For the last seven days, Bitcoin quotes have been within a local consolidation movement with minimal trading volumes. In such a situation, a “triangle” began to form on the daily BTCUSD chart, which indicates a high probability of an impulse exit in one of the directions. Also, during the corresponding period, the volume of purchases of BTC coins increased significantly, which once again confirms the key influence of Grayscale on testing the support level of $38.5k.
Despite the growing positivity in the cryptocurrency market, there is no reason to believe that the price of Bitcoin will move beyond the “triangle” in an upward direction. Moreover, the asset has not violated the global structure of the downward trend, so the likelihood of a downward movement still remains. An important factor that can directly affect the further movement of the Bitcoin price will be the speech of the Fed members regarding their vision of monetary policy. Speeches by Fed members After the meeting of the regulator and the restrained rhetoric of Jerome Powell, local pessimism reigned in the markets, provoked by uncertainty regarding the start of easing monetary policy. The Fed chief also noted that in the long term, the United States is on an unsustainable financial path, as public debt is growing much faster than the economy. Against the backdrop of such statements, investment activity, especially in the crypto market, has decreased significantly. That's why investors will be looking for glimmers of hope in speeches from other Fed members.
Today at 17:00 GMT, the head of the Federal Reserve Bank of Cleveland, Loretta Meister, who has voting rights on the Fed Board of Governors, will give a speech. The upcoming event puts pressure on cryptocurrency quotes, as negative sentiment continues to prevail among investors. However, if Meister declares that there is every reason to start lowering the rate, contrary to investors’ expectations, then this will provoke a BOOM of positivity in the crypto market. Investors resumed buying BTC Despite the pessimistic short-term prospects for the crypto market and Bitcoin against the backdrop of keeping the key rate high, long-term investors are resuming the accumulation of BTC coins. According to Santiment data, wallets with balances of 1,000 - 10,000 BTC have been actively buying cryptocurrency over the past two weeks. Also adding positivity was the news that Bitcoin exchange-traded funds from BlackRock and Fidelity entered the top 10 largest American ETFs in terms of asset inflows with a result of more than $4.8 billion.
At the same time, The Block analysts report that transaction volumes on the Bitcoin network reached a maximum in September 2022 with a result of more than $1.21 trillion. This indicates the high popularity of BTC even during correctional movements. And the fly in the ointment was the company Genesis, which is going through bankruptcy proceedings and asked the court to allow the sale of shares in Grayscale trusts, which could negatively affect Bitcoin quotes. BTCUSD Analysis As of February 6, Bitcoin continues to consolidate near the $42.6k level. The main goal of BTC bulls remains a breakdown of the 0.5 Fibo level at $43.3k, however, after several unsuccessful attempts to do this, the price of the asset has entered a consolidation phase. The successful implementation of this idea is hampered by relatively low trading volumes: as of February 6, $18 billion. These volumes are also not enough for Bitcoin bears to continue the downward movement to $40.5k and below $40k.
Over the past 24 hours, the situation around Bitcoin has not changed dramatically, which means that the asset can either go to the formation of the second shoulder of the G&P or resume its bullish rally, consolidating above $45k. The cryptocurrency managed to break the structure of the local downward trend, consolidating above $42k, but subsequently the upward movement stopped. This suggests that sellers' positions above $43k are still strong, and the likelihood of a resumption of the downward movement is significant. Results There have been no significant changes in the structure of Bitcoin price movements: the asset continues to consolidate near the $42.6k level with minimal price impulses. The main reason for BTC's weakness is another flow of liquidity into the US Dollar Index and Treasuries, as well as gold, amid geopolitical instability. In such a situation, BTC investors can only wait for the approaching halving, which will significantly increase Bitcoin’s chances of reaching a new high.
