Bitcoin begins the final week of February in a tumultuous mood as a critical area of resistance fails to breach. Bitcoin surged beyond $24,000 in Asian afternoon trade on Monday, but the top ten non-stablecoin cryptocurrencies remained mixed. Ether gained 0.18%, while Solana gained the most among the top ten cryptos.
The current media climate surrounding crypto and blockchain technologies is filled with instances of fraud and deception. While these instances are not all cryptocurrency-related, such as FTX’s misuse of customer cash, they weaken faith in the broader crypto business, particularly among investors, lawmakers, and regulators.
Bitcoin Whales’ number plummets
Since the launching of Bitcoin in 2009, blockchain and its applications have evolved substantially. With the emergence of smart contracts, new consensus processes, and new kinds of governance, technology has progressed in various directions.
Assets have also increased and are now held by millions across the globe and by larger actors, including organizations like BlackRock and JPMorgan Chase and governments like El Salvador and the Central African Republic.
Sunday saw the lowest number of Bitcoin whales or wallet addresses holding 1,000 or more BTC since August 2019. According to the crypto analytics service Glassnode, there were 2,027 whales on Sunday, February 19; the last time their number was this low was on August 5, 2019, when it was 2,023.
The fact that each whale holds about $25 million in Bitcoin at its current price of approximately $2,500 demonstrates a significant amount of confidence in the digital currency.
The peak number of Bitcoin whales, slightly about 2,500 in February 2021, has progressively decreased since then. Notwithstanding a market rise between February and March 2022, when the number of whales increased from 2,117 on February 21 to around 2,286 on March 23, this pattern persists.
A similar tendency does not occur among so-called mega whales, individuals owning more than 10,000 BTC, which at current prices represents an investment of more than $250 million.
There are only 117 mega whales, which is relatively close to the historical highs of 123 in November 2022 and 126 in October 2018. Historically, their conduct has been far less connected with the price of Bitcoin.
Despite the huge variations in the price of digital currency over the last five years, the number of smaller investors in BTC, wallets holding more than one coin, has gradually climbed over the last five years with some dips.
The number of wallets holding more than one Bitcoin is now at 982,000, a significant increase from roughly 814,000 this time last year and 788,000 in February 2020.
Bitcoin performance expectations in the week
BTC/USD is back below $25,000 after a classic “fakeout” during low-volume weekend trade, with bulls still lacking strength. However, last week, the largest cryptocurrency appeared to enter the next stage of its 2023 recovery, making rapid gains and even reaching new six-month highs.
The good times, however, were not to last, as February’s gains were considerably slower and more difficult to achieve than January’s 40% gains. So what will the rest of the month bring?
TradingView data showed BTC/USD recouping losses from the weekly close to approach the $25,000 barrier again at the time of writing. But, bulls were unable to trigger a resistance-support switch, and whale activity on exchanges raised concerns.
All eyes are on the FOMC meeting and the US markets
It remains to be seen what shape that “weakness” in macro markets will take. The upcoming week has fewer possible macro triggers than the previous one, with a smattering of US data releases, including personal expenditure in the form of the Personal Consumption Expenditures Index (PCE).
However, the release of the minutes from the Federal Open Market Committee (FOMC) meeting in February is the event on most crypto analysts’ radar. This is where the latest benchmark interest rate hike was determined, with hopes that Fed Chair Jerome Powell will include, if only theoretically, the language of a pause on rate rise policies.
“We also have FOMC minutes releasing on Wednesday where Powell will describe what a rate hike ‘pause’ could look like […] Middle of upcoming week is where I start considering swing entries.” crypto analysts
Yet, not everyone believes that the FOMC minutes will be easy to understand. Capital Hungry, a financial market research website, has warned this week that “sneaky hawkish revisions” may be released.
Investors look to the BTC hashrate
As the month draws to a close, Bitcoin’s network fundamentals are maintaining the bullish sentiment, a regular bright spot.
The next automated readjustment will struggle to add an estimated 10 percent to the existing total. Unfortunately, this will negate the tiny reduction caused by the prior adjustment, causing the difficulty to reach new all-time highs.
This is a critical metric for measuring the sentiment of Bitcoin miners, as such high rises signal intensifying competition for block subsidies. That comes on the back of increased coverage of so-called “ordinals” fees, with miner profitability visibly rising after months of pressure.
BTC Fear and Greed Index
Bitcoin may not be able to sustain a rise above $25,000, even if it manages to break through firm resistance at that level. However, recent studies from the research firm Santiment reveal that sentiment on the cryptocurrency market gets excessively bullish near these multimonth peaks.
The ever-popular Crypto Fear & Greed Index indicates that “greed” is the dominant sentiment flavor in the cryptocurrency market this week. The Bitcoin rally corresponded with a reading of 62/100 for the Index, establishing new highs since the BTC/USD rally to $69,000 in November 2021.