Bitcoin begins the last week of February in a turbulent situation, as the critical resistance zone is not broken. Bitcoin surpassed $24,000 in Asian afternoon trade on Monday, but the top ten volatile cryptocurrencies remained confused. Ether rose 0.18 percent while Solana was the biggest gainer among the top ten cryptocurrencies.
The current media environment surrounding cryptographic and blockchain technologies is full of cases of fraud and deception. While these cases are not all related to cryptocurrencies, such as FTX’s misappropriation of customer cash, they undermine faith in the wider crypto business, particularly among investors, regulators and regulators.
The number of Bitcoin whales is drastically reduced
Since the launch of Bitcoin in 2009, blockchain and its applications have evolved significantly. With the advent of smart contracts, new consensus processes, and new types of governance, technology has advanced in many directions.
Assets have also increased and are now held by millions around the world by larger players, including organizations such as BlackRock and JPMorgan Chase and governments such as El Salvador and the Central African Republic.
Sunday saw the lowest number of bitcoin whales, or wallet addresses with 1,000 bitcoins or more, since August 2019. According to the Glassnode cryptanalysis service, there were 2027 whales on Sunday, February 19, 2027. The last time their number was this low was on August 5, 2019, when it was 2,023.
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The fact that each whale holds around $25 million worth of Bitcoin at a current price of roughly $2,500 shows a significant amount of trust in the digital currency.
The number of Bitcoin whales peaked at around 2,500 in February 2021, and has since gradually declined. This pattern continues despite the market increasing between February and March 2022, when the number of whales increased from 2,117 whales on 21 February to around 2,286 whales on 23 March.
A similar tendency does not occur among the so-called big whales, those with more than 10,000 bitcoins, which at current prices represents an investment of more than $250 million.
There are only 117 mega whales, relatively close to the historical highs of 123 in November 2022 and 126 in October 2018. Historically, their behavior has been far less correlated with the price of Bitcoin.
Despite the huge swings in the price of the digital currency over the past five years, the number of smaller investors in Bitcoin, wallets that hold more than one coin, has gradually increased over the past five years with little decline.
The number of wallets holding more than one bitcoin now stands at 982,000, up from 814,000 this time last year and 788,000 in February 2020.
Bitcoin performance expectations for the week
Bitcoin/USD is back below $25,000 after a classic “fake” in low-volume weekend trading, and the bulls are still not strong. However, last week, the largest cryptocurrency appeared to be entering the next phase of its 2023 recovery, making rapid gains and even hitting six-month highs.
The good times didn’t last, however, as February’s gains were much slower and harder to come by than January’s 40% gains. So what will the rest of the month bring?
TradingView data showed that Bitcoin/USD was recovering from weekly losses near the $25,000 mark at the time of writing. But the bulls were unable to trigger the resistance-support switch and the whale activity in the exchanges caused concerns.
All eyes are on the FOMC meeting and US markets
We have to see what form this “weakness” will take in the macro markets. The week ahead will have fewer potential macro drivers than last week, with the release of scant US data, including personal spending in the form of the Personal Consumption Expenditure (PCE) index.
However, the release of the Federal Open Market Committee (FOMC) minutes in February is an event that is on the radar of most cryptocurrency analysts. That’s where the latest benchmark interest rate hike was set, with the hope that Federal Reserve Chairman Jerome Powell would express the language of halting rate hikes, if only in theory.
“We’re also releasing minutes from the FOMC on Wednesday where Powell explains what a rate hike ‘pause’ could look like. […] The middle of next week is where I’ll start to look at swings.” Crypto analysts
However, not everyone believes the FOMC minutes will be easy to understand. Capital Hungry, a financial market research website, warned this week that “tricky revisions” could be published.
Investors look at Bitcoin’s Bitcoin Hash
As the month draws to a close, Bitcoin network fundamentals maintain bullish sentiment, a typical bright spot.
The next automatic reset will struggle to add about 10% to the total available. Unfortunately, this negates the slight drop from the previous setup, making it difficult to reach new all-time highs.
This is a critical gauge of sentiment among Bitcoin miners, as such high spikes signal intensifying competition for block grants. This is due to increased coverage of so-called “ordinals” fees, with miners increasing profitability after months of pressure.
Bitcoin fear and greed index
Bitcoin may not be able to sustain the rally above $25,000, even if it manages to break solid resistance at that level. However, recent studies by research firm Santiment indicate that sentiment in the cryptocurrency market is turning strongly bullish near these multi-month highs.
The ever-popular Crypto Fear and Greed Index shows that “greed” is the dominant flavor of sentiment in the cryptocurrency market this week. Bitcoin’s rally matched the 62/100 reading for the indicator, setting a new high since BTC/USD hit $69,000 in November 2021.