTC/USD as it approaches a long-term trend line, the breach of which would signal a full trend reversal.

“February is coming to an end and actually not too much excitement for BTC as historically has been the case for a monthly candle before the breakout,” he continued.

“Given how the Macro Downtrend is a sloping trendline, the breakout price for BTC will be slightly lower in March at ~$24500.”

A new post repeated $25,000 as the level to break to “confirm” a macro uptrend.

Fellow trader Crypto Chase was more bullish on short-term price action. In an overnight tweet, he also flagged $25,000 as the line in the sand.

“Perfect tag at 22.7 and bounce. Weekend move though.. I wouldn’t be surprised to see another test of the .618 or a third run,” commented about the weekend slump.

“At that point it will be make or break for me. Hold and we could still see 25K+ liq, lose that and 20K next.”

Trading resource Stockmoney Lizards, meanwhile, described a “short-term bullish reversal” for both the price and relative strength index (RSI) on the 4-hour chart as the weekend drew to a close.

Macro focus turns to central bank liquidity

In a refreshing change from the previous two weeks, US macroeconomic data releases will be more muted in early March.

However, as Cointelegraph reported, analysts are increasingly looking at counterparty releases from Asia as a potential BTC price influencer.

Liquidity injections from central banks – in contrast to the Federal Reserve – are still a central theme.

“Global liquidity – forecast to rise in 2023 but has recently pulled back,” popular commentator Tedtalksmacro tweeted on the day.

“- China injected ~$450B into money markets during Dec + Jan – US liquidity has flattened, Govt liquidity has surpassed Fed QT recently. Markets are a product of liquidity * risk appetite.”

Tedtalksmacro nevertheless highlighted a potential countertrend in the form of Japan’s central bank, the Bank of Japan (BoJ), which he warned could still resort to fiscal tightening to tame inflation.

“On Friday last week, Japanese core inflation was pushed to the highest level since 1981 –> fueling speculation that the BOJ will need to tighten after years of extremely easy monetary policy,” he noted.

Comparing US macro asset performance to crypto by the January Consumer Price Index (CPI), meanwhile, added that crypto assets remained “stubborn” despite others starting to move higher.

Analysis platform Mosaic Asset focused on the potential for the Fed to raise benchmark interest rates more than expected at the March meeting.

“With no sign of the economy slowing and yet another hotter-than-expected inflation report last week … it increases pressure on the Federal Reserve to keep rate hikes faster and longer than markets expect,” it wrote in the latest edition of its update series “The Market Mosaic” February 26.

“You can see that reflected in the odds for the size of the next rate hike, where market-implied estimates currently favor another 0.25% increase. But views are quickly shifting to the possibility of 0.50%, with more on the way as rates stay higher for longer.” “

According to CME Group’s FedWatch Tool, the odds of a 0.5% hike instead of the 0.25% seen in February are 27.7%.

Sellers see first week of net loss in 2023

While Bitcoin may be up over 40% year-to-date, the road to recovery for the average hodler remains fragile.

That’s the conclusion of the latest data from research firm Santiment, which shows that last week’s mixed BTC price action still managed to deliver net realized losses among sellers.

Ether (ETH) saw the same phenomenon unfold, marking the first week of 2023 where sellers lost.

“Bitcoin and Ethereum both have more traders sell at a loss than at a profit this week, the first week so far in 2023,” Santiment commented.

“Historically, when the crowd exits its positions more frequently at a loss, bottoms are more likely to form.”

Sellers’ bad luck contrasts with the strategy that remains firmly in place for long-term owners, who continue to increase their BTC positions.

According to chain analysis firm Glassnode, hodler’s net position change hit a new four-month high this weekend, reflecting the speed at which the accumulation is happening.

Additionally, the percentage of BTC supply that has now been dormant for at least five years is now higher than ever before at 28.24%.

Bitcoin revenue hits 8-month high

A largely similar situation is currently being witnessed among Bitcoin miners.

Here, Glassnode data shows that on a rolling 30-day basis, miners hold more BTC than they sell, but current prices keep the trend precarious.

While it wouldn’t take much of a price decline to turn it back to net sales, current conditions remain far healthier than those seen in previous months.

A silver lining comes in the form of miner earnings, which, while modest, are still at an eight-month high.

Revenue was helped by recurring fees, which in February passed the $1 million mark.

Despite ordinals resulting in a “fuller mempool” for Bitcoin, research noted last week, miners still managed to clear it, Glassnode shows.

For Bitcoin whales, it’s early 2020

They may be responsible for some interesting events in the exchange order books, but the number of Bitcoin whales is actually declining.

Related: Bitcoin May Need Just 4 Weeks to Reach $30,000 as Key Monthly Looms

With price action still well over 65% below all-time highs, the biggest Bitcoin investors have yet to decide that now is the time to return to the market.

According to Glassnode, the whale count is now at its lowest in three years – only 1,663 unique entities now control 1,000 BTC or more. Three years ago, in February 2020, Bitcoin was trading below $10,000.

Glassnode defines a unique device as “a cluster of addresses controlled by the same network device.”

At the peak in February 2021, there were 2,161 such whaling units.

“Clusters” of whale transaction activity can still provide insight into support and resistance, even with depleted whale numbers.

As monitoring resource Whalemap notes, $23,000 remains a key price focus thanks to that whale factor this month.

The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.