Bitcoin price consolidation could precipitate a fall as US markets remember President Washington
- Bitcoin price has consolidated below the $52,768 roadblock for almost a week amid buyer momentum exhaustion.
- BTC could drop 10% to the most critical Fibonacci level, 61.8% at $47,445, a formidable blockade between January 8 -12.
- Invalidation of the bearish thesis will occur if the price records a new local top above the $52,816 range high.
Bitcoin (BTC) price continues to trade horizontally, stepping into the week when the US market is in holiday spirits, commemorating some of the country's founding fathers.
Also Read: Bitcoin price bullish outlook inspires IntoTheBlock’s 85% forecast of BTC at a new ATH by August
Bitcoin stalls as US markets remember President Washington
Presidents’ Day, which celebrates first President George Washington’s birthday, gives many Americans the day off on February 19. He is remarked upon as the first leader of a new republic — not a tyrant.
Banks and stock market are closed today, so spot Bitcoin ETFs are not trading.
— Bitcoin Magazine (@BitcoinMagazine) February 19, 2024
But #Bitcoin never closes. pic.twitter.com/opeHZtq25r
The celebration has become a consumerism bonanza with certain states making it a public holiday. The actual birthday is on February 22, but Congress voted to move the holiday to Monday. In doing so, lawmakers noted clear benefits to the economy, including enhanced retail sales and travel on three-day weekends.
The holiday colloquially known as Presidents’ Day officially celebrates only George Washington’s birthday. The story of how it became a three-day weekend is steeped in differing calendars, inconsistent punctuation, labor issues — and, of course, politics.https://t.co/RQxztUZesg
— The New York Times (@nytimes) February 19, 2024
Bitcoin price outlook amid Presidents’ Day lull
After a week of consolidation, Bitcoin price is likely to drop, as markets tend not to wait so long. The Relative Strength Index (RSI) at 78 also shows BTC is already overbought. This status often precipitates a pullback.
In addition, Bitcoin price’s current Spent Output Profit Ratio (SOPR) indicates a possible correction. This is because it has increased above 1 as a 30-day Simple Moving Average (SMA). For the layperson, this ratio suggests that BTC holders who are sitting on unrealized profits at current Bitcoin prices may soon cash in on their gains.
With the possibility of a correction as suggested by the RSI and the SOPR indicators, investors should not succumb to the fear of missing out (FOMO) after a striking surge in Bitcoin price. Instead, they should consider waiting for the SOPR rate to fall below 1 before they can enter the market.
If sellers pull the trigger, Bitcoin price could make a 5% fall to the 78.6% Fibonacci level, or in a dire case, retrace the 61.8% Fibonacci level of $47,445, which barred BTC upside potential between January 8 and 12.
The Moving Average Convergence Divergence (MACD) is also showing fading histogram bars, suggesting a waning bullish cycle.
BTC/USDT 1-day chart
On the other hand, if the bulls fasten their grip on BTC, Bitcoin price could extend north, shattering the $52,768 roadblock to record a new local top. A higher high above this level would invalidate the bearish thesis, bringing $55,000 into focus. In a highly bullish case, the gains could extrapolate to the $60,000 psychological level, 15% above current levels.
Also Read: Week Ahead: AI Coins take center stage ahead of Nvidia earnings
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
