As this article was being prepared, Bitcoin’s price saw a sharp $1,000 climb, reclaiming the crucial $69,000 support level. While Chinese markets are closed for holidays this week and U.S. markets will reopen tomorrow, the cryptocurrency market is experiencing relative calm, with Bitcoin marking its daily low at $68,000.
Fed Signals Influence Global Trading Volume
Last week, a favorable U.S. inflation reading led to optimism among investors, and all eyes are now on the Personal Consumption Expenditures (PCE) Index—closely monitored by the Federal Reserve—set to be released on Friday. Signs of a continued decline in inflation, albeit slow, suggest the Fed could become less hesitant to cut interest rates. While trading volumes remain subdued due to the holiday period, Europe’s Stoxx 600 index climbed 0.3%, helped by a recovery in bank shares following last week’s sharp declines.
Holiday Lulls and Market Expectations
Futures for the S&P 500 rose by 0.4%. With Presidents’ Day shutting U.S. markets and Lunar New Year celebrations in China, trading kicked off slowly this week. Recent data points to an almost certain rate cut from the Fed in July, with some analysts predicting that markets could adjust their expectations and start pricing in the possibility of a surprise move in June.
Gold dipped below $2,000 after earlier profit-taking, while silver slipped 1%. The U.S. dollar remained steady. Bitcoin, meanwhile, has been targeting the $70,000 mark over the past 45 minutes, signaling renewed optimism among crypto traders.
Volatility Returns to the Crypto Market
Later this evening, statements are expected from two Federal Reserve officials, adding further suspense to trading floors. Although Bitcoin ETFs saw $15 million in inflows on Friday, redemptions earlier in the week meant the overall trend remained in net outflows. After Sunday’s rapid sell-off, Bitcoin is once again setting its sights on previous highs. Over the past three days, the leading cryptocurrency has largely traded sideways. Excluding the dip between February 11 and 13, this sideways pattern has persisted since February 7.
Bitcoin repeatedly failed to hold above $70,880, consistently encountering strong selling pressure at this level. Should this scenario play out again, the price could see another $1,000 jump, potentially triggering a build-up of short positions. For a meaningful reversal, Bitcoin needs to post daily closes above $72,000. A possible test of the $70,800 resistance may provide battered altcoins with a short-term window to recover some losses following Sunday’s broad sell-off.
Among the top 100 cryptocurrencies, only the altcoin STABLE managed to post double-digit daily gains. On a weekly basis, PIPPIN surged 185%, with STABLE not far behind at 53%, placing them firmly in the leadership position for the week’s best performers.
