Bitcoin (BTC) starts a new week with bulls gunning for all-time highs as February’s BTC price transformation continues.
After a solid monthly close, the first weekly candle of March completed comfortably above $60,000.
As anticipation mounts of what might come next, sellers tacitly accept that there may be nothing in the way of Bitcoin heading into price discovery.
The scenario marks one of the most optimistic outcomes for 2024 and considerably better than what many traders and analysts expected.
That said, plenty of volatility hurdles remain in place between now and the end of the month — and April’s block subsidy halving remains a pivotal moment in itself.
The action gets underway almost immediately with the United States Federal Reserve due to provide guidance on the state of the economy.
Should this offer no surprises for risk-asset traders, crypto already has enough to contend with — the exchange-traded funds (ETFs) may continue buying BTC. Still, the average investor is now acting out of “extreme greed.”
Can market trajectory sustain its recent trend, or is a more substantial correction and consolidation period possible?
Cointelegraph looks at the current state of Bitcoin markets at what could become a watershed moment for the current BTC price cycle.
Bitcoin approaches crunch all-time high zone
Bitcoin began the week with a bang on Mar. 4 — the weekly close sparked a $2,000 hourly price swing which included a new multi-year high.
Data from Cointelegraph Markets Pro and TradingView confirms $64,282 was hit on Bitstamp, with BTC/USD now acting even higher — near $65,000.
Barely $5,000 separates bulls from new all-time highs, capping year-to-date gains of over 50%, on-chain statistics resource CoinGlass confirms.
Across social media, traders and analysts are split between optimism and disbelief — calls for a major reversal remain vocal.
“Interesting timeline to read today. 50% calling for considerably higher, 50% calling for market to rug. Typically this occurs each week tbh, however this is noticeably more split than usual,” popular trader Skew wrote in his latest post on X (formerly Twitter).
“Current prices for large caps likely around major psychological inflection points. Reason why this is important is because on the next major move in the market this imbalance leads to more momentum & a consensus ~ Likely where the mean reversion trade actually is.”
Skew referred to consensus for upside continuation around the sensitive all-time high level from 2021. So far, other local highs from that year have failed to act as resistance for long.
On the more cautious side is Venturefounder, a contributor to on-chain analytics platform CryptoQuant.
In his most recent analysis, he suggested that BTC/USD may yet form a “cup and handle” pattern at the all-time highs, correcting to as low as $40,000 in a brutal test for bulls and bears alike.
“Would you be ready for this? BTC rally to old ATH to take out all the bears, then after halving has a correction towards $50k or $40k Bitcoin to take out all the bulls,” he wrote.
“Then rally all the way back to ATH to take out all the bears… We stay in this range until Q4 2024.
Contrasting the opinion is the argument that, in broader terms, crypto investing is still not on the radar of the mainstream majority.
Should this change, a new wave of viral interest in both Bitcoin and altcoins could materialize, fuelling an increasingly parabolic market.
“Bulls in complete control heading into the weekly close,” analyst Matthew Hyland concluded at the weekend.
“The majority have been, and are still offsides. Maybe on the Crypto Twitter Bubble it feels too good to be true but in the real world most people have no exposure. The panic hasn’t started to set in but it will.”
Analyst cautions on crypto market “froth”
Delving into the chances of a correction is Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments.
Adopting a sober mood this week, Edwards, who has placed considerable importance on the impact of next month’s halving, was unconvinced about recent moves.
Even if a snap turnaround does not occur immediately, he argues, the residual fervor from last month may simply be taking longer to fade.
“Froth can remain for 2-3 weeks before a flush. That means mid-late March potentially,” he warned.
Edwards stressed that he is not bearish from a long-term standpoint. As an investor, risk management is necessary — particularly with markets at such crucial historical levels.
“Price can always go up, it’s just risk mgmt and probabilities. The risk profile here is very different (worse) to when Bitcoin was $16K, for example. Simply something to keep in mind for portfolio mgmt,” he continued.
“Volatility in these zones (both up and down) goes up by orders of magnitude. Look at early 2021 for a comparable to today. I still think this bull market has a LONG way to go.”
Early 2021 saw a similar period of euphoria throughout crypto before coming to a head in early Q2, with a subsequent correction keeping new all-time highs for Bitcoin off the chart until November.
Bitcoin market cap’s counterargument to overheated derivatives
Accompanying concerns of overheated markets are some of the highest funding rates in history.
According to current CoinGlass data, some platforms are even seeing more than 0.1%, while largest global exchange Binance is itself at nearly 0.05%.
Open interest — a key precursor to BTC price volatility — tells a story of its own, hitting a giant $27.7 billion on Mar. 4.
Despite this, one analyst noted Bitcoin’s larger market cap last week means that the OI tally has more room to grow.
“Bitcoin open interest in notional value is approaching all-time highs. However, when you divide it by the current market cap, it’s sitting at just 2.25%, a historical average,” James Van Straten, research and data analyst at crypto insights firm CryptoSlate, summarized in part of an X post.
An accompanying chart from on-chain analytics firm Glassnode showed a similar situation on both Bitcoin and largest altcoin Ether (ETH).
This week meanwhile, began with CME Group’s Bitcoin futures initially trading several hundred dollars higher than spot markets.
Fed’s Powell set to convey “hawkish stance” in testimony
The Fed — and in particular Chair Jerome Powell — is the highlight of the upcoming macro week in the U.S.
Over two days beginning Mar. 6, Powell will testify before a House committee and Senate panel, giving policymakers an update on the economy.
The biannual event is expected to see Powell maintain now-familiar narratives on inflation and interest rates.
The latter is especially pertinent to crypto and risk assets, with a long-awaited rate cut apt to boost performance. So far, this has yet to happen, and recent macro data has made markets push back the odds to later in the year.
“Powell is expected to maintain a hawkish stance in his semiannual testimony to Congress, signaling to markets that the Fed is in no hurry to cut rates,” a group of Bloomberg analysts summarized this weekend.
“If that leads to tighter financial conditions, it will keep the pressure on the economy and raise the chance of additional lagged impacts from monetary policy.”
While markets see little chance of a further rate hike to come, the chances of a March cut were almost zero as of Mar. 4, per data from CME Group’s FedWatch Tool.
In its weekly rundown of upcoming macro events, trading resource The Kobeissi Letter nonetheless hinted that plenty of volatility was to come before the Fed’s decision, due Mar. 20.
“We are currently 17 days out from the long anticipated March Fed meeting. A lot is happening before then,” it concluded on X.
Data due in the coming days includes nonfarm payrolls at the end of the week.
Sentiment data shows price fixation
For the average crypto investor, the lure of all-time highs is having a familiar effect on sentiment.
Related: Bitcoin daily withdrawals challenge records as $2B leaves exchanges
According to the Crypto Fear & Greed Index, levels of “extreme greed” are at multi-year highs.
At 82/100, these are increasingly at levels which have historically marked market turnarounds due to unsustainable trajectory.
Analyzing social media phenomena, research firm Santiment last week also implied that more attention on price may contribute to a cooling-off phase.
“Following an explosive February full of some of the biggest monthly market cap gains in crypto’s history, discussions have increasingly moved toward price-related topics. Mainly, Bitcoin, AI tokens, & $PEPE,” it noted after the monthly close.
“Markets can flatten for a bit as a result.”
An accompanying chart showed the changing frequency of certain topics appearing on social media platforms over time.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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