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

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

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

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

Analysts are eyeing a break towards $30,000 if the support can become more permanent, while concerns nonetheless remain that a return towards the resistance retrieved in January is still on the cards.

Amid a quiet week for macro data, any catalyst for whether BTC/USD is rising or falling may come from Bitcoin itself.

One thing is for sure, the on-chain data shows – long-term Bitcoin hodlers are not in the mood to sell just yet, and at current prices continue to add massive amounts to their BTC exposure.

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

Bitcoin’s Monthly Close Prevents March Trend Showdown

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

A weekly close at around $23,500 was music to the ears of those who wanted to see a bullish bounce as soon as possible.

“BTC managed to pull back above the ~$23,400 level which is the high end of the monthly macro range,” said popular trader and analyst Rekt Capital. explain.

“This is what BTC needs to keep doing for a bullish bias as February draws to a close. The upcoming monthly close will be very interesting.”

BTC/USD annotated chart. Source: Rekt Capital/Twitter

At current levels, BTC/USD is up around 1.25% in February 2023 – modest by historical standards but still remarkable for preserving gains for the year.

For Rekt Capital, March marks the real breakthrough month for BTC/USD as it approaches a long-term trendline, a break of which would signal a complete trend reversal.

“February is coming to an end and indeed not too much excitement for BTC, as it always has been for a pre-breakout monthly candle,” he said. continued.

“Since the macro downtrend is a sloping trendline, BTC’s breakout price will be a bit lower in March at ~$24,500.”

BTC/USD annotated chart. Source: Rekt Capital/Twitter

another post reiterated $25,000 as a level to break to “confirm” a macro uptrend.

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

“Perfect tag of 22.7 and rebound. Moving the weekend though.. I wouldn’t be surprised to see another retest of 0.618 or a 3rd drive,” commented on weekend lows.

“At this point it becomes decisive for me. Hold and we can still see 25K+ liq, lose it and 20K next.

Trade resource Stockmoney Lizards meanwhile described a “short-term bullish reversal” for prices and the Relative Strength Index (RSI) on the 4-hour chart as the weekend drew to a close.

Macro attention turns to central bank liquidity

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

As Cointelegraph reported, however, analysts are increasingly eyeing peer releases from Asia as a potential BTC price influencer.

Central bank liquidity injections – unlike the Federal Reserve – remain a key topic.

“Global Liquidity – Expected to Increase in 2023, but Has Recently Decreased”, Popular Commentator Tedtalksmacro tweeted day.

“- China pumped ~$450B into money markets in Dec + Jan – US liquidity held steady, government liquidity recently topped Fed QT. Markets are a product of liquidity* appetite for the risk.

Macro cash comparison table. Source: Tedtalksmacro/Twitter

Tedtalksmacro nonetheless highlighted a potential countertrend in the form of Japan’s central bank, the Bank of Japan (BoJ), which it warned could still resort to financial tightening to rein in inflation. .

“On Friday last week, core Japanese inflation hit its highest level since 1981 –> fueling speculation that the BOJ will have to tighten after years of extremely accommodative monetary policy,” he said. . noted.

Comparing the performance of US macro assets to crypto after January’s Consumer Price Index (CPI) data print, it added that crypto assets have remained “bullish” despite others starting to rise.

Macro asset comparison chart. Source: Tedtalksmacro/Twitter

Analysis platform Mosaic Asset focused on the possibility of the Fed raising benchmark interest rates more than expected at its March meeting.

“With no signs of a slowing economy and another hotter-than-expected inflation report last week…this is increasing pressure on the Federal Reserve to keep rates rising faster. and longer than the markets expect,” he wrote in the latest edition of his series update, “The Market Mosaic,” on Feb. 26.

“You can see this reflected in the odds of how big the next rate hike will be, where implied market estimates currently favor another 0.25% increase. But opinions are quickly turning 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 probability of a 0.5% hike instead of the 0.25% seen in February currently stands at 27.7%.

Fed Target Rate Probability Chart. Source: CME Group

Sellers see first week of net losses in 2023

While Bitcoin may be up over 40% year-to-date, the path 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 generate net realized losses among sellers.

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

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

“Historically, once the crowd exits positions more frequently at a loss, funds are more likely to form.”

Bitcoin, Ethereum made an annotated table of losses. Source: Santiment/Twitter

The bad luck for the sellers contrasts with the strategy still firmly in place for the long-term holders, who continue to add to their BTC positions.

According to on-chain analytics firm Glassnode, hodlers’ net change in position hit a new four-month high over the weekend, reflecting the pace at which accumulation is occurring.

Bitcoin Hodler net position change chart. Source: Glassnode/Twitter

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

Graph of bitcoin supply percentage last active over 5 years ago. Source: Glassnode/Twitter

Bitcoin revenue hits highest level in 8 months

A broadly similar situation is currently observed among Bitcoin miners.

Here, data from Glassnode shows that on a rolling 30-day basis, miners are holding more BTC than they are selling, but current prices are keeping the trend precarious.

While it wouldn’t take much of a price drop to return to net selling, current conditions remain much healthier than previous months.

Bitcoin miner net position change chart. Source: Glassnode

A silver lining comes in the form of miners’ earnings, which, while modest, are nevertheless at their highest level in eight months.

Bitcoin miner earnings chart. Source: Glassnode/Twitter

Revenues were helped by ordinal fees, which crossed the $1 million mark in February.

Despite the ordinals resulting in a “more complete memory pool” for Bitcoin, research noted last week, miners still managed to clean it up, Glassnode shows.

Bitcoin mempool chart. Source: Glassnode

For Bitcoin whales, it’s early 2020

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

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

With price action still well below 65% of all-time highs, Bitcoin’s biggest investors have yet to decide that the time has come to return to the market.

According to Glassnode, the number of whales 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 single entity as “a group of addresses controlled by the same network entity”.

At their peak in February 2021, there were 2,161 such whale entities.

Bitcoin whale chart. Source: Glassnode

Still, clusters of whale trade activity can offer insight into support and resistance, even with fewer whales.

As watchdog resource Whalemap notes, $23,000 remains a key price target thanks to this 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.

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