Yesterday, Bitcoin value had managed for a very brief moment 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 a new ascent to higher figures.
Truth be told, there had already been three other attempts to cross it in the last week, all of which failed.
It is as if right now there is a kind of wall for Bitcoin’s price, placed precisely around $25,200, which is very difficult to break through.
And after four consecutive unsuccessful attempts, it now seems that Bitcoin wants to take some kind of break, and then maybe try again in the coming days.
Summary
Bitfinex’s analysis
The crypto exchange Bitfinex, which belongs to the same group that Tether is also a part of, a couple of days ago published the Bitfinex Alpha 42 report, which showed that the past few days’ jump in Bitcoin’s value to around $25,000 was fueled mainly by liquidations of short positions worth more than $155 million.
According to Bitfinex analysts, over the past two weeks the price of BTC has been chasing both overleveraged long positions and liquidating “over-eager” short positions.
This process led it to reach its highest price in eight months, followed, however, by an abrupt but short-lived pullback that caught some short-term bullish speculators off guard, who had been betting on a further push toward $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 chasing further uptrends, could drive Bitcoin‘s value back below $24,000
They add that, historically, this type of price movement that simultaneously liquidates both long and short positions has led to range formation.
Therefore, this range is expected to form in the coming days, within which the price could lateralize for a while.
The macro picture today and the influence on Bitcoin worth
Today’s decline in the value of Bitcoin may have been triggered by the fears generated yesterday in the international geo-political picture, particularly those regarding the continuation of the war in Ukraine.
Indeed, the macro economic-financial picture has not improved significantly in recent weeks, so the small bull run in Bitcoin’s price that led it 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 gaining only 11% from the end of 2022, whereas the price of Bitcoin is at +45%.
While in January there actually seemed to be an improvement in the economic-financial picture at the macro level, enthusiasm was extinguished in February as a result of considerably less positive data.
Chances are that it was the evolving macro picture that caused the price of Bitcoin and the Nasdaq 100 index to fall yesterday, losing 2.5%.
The Bitfinex report itself focuses particular attention on the US inflation figure and the Fed’s monetary policy in response to it.
While in January data was released showing that inflation had fallen significantly in December, in February, on the other hand, the January data showed a possible pause in this downward process, suggesting that the Fed’s monetary policy may remain restrictive for quite a while yet.
However, what emerges to date is that there do not seem 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 start imagining a concrete easing of the Fed’s monetary policy. If that were the case, the attack on the $25,000 would only be postponed for a while.
It is worth noting that already at the end of January there were four failed attempts to cross the $24,000 threshold and stay above it, and after a downturn with lateralization below $23,000 that lasted about ten days, the $24,000 was exceeded abruptly, and with the momentum, also the $25,000 was attacked.
